Dividends and Established Brands

Yesterday, on MSN there was a side show of 12 of the biggest brands in the US and how they were named. The 12 Brands are shown were Coca Cola, Oreo, Google, Arm & Hammer, Nike, Starbucks, Twitter, Doritos, amazon, Domino’s and Five Guys and Slinky. As a dividend investor, you are interested in them because they are now successful, but remember all the brands started with small sales . Eventually the companies behind them reached a stage where stock was sold, but that was an opportunity for growth investors. Dividend paying company investors watch, wait for the opportunity as the brands grow and reach into the average person’s buying habits.

As a dividend paying company investor you will miss some early opportunities, however you know the size and complexity of the marketplace rules – for every one winner, there were countless others who did not achieve success. You might miss a big opportunity, but the ones you latch onto, you can latch on for years to come.

An example is Apple computer stock price – if you examine the stock chart from 2005 to July 2008 if you had bought the company you made no money, received no dividends, for the stock price ended up in the same place, likely you would made more money in the bank account. Then the climb started and now if you owned the stock, you would be very happy. The company has declared a dividend, maintains a greater than 40% margins with very hot products in the marketplace  and a large cash holdings, there is no reason not to like the company.

There are always more questions than answers, till the next time – to raising questions

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