Dividend Growth Investor - Recent Investment for January 18, 2024
I wanted to let you know that I took advantage of the recent dip and added to my position in an existing holding. I have a small position, which I hope to grow over time, at the right valuation. I would love to add to Starbucks on further declines. Lower entry valuations lock in a potentially higher future return. At least the entry dividend yield is better at a lower entry valuation.
The stock is not cheap at 22 times forward earnings, but offers a decent starting yield of 2.50% today. The dividend would likely double over the next decade, fueled by earnings growth. The company has managed to grow dividends at 10%/year over the past 5 years. Recent dividend growth has been decelerating to 7% -8%/year range however., which is still good in my book.