I wanted to let you know that I initiated a new position today. I bought shares in a recent dividend initiator, which had also just completed its first dividend increase. I believe that dividend initiators can be a fertile ground for future dividend growth. The company ticks a lot of the boxes of a potential good investment that I read about in Peter Lynches books. I unleashed my inner Peter Lynch on this one. However, that doesn't guarantee success.
I find this company to be a good value today, and I also believe it has the potential to deliver high yields on cost in the future. As you know, there are three types of dividend growth companies. I try to balance my portfolio between each type. My overall goal is not just to generate income today, but to also generate dividend income that grows above the rate of inflation over time. Investing in companies that have lower current yields but higher expected dividend growth could help.
That being said, this is a riskier investment, as it is somewhat untested. I would likely try to limit exposure to $500 on cost, provided it can deliver more dividend increases and the business keeps doing well. You can read my analysis below:
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