When it comes to dividends, we often focus on two metrics: headline yield and the pace of dividend growth. Both are very important in determining success and returns. But one other dividend metric has a huge bearing on future returns and the true strength of a dividend.
And that’s the longevity of payout.
A lot can happen over decades. A single company can experience boom, busts, changes in consumer and business trends, new rivals and disruptions, wars and global conflicts, etc. Longevity of payout is a powerful tool to examine how a company reacts in all types of market environments. It might also be one of the most powerful tools for success overall.
With that, investors may be ignoring dividend longevity at their own peril.
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