Dividend Yield Should Not Drive Your Stock Selection Process

I received an email from a new follower asking me for my opinion regarding Southern Company (NYSE: SO) given that it has a dividend yield of ~4.75%. I quickly looked at the 5 year compound average dividend growth rate (“CADGR”) and noticed an anemic 3.50%.

This brings me to the objective of this post which is to demonstrate that dividend yield should not drive your stock selection process. I will compare SO’s projected dividend income stream with that for 3 companies with far lower current dividend yields but much higher CADGR. Continue reading “Dividend Yield Should Not Drive Your Stock Selection Process”