The Motley Fool Singapore
Should Dividend Investors Chase High Yields or Fast-Growing Payouts?
As a long-term investor, the logic of investing for dividends seems obvious to me. You invest in dividend stocks to receive growth and an income stream (which in Singapore is tax-free) in return. However, what may be less obvious is that investors have two options when it comes to dividends; companies that have higher dividend yields but stable payouts or ones that have lower dividend yields but fast-growing payouts. The key question, then, is which one should dividend investors pursue? Age influences style My answer would be, it depends on your age. Retirees, or those who are nearing retirement, will naturally gravitate towards stable, higher-yielding stocks including REITs. Given their regular income streams, it’s understandable that a higher return – in terms of the absolute dividen