💸 The $8 Million Janitor
Today is Dividend Day.
In this series, I will teach you 5 things about dividend investing in less than 5 minutes.
1️⃣ Capital Allocation
The most important task of management? Making capital allocation decisions.
The picture shows the long-term approach we want managers to take.
Before paying dividends or buying back shares, they should focus on growing and sustaining the business.
2️⃣ Record Inflows
Last month, people invested $140 billion into US stock funds.
This is the largest amount in a single month since the year 2000.
Investors seem to be very confident about the US stock market.
3️⃣ An investing quote
Richard Russell was an investment newsletter author.
He wrote the Dow Theory Letters from 1958 until his death in 2015 at the age of 91.
He was known for his contrarian and cautious investment approach, often urging readers to be wary of irrational exuberance in the markets.
“A stock dividend is something tangible - it’s not an earnings projection; it’s something solid, in hand. A stock dividend is a true return on the investment. Everything else is hope and speculation.” - Richard Russell
4️⃣ The $8 Million Janitor
Do you know about Ronald Read?
He had a regular job that didn’t pay a lot.
Why am I telling you about him?
Because he saved almost $8 million by investing in stocks that paid dividends!
Click the picture to read his story on X, or the link below it if you don’t have an account.
If you don’t have an account on X, you can read the story here.
5️⃣ Example of a dividend stock
Today we’ll look at one of the stocks Ronald Read owned.
J.M. Smucker sells consumer food and beverage products, like Folgers coffee, Jif peanut butter, and Uncrustables frozen sandwiches.
- Profit Margin: 9.1%
- Forward PE: 11.8x
- Dividend Yield: 3.7%
- Payout Ratio: 86.4%
Source: Finchat
That’s it for today
In case you missed it:
Used sources
- Interactive Brokers: Portfolio data and executing all transactions
- Finchat: Financial data