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Should You Reinvest Your Dividends?

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First, let's define what dividend reinvestment is. When you invest in a company that pays dividends, you have the option to receive those dividends as a cash payment or to automatically reinvest them back into the company. By choosing to reinvest your dividends, you're essentially using them to buy more shares of the stock, which can help grow your portfolio faster. So, if you invest in McDonalds and they pay you, you can then essentially say ‘I don’t want this cash, instead please buy more McDonalds stock’. You can choose to buy back more shares of the company that paid you the dividend or you can use the payment to buy more shares in another company - either is great and increases your portfolio!  Deciding to just buy the same company is easier and you can have this done automatically but picking which company yourself allows more flexibility and you can decide what you need more of in your portfolio - perhaps you need a higher exposure to a particular sector and a certain st...
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Dividend Aristocrats: What Are They? Why Are They Important?

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As a dividend investor, you know that consistency is key. That's where the "Dividend Aristocrats" come in. What are Dividend Aristocrats? The term "Dividend Aristocrats" was coined by the S&P Dow Jones Indices, which maintains a list of companies that meet the following criteria: Member of the S&P 500 Index Increased dividends for at least 25 consecutive years Market capitalisation of at least $3 billion. It is slightly different when it comes to UK Dividend Aristocrats . To be considered a UK Dividend Aristocrat stock, a company must be listed on the London Stock Exchange and have increased its dividends every year for at least 10 consecutive years.  Dividend Max Annual Dividends chart for Diageo showing increase in dividends Why are they important? Consistency A company that has consistently increased its dividends for 25+ years (10+ years for UK stocks) is likely financially stable and well-managed. This doesn't mean that Dividend Aristocrats are ...
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Location: United Kingdom
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