Mirador Real Advice Blog
Dividend Growth Investing Done Better Part 1 High Income Now Versus Hopes of High Income Someday
By Stan Clarke, February 2025
Mirador’s Income and Stability programs are multi-style portfolios designed to provide exceptional income while maintaining comfortable stability in the capital value of your portfolio.
One of the most important styles of income investing in our Income and Stability programs is called dividend growth investing. This style identifies companies with financial data that has often led to the company increasing their dividends or at least having a low likelihood of reducing their dividend.
Dividend Roots
Mirador’s dividend growth roots date back to the early 2000s when we designed our first system using the CPMS (Computerized Portfolio Management System) single-variable back test service along with their multi-variable back testing capabilities. Since then, we have continued the system using the Bloomberg Professional Terminal and advanced Excel databases and APIs. During these two decades of dividend growth investing experience, we have continually improved and optimized our dividend growth systems and processes.
But The Influencers Say
I have spent considerable time on various websites and social media platforms researching what others are saying about dividend growth. Unfortunately, there seems to be a large number of writers and influencers with:
- Limited experience
- Inadequate investment education
- No “skin-in-the-game”; it’s pretty easy to write and pretend to inform people, but it’s a completely other level when you are investing tens of millions of dollars of yours and other people’s money using your own systems and methods like we have been doing at Mirador for almost 35 years. Decades of hands-on experience brings one a whole new level of education.
Can you wait that long?
Many investors are like Mirador’s retired and pre-retirement clients – they need excellent income now without taking excessive risks that could impact the capital value of their portfolios. Yet so many dividend growth portfolios or funds I have seen have low current yields, with only hopes of dividend growth that will turn that mediocre yield into a better yield. A large growth rate applied to a miniscule initial dividend can take a long time to become decent income. Will it happen in time? 100 % growth of almost nothing remains almost nothing!
Why wait?
Will you really be well served by an investment with a 2% current yield just because it has a juicy history or hope of a 5% dividend growth? This investment would take over 27 years for its yield to be the same as the 2025 distribution yield of Mirador’s Canadian Income and Stability Fund. Lots could happen in those 27 years to derail the company and its dividend. The clients we serve cannot wait, they want to have their capital working for them now and paying them income now.
Growth + Balance
For this reason, Mirador’s dividend growth programs balance the goal of excellent income now, with growing income in the future from potential increases in dividends. The growth of yield, along with modest but good capital appreciation, helps our clients live well in most any likely inflation environment.
The Proof is in the Yield
The 2025 yield for Mirador’s Canadian Income and Stability Fund was set at 7.5% at the beginning of the year. That’s 5.5% above the current inflation rate and 4.2% above the Canadian 10-year bond yield. Plus, the Mirador Income and Stability fund’s distribution is mostly dividends and capital gains, so it is highly tax effective in non-registered accounts. To get the same after-tax income as the Mirador Income and Stability fund from a bond or GIC would require an interest yield of approximately 10%.
Call me at 403-718-1025 or visit our website; miradorwealth.com for more information about dividend growth investing done better.