One way that the fund is looking to build its wealth is through investing its capital in companies that have a consistent dividend. One of the pluses in doing this is the fact that periodically companies will hike their dividend.
A good example of that is one of KDK Fund's holdings, Realty Income. Since the fund made its original purchase in January of 2014, Realty Income has hiked its dividend twice. This process has added not only more revenue, but when partnered with a dividend reinvestment program, has added more shares to the fund at no additional cost.
When looking at past behavior of the some of the other companies in the portfolio, the fund notices that there is a decent probability that the dividend will be hiked for the Jan-Mar quarter of 2015. AT&T and Sysco have regularly increased its dividend in the Jan-Mar quarter. Ford has increased its dividend in the last two Jan-Mar quarters.
Dividend hikes will allow for larger share purchases during dividend reinvestment, which will raise up the amounts of future dividends. This process done over the long term will ensure that wealth will continue to build at an increasing rate.
If
you have any stocks that you think KDK Fund would be interested in
researching, let us know at kdkfund@gmail.com or twitter @kdkfund.
**All
posts on this blog are information and opinions only. They are not to
be considered recommendations to buy or sell any security. Please do
your due diligence first before trading and investing. Please direct all
questions and comments to the blog or to kdkfund@gmail.com**
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