๐Ÿง  A Safe 19% Dividend Yield?


Every month, Brian Stoffel shares his stock holdings on Twitter. But there’s one stock he leaves out — and it’s his longest-held position: Aflac.

Those of you who follow three of us know that Aflac is not our normal cup of tea. We tend to prefer innovative, young, disruptive companies that are growing fast. But the story of Aflac is worth telling.

Back in February 2009, Stoffel was still a middle school writing teacher, just dipping his toe in the market. His broker said Aflac stock was significantly undervalued. He put all the free money he had — $105 — into shares. At the time, it had a 6.3% dividend yield; he set up an automatic dividend reinvestment plan, but thought little of it.

The next few years were a whirlwind: quitting teaching, moving to Costa Rica, getting married, starting a family. He completely forgot about the tiny investment until years later.

But if you looked at the account today, you’d be amazed. While Aflac stock is up 700%, his total investment is worth over $1,100 today — a 1,000% return. How did that happen? Dividend reinvestment.

Here’s the real kicker. He bought shares for a split-adjusted $8.76 apiece. The current dividend payout is $1.68 per year. Do the math: every year he’s getting a 19% return on his original investment from the annual dividend alone!

While Aflac might be an extreme example, consider three popular dividend stocks bought exactly 25 years ago today:

  • Johnson & Johnson, yielding 2.7% today, has a 13.5% yield on shares bought in 1998.
  • 3M Corporation, yielding 5.0% today, has a 14.6% yield on shares bought in 1998.
  • Target, yielding 2.7% today, has a 23.9% yield on shares bought in 1998.

Again, this isn’t where the three of us normally invest. But for a newsletter titled “Long-Term Mindset”, maybe it should be.

After all, there are only two key ingredients to becoming a master dividend investor: wide-moat businesses and time.

Sure, it takes a great deal of time & patience to wait for the rewards to reveal themselves, but that’s also true of the most valuable things in life.

– Brian Feroldi, Brian Stoffel & Brian Withers

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Would you be interested in a consumer entertainment business that never recorded an operating loss over 55 years? As an investor, you might want to learn more from its CEO and how it thrived through many tough economic times. Well, you can.

Leslie H. Goldberg took over the bowling business from his father after World War II. He left behind over 20 years of shareholder letters. Brandon Beylo from Macro Ops read all them to provide investors an incredible summary of insights that echo the teachings of Warren Buffett and Joel Greenblatt.

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We are big fans of Ben Meer and his focus on systems to make you more productive. This thread is a jam packed full of time-saving gems!

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Who doesn’t enjoy a silly cat video or an amusing pet picture shared on social media? We’ll do you one better.

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