Bankers delivers 50 years of rising dividends and continuous growth


#1

Originally published at: https://whichinvestmenttrust.com/bankers-delivers-50-years-of-rising-dividends-and-continuous-growth/

As it celebrates the incredible feat of delivering ever rising dividends through tumultuous periods of history, we delve in to how the trust is managed and consider its prospects for the future. Fast Facts Rising dividend every year since 1966 Dividend last cut during World War two Invests globally in developed world economies for income…


#2

I was really interested to while away my Sunday in the sun reading the little brochure Bankers produced describing how 1966 became such a pivotal year for investment trust dividends. I was so interested, I even moved to the shade so I read it easier, even though my overarching task today was to top up my tan before I go on holiday with my girlfriends.

When you look at how the dividend has beaten inflation, and how the 1980 cost of the share price is now being repaid to those investors in dividends each year, it is truly remarkable.

What an achievement 50 years of increasing dividends really is.


#3

A statistic which I think fund management firms should use but never do is the dividend you get on your original investment 5 or 8 or 10 years down the line. They mention in the article and @citygirl repeated it, that the 1980 purchase price equalling today’s dividend, but I estimate that the dividend I receive on Bankers now is close to 9% on my purchase price, only a few years ago.

In absolute terms Bankers dividend is less that 3% if you were buy stock today, but because it has been growing quite fast, they quote growth of 5% per year for 5 years in this article, this surprising quickly compounds to a much higher dividend on your original purchase price, 5-8 years later.

Too many small investors like me, trade their holdings too much when they start out, I certainly traded too much in my early years. If I had read statistics such as this, maybe, I hope, I would have held on a little bit longer.


#4

I agree with that @pauls and it would be really helpful so envisage the kind of effect that a growing dividend can have if you hold on to it for a few years or more.

I am surprised at the extent of the dividend reserves because I didn’t expect them to be so high. I got the impression from reading this article, though it was not explicitly stated that they won’t be adding to the reserves further from here. If that is the case, I would hazard a guess that they will be increasing the dividend even more, after all they have already announced it’ll go up at least 6% this year, which is very unusual in of itself.