Surging Earnings Should Drive Valuations, And Dividend Payouts and Yields, Much Higher

As I peruse the many headlines that I read day in and day out, I am seeing more and more about companies raising their dividends. Early last year, I noted that good companies were starting to boost dividends, and now they continue but have even been joined by companies still laden with debt (like Carnival (CCL)) yesterday, which announced a 150% hike that boosts the yield from less than 1% to over 2%).In early October, I shared what might have been viewed as an outrageously bullish forecast but that now looks not just aggressive but attainable, suggesting we could see 1500 on the S&P 500 by the end of the year. In that article, I shared a rather simple argument focused on a slight PE expansion and moderate earnings growth teaming up to produce my expected outcome. Today, I would like to come at the same conclusion from a different but perhaps even more compelling angle: Dividend Yield.... Read more

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