Based on the title of the blog, one would think the answer to be yes.
I started focusing on dividend stocks from early this year. But even before that, I had always looked at getting good stocks and holding them for long-term. I have always been a buy and hold kinda investor (but for a few mistakes where I sold stocks like WMT and V). The majority of the stocks that I hold now have been purchased at least 3-4 years back and some even before that and I plan to hold them for several more years.
I hold some stocks that I had purchased for growth potential rather than dividends. CMG (Chipotle), AAPL, GOOG are some prime examples.
- AAPL – I purchased 10 (pre-split) shares of AAPL at different price points. I liked the company for their growth potential with quality products. When I purchased the stocks, they were not paying any dividends, even though since then they have started paying (and increasing) the payouts. The stock also has gone up quite a bit since the purchase.
- CMG – Chipotle is another prime example of my investment in growth stocks. I am a big fan of their food and restaurants and they enjoy a good market share in the fast-casual segment. In fact, I think they were one of the early restaurants to define a fast-casual segment along with Panera Bread. They enjoy a niche in the market which enables them pass increasing costs to the consumers by raising prices and not affecting their margins (witnessed by their recent quarterly results). I purchased CMG stocks primarily for their growth potential and I don’t see them offering dividends anytime soon (if at all). Hopefully, they are able to grow their revenues for years to come.
- GOOG – I purchased 1 share of Google a while back just for the heck of it. I got it around 550 pre-split. The share doesn’t pay any dividends and probably will not for a foreseeable future.
AET and C could also be added to this list since they pay negligible dividends. AET has been a growth stock like I expected, but C has just languished.
So looking at all these, do I call myself a dividend investor or a growth investor. I would like to think myself as someone who does both. While I focus on for dividend stocks to invest in, I would definitely look at investing in growth stocks if I believe in the company.
But this also leads to another question:
Aren’t all dividend focused investors also growth focused investors?
Most of the dividend focused investors buy stocks that are quality dividend payers who are able to pay and grow their dividends consistently over time. This ensures reliable and growing income stream. And the only way for a company to grow their dividends is if the revenues/profits go up. So in a way, we all hope for the company revenues/profits to continue to up thus allowing the company to raise the dividend year after year. So indirectly we all are looking forward for capital appreciation while looking for dividend growth.
Disclosure: Long on AAPL, GOOG, C, AET and CMG