Today is Dividend Day.

The series where I teach you 5 things about dividend investing in less than 5 minutes.

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1️⃣ Dividend Growers Outperform

Last week, we talked about the Dow Jones U.S. Dividend 100 Index, the engine behind the SCHD ETF.

It’s only been around since 2011, but S&P did a backtest on the methodology from June 2001 through June 2023.

They found that it outperformed the U.S. Broad Market Index by 1.52% per year.

Here’s how that difference actually stacks up over 20 years for a $50,000 initial investment in each:

• Dow Jones U.S. Dividend 100 Index: $455,489.23

• Dow Jones U.S. Broad Market Index: $346,296.86

Notice in the green circles that the International version also outperforms.

2️⃣ Growth Doesn’t Help If You Pay Too Much

The chart below shows the average 5-year return depending on two things:

• The initial P/E multiple paid

• The Forward 5-Year Annual Sales Growth Rate

Growth doesn’t bail you out if you pay too much.

We just saw this in the recent breakdown of Nike’s P/E multiple contraction.

3️⃣ An Investing Quote

Howard Marks is the founder of Oaktree Capital.

He’s known for his memos on investing.

Warren Buffett has said that when a memo from Howard Marks arrives in his mail, it is the first thing he opens and reads.

One of my favorite Marks quotes ties right in to the chart I just showed you:

4️⃣ The Calculus of Value

Since we just talked about Howard Marks, it only makes sense to share one of his memos next.