Get Rich with Dividends Review: The 10-11-12 System
Lichtenfeld's screen for dividend growth stocks is three numbers. Easy to remember, brutal to actually apply. One of them is also the bit dividend influencers tend to fudge.
Rising dividend on £10,000 at 3% start + 5% growth
No extra contributions: same shares, growing payout. The point of dividend growth investing.
The 10-11-12 dividend growth screen
| Filter | Threshold | What it tests |
|---|---|---|
| 10 years | Of consecutive dividend rises | Track record and financial discipline |
| 11% ROE | Return on equity | Profitability and management quality |
| 12% yield on cost | Target over time | Future income, not entry yield |
Lichtenfeld's three filters. Simple to remember, brutal to actually run on UK stocks.
Key takeaways
Dividend growth investing focuses on companies that increase their dividend payouts consistently over time, providing a rising income stream and potential capital appreciation.
The 10-11-12 system by Marc Lichtenfeld helps investors find dividend growth stocks by screening for companies with at least 10 years of dividend increases, a return on equity above 11%, and a yield on cost of at least 12%.
Compounding dividends, where reinvested dividends generate more shares that produce further dividends, can significantly boost long-term investment returns.
UK investors can apply the 10-11-12 system to screen FTSE-listed companies and diversify holdings across various sectors to mitigate risk.