Yield to Growth Rate 10 x 10 Score

The above 10×10 table allows dividend growth investors to score the best combination of initial dividend yield and dividend growth rate. Fundamentally it answers the question: “What beginning yield and what dividend growth rate do I need to achieve a 10% yield on cost within 10 years?” Each cell contains the number of years it will take to achieve a 10% yield on cost. The lower the number (less time) the better. Cells highlighted in yellow indicate the approximate 10 year point.

Notice that there are two charts (spreadsheet tabs) at the bottom of the spreadsheet. Here are the differences:

10×10 Reinvested

This spreadsheet calculates what initial yield and dividend growth rate would achieve a 10% yield on cost in 10 years with dividends being reinvested at the the same rate. Although it is difficult to reinvest paid dividends at the same rate as the original purchase rates; I prefer to use this chart while I’m reinvesting my dividends during accumulation phase (before retirement).

10×10

The tab on the right is David Van Knapp’s original concept. The calculations exclude reinvested dividends. I see this chart being used during ones distribution phase (during retirement) when dividends are being used for living expenses and not being reinvested. In both charts I have expanded his original chart, which used whole numbers (3%, 4%…) for the x and y coordinates to include more detail using a 25 basis points method ( 3.0%, 3.25%, 3.5%, 4.0%…).

The 10×10 scoring system is a critical tool that I use to help evaluate each of my dividend growth stock purchases. Many thanks to David Van Knapp for sharing this tool which he developed. David has published several articles on Seeking Alpha about his 10×10 yield and growth rate scoring table.

Here is the list of his 10×10 articles which I highly recommend to help you understand and use the 10×10 chart:

 

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