I am not a dividend investor. However I’ve had a bit of an epiphany surrounding the dividend investing community and have come up with the following question:
*Explain how what you are doing isn’t just large cap value investing with a preference for cash flow.*
Seriously. All the stocks and ETF’s I see this community of investors like fit these factors like a glove. SCHD, VYM, and NOBL, all ETF’s that pay solid yields. What do they have in common? They’re made up of large cap value stocks.
VZ, MO, PG, EMR, all large cap value just to throw few individual companies out there. But the really telling part is the specific economic sectors: telecoms, utilities, consumer staples, industrials, and energy. Boring low growth sectors with good book values, low P/E’s and high cash flow.
My final thesis is that dividend investing is really just having a factor preference for large cap value stocks. I’m willing to hear out any technical reasons for why it may be different