Sunday, 11 November 2012

Future Dividend Income - Norfolk Southern


I like to estimate how much dividend income my stocks will generate for me 20 plus years down the road. It’s how I keep track of my progress towards achieving my goal of at least $80,000 per year in dividends by the time I’m 55. Below is the simulation I ran for my new purchase of NSC.

Simulation

1.        NSC will not pay me a dividend in 2012, as the record date was November 2nd.

2.        I assume dividends are re-invested.

3.        I assume the stock price grows at the same rate as the dividend; I used 7% per year, a fairly conservative number given NSC grew its dividend an average of 22.85% per year over the last 10 years.

As I explained in a previous article,

Initial Yield + Dividend Growth = Total Long-Term Return (± valuation adjustment)

So I can expect: 3.44% + 7% = 10.44% CAGR

By the time I’m 55, my 50 shares of NSC will have become 97 with $861 in annual dividends. And if I make it to 70, dividends will have increased to $3,800. I’ve just secured myself enough Viagra to nail all the grannies in my retirement home.

It’s impossible to predict future dividends, but it's nice to dream.

Age
Year
# Stocks
Dividends
% On Initial
Total Div.
Share value
Total value

Investing $2904.95 @ 10.44%

Investing $2904.95 @ 10.35%


33
2012
50
$2.00
3.44%
$0.00
$58.10
$2,904.95

$2,904.95

$2,904.95
34
2013
50
$2.14
3.68%
$107.00
$62.17
$3,108.30

$3,208.23

$3,205.61
35
2014
52
$2.29
3.94%
$118.17
$66.52
$3,432.88

$3,543.17

$3,537.39
36
2015
53
$2.45
4.22%
$130.51
$71.17
$3,791.35

$3,913.07

$3,903.51
37
2016
55
$2.62
4.51%
$144.14
$76.16
$4,187.26

$4,321.60

$4,307.53
38
2017
57
$2.81
4.83%
$159.19
$81.49
$4,624.51

$4,772.77

$4,753.36
39
2018
59
$3.00
5.17%
$175.82
$87.19
$5,107.42

$5,271.05

$5,245.33
40
2019
60
$3.21
5.53%
$194.18
$93.29
$5,640.76

$5,821.35

$5,788.22
41
2020
62
$3.44
5.91%
$214.45
$99.82
$6,229.79

$6,429.10

$6,387.30
42
2021
64
$3.68
6.33%
$236.85
$106.81
$6,880.33

$7,100.29

$7,048.39
43
2022
66
$3.93
6.77%
$261.58
$114.29
$7,598.80

$7,841.56

$7,777.89
44
2023
69
$4.21
7.25%
$288.90
$122.29
$8,392.30

$8,660.22

$8,582.91
45
2024
71
$4.50
7.75%
$319.06
$130.85
$9,268.65

$9,564.35

$9,471.24
46
2025
73
$4.82
8.30%
$352.38
$140.01
$10,236.52

$10,562.87

$10,451.51
47
2026
75
$5.16
8.88%
$389.18
$149.81
$11,305.46

$11,665.63

$11,533.24
48
2027
78
$5.52
9.50%
$429.82
$160.30
$12,486.02

$12,883.52

$12,726.93
49
2028
80
$5.90
10.16%
$474.70
$171.52
$13,789.86

$14,228.56

$14,044.17
50
2029
83
$6.32
10.87%
$524.27
$183.52
$15,229.86

$15,714.02

$15,497.74
51
2030
86
$6.76
11.64%
$579.02
$196.37
$16,820.22

$17,354.57

$17,101.76
52
2031
88
$7.23
12.45%
$639.48
$210.12
$18,576.65

$19,166.39

$18,871.79
53
2032
91
$7.74
13.32%
$706.26
$224.82
$20,516.50

$21,167.36

$20,825.02
54
2033
94
$8.28
14.25%
$780.01
$240.56
$22,658.92

$23,377.23

$22,980.41
55
2034
97
$8.86
15.25%
$861.46
$257.40
$25,025.05

$25,817.81

$25,358.88
56
2035
100
$9.48
16.32%
$951.42
$275.42
$27,638.27

$28,513.19

$27,983.53
57
2036
104
$10.14
17.46%
$1,050.77
$294.70
$30,524.37

$31,489.97

$30,879.82
58
2037
107
$10.85
18.68%
$1,160.50
$315.33
$33,711.84

$34,777.52

$34,075.88
59
2038
110
$11.61
19.99%
$1,281.68
$337.40
$37,232.17

$38,408.29

$37,602.74
60
2039
114
$12.43
21.39%
$1,415.52
$361.02
$41,120.10

$42,418.12

$41,494.62
61
2040
118
$13.30
22.89%
$1,563.33
$386.29
$45,414.03

$46,846.57

$45,789.31
62
2041
121
$14.23
24.49%
$1,726.58
$413.33
$50,156.34

$51,737.35

$50,528.51
63
2042
125
$15.22
26.20%
$1,906.88
$442.26
$55,393.87

$57,138.73

$55,758.21
64
2043
129
$16.29
28.04%
$2,106.00
$473.22
$61,178.32

$63,104.02

$61,529.18
65
2044
133
$17.43
30.00%
$2,325.92
$506.35
$67,566.80

$69,692.08

$67,897.45
66
2045
138
$18.65
32.10%
$2,568.80
$541.79
$74,622.40

$76,967.93

$74,924.84
67
2046
142
$19.96
34.35%
$2,837.05
$579.72
$82,414.76

$85,003.38

$82,679.56
68
2047
147
$21.35
36.75%
$3,133.30
$620.30
$91,020.84

$93,877.73

$91,236.89
69
2048
151
$22.85
39.33%
$3,460.49
$663.72
$100,525.60

$103,678.57

$100,679.91
70
2049
156
$24.45
42.08%
$3,821.85
$710.18
$111,022.89

$114,502.61

$111,100.28



2 comments:

  1. Damn leave me a few grannies. I hope we don't end up in the same retirement home. You might have a greater supply of viagra...

    ReplyDelete
  2. Forget the Grannies, with that kind of money you might be able to score a few night shift nurses:}

    ReplyDelete