The 6 Greatest Dividend Investors of All Time
By: Jonathan Wolfgram,
The 6 greatest dividend investors of all time use dividend accumulation and reinvestment to amass million and billion dollar portfolios.
Dividends are a powerful tool. While the cash distributions from dividend-paying equities can provide wonderful passive income for living expenses, reinvested dividends have the potential to grow exponentially and bring a far greater payday in the future.
The greatest dividend investors of all time knew this — they recognized that dividends are not only a convenient cash payout, but a sign of a good company with regular profit and steady growth. They reinvested their dividend income over years or even decades and reaped the rewards as stock prices flew higher and higher.
Patience Rewarded the 6 Greatest Dividend Investors of All Time
While some of the investors on this list are billionaire fund managers and famed economists, others are unremarkable by comparison. They do, however, serve as more perfect examples of how the power of dividends, when combined with patience, can build a massive portfolio. These average citizens are some of the greatest dividend investors of all time, not due to their brilliance or revolutionary investing strategy, but because they took no shortcuts and made millions doing exactly what they were supposed to do: invest, reinvest and wait.
While not everyone can be a Warren Buffett, patience and due diligence can lead any investor to hold multi-million dollar portfolios paying thousands of dollars every month. So, made of both average Joes and investing icons, here is the list of the six greatest dividend investors of all time.
The 6 Greatest Dividend Investors of All Time, #6:
Ronald Read was an average Joe investor lacking an MBA, finance degree, or notable professional experience. He did have, however, an $8 million dividend portfolio paying $20,000 per month at the time of his death in 2015.
The story of Ronald Read is largely inspirational in the simplicity of his investing strategy: buy blue-chip, dividend-paying stocks, then hold. Read reinvested nearly all of his dividends and held onto much of his portfolio for decades, patiently accumulating income and additional shares.
The 6 Greatest Dividend Investors of All Time, #5:
Grace Groner is a lesser-known investor who embodied the principle of buy, hold and reinvest. Groner worked as a secretary at Abbott Laboratories (NYSE:ABT) for 43 years. Early in her career in 1935, she invested $180 in three shares of Abbott. She never sold and instead opted to reinvest all of her dividends. After 75 years, she had $7 million.
Groner was not a fund manager or famed economist, unlike most others on this list, but she is a perfect example of the “millionaire next door” that had no incredible brilliance about her or unique strategy behind her success. She simply invested in quality dividend-paying equities, waited, and let the dividends do the work.
The 6 Greatest Dividend Investors of All Time, #4:
Bill Ackman, an activist investor mentored by Warren Buffett, is the billionaire fund-manager of Pershing Square Holdings. His fund has outperformed the S&P 500 as well as his mentor’s Berkshire Hathaway (NYSE:BRK_B) in the last three years. More notably, over half (roughly 60%) of its portfolio holdings are invested in dividend stocks.
Outside of dividend investments, Ackman is famous for his successful takeovers of Canadian Pacific, Fortune Brands and Allergan. These victories as an activist investor gave him billions of dollars in profits, allowing for more aggressive reinvestment in stable, dividend-paying equities.
The 6 Greatest Dividend Investors of All Time, #3:
Sir John Templeton began managing the Templeton Growth Fund in 1954 and continued to guide its investments through 1992. An investor, trusting Templeton with $10,000 when his management of Templeton Growth Fund began, would have amassed $2 million at the end of 1992 by reinvesting all the dividend payouts .
While Templeton was also widely considered a contrarian, many of his anti-market investments were low-risk, dividend-paying stocks merely overlooked by others. He had a knack for taking extreme bear markets as an opportunity to buy dividend growth stocks, as well as bankrupt companies likely to reinstate their dividend in the near future.
The 6 Greatest Dividend Investors of All Time, #2:
Benjamin Graham was a British-born American investor famous for mentoring Warren Buffett. He is known in investing circles as the “father of value investing” and authored some of the most important investment books written to date: “Security Analysis with David Dodd and The Intelligent Investor.”
Although he was a value investor first, Graham had a strong preference for dividend-paying stocks. He recommended investors refer to the S&P 500’s rating system and only invest in equities with a Dividend rating of B or higher.
What is unique about Graham’s dividend philosophy is his preference for stock dividends over cash — the investor believed they are tax-advantaged whilst offering greater practical and psychological benefits to shareholders.
The 6 Greatest Dividend Investors of All Time, #1:
Warren Buffett is widely considered the greatest investor of all time, and much of his investment strategy relies on collecting dividend payments.
Buffett’s investing style favors consistent high-dividend payments over multiple years, viewing them as a massive “green flag” for a company — signaling a sustainable, profitable business model with the potential to reward shareholders in the long run. A huge amount of profit flowing into Berkshire Hathaway (NYSE:BRK_B) is from dividend investments. In 2021 alone, the company is expected to collect $3.8 billion in dividend distributions.
Berkshire Hathaway itself, however, has only ever paid a dividend to its shareholders once, and Buffett considers it a mistake to this day. The investor prefers to hold cash, believing it is more valuable in his hands to take advantage of reinvestment opportunities than paying distributions to his shareholders. Even though Buffett refuses to pay a dividend himself, so much of his success has relied on dividend income that we can confidently say he is the greatest dividend investor of all time.
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Jonathan Wolfgram is an investment analyst who writes website content at Eagle Financial Publications. He graduated from the University of Minnesota with Bachelor’s degrees in Finance and Philosophy. Jonathan writes for www.DividendInvestor.com and www.StockInvestor.com.