Organic Investments

 

The Three Pillars

Stories tell of ancient Roman engineers standing under their newly constructed arches as the capstone is placed into position: a testament of the engineer’s accountability and understanding of the structural components needed to hold up the arch. Whether this story is true or not, many of these Roman arches remain standing to this day… In investing, a shareholder’s total return is a function of three factors (or pillars): dividend yield, earnings growth and the change (expansion or contraction) of the price-to-earnings multiple. The contribution of each factor to the total return is subject to constant change. Therefore having an understanding of each factor’s past and expected future contri

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