high road, low road

There's something counterintuitive going on in my portfolio that deserves a closer look.
My best performing equities tend to be higher-dividend, lower capital-growth rate stocks.
The common wisdom in DG investing says to find companies with steady earnings growth rates, steady dividend growth rates and lower payout ratios. These should perform well over the long run as rising earnings drive both the stock price and dividend payout.

I think what gets lost in that logic is that the growth in your position can be due to capital appreciation, share count growth, dividend growth, or all of the above.

Your high dividend yield company may have modest capital growth, but combine that with a big dividend and reinvestment, your share count ratchets up, your share price grows more leisurely, the dividend rises a bit, along with the modest share price growth. If the dividend is really generous, the share count continues to climb, compounding that big dividend.

Frankly, provided the company's earnings are steady and solid, I'd rather book a larger dividend than hope for sustained growth over time and hope the dividend follows. Companies that aren't growing all that fast can still throw off a lot of cash and, used to re-invest, large dividends lead to rapid accumulation of more stock, compounding the cash return year by year.

If you thrill to see that stock price rise and the value of the position rise with it, choose the faster-growing, lower dividend stock. You aren't quite as motivated by the dividend, perhaps.

If you prefer money in the hand, choose the more modestly growing higher dividend stock, and thrill to the more rapid growth in position as you reinvest those hefty dividends. Look at total growth in the position, or yield on cost, to help figure out the true performance of the individual stock.

that may mean building a spreadsheet...ughh.