dividend growth stocks is one in which there are few dividend cuts and fewer companies that failed to raise their dividends at the expected time. From a valuation standpoint your dividend growth stocks would have out-performed the S&P 500.
When this happens year after year, it is hard to find outstanding values. However, that is not to say they aren't still out there. Of the 250+ stocks I track, 65 (25%) are trading below my calculated fair value. Here are some of the more interesting ones trading at a double digit discount...
Johnson & Johnson (JNJ) is a leader in the pharmaceutical, medical device and consumer products industries.
Fair Value: $115.13 | Recent Price: $99.81 | Yield: 3.0%
The Procter & Gamble Company (PG) is a leading consumer products company that markets household and personal care products in more than 180 countries.
Fair Value: $92.28 | Recent Price: $76.27 | Yield: 3.3%
The Coca-Cola Company (KO) is the world's largest soft drink company, and also has a sizable fruit juice business.
Fair Value: $53.59 | Recent Price: $41.71 | Yield: 3.3%
Cisco Systems, Inc. (CSCO) offers a complete line of routers and switching products that connect and manage communications among local and wide area computer networks employing a variety of protocols.
Fair Value: $36.93 | Recent Price: $28.62 | Yield: 3.0%
Omega Healthcare Investors Inc. (OHI) is a real estate investment trust (REIT) that invests in income-producing healthcare facilities, mainly long-term care facilities located in the United States.
Fair Value: $47.52 | Recent Price: $35.39 | Yield: 6.1%
AT&T Inc. (T) provides telephone and broadband service and holds full ownership of AT&T Mobility (formerly Cingular Wireless)
Fair Value: $45.69 | Recent Price: $34.74 | Yield: 5.5%
Emerson Electric Co. (EMR) designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial and consumer markets around the world.
Fair Value: $66.00 | Recent Price: $50.00 | Yield: 3.7%
Microsoft (MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite.
Fair Value: $63.01 | Recent Price: $47.40 | Yield: 2.7%
Lockheed Martin Corp. (LMT), the world's largest military weapons manufacturer, is also a significant supplier to NASA and other non-defense government agencies. LMT receives about 93% of its revenues from global defense sales.
Fair Value: $287.49 | Recent Price: $210.48 | Yield: 3.0%
Texas Instruments Inc. (TXN) is one of the world's largest manufacturers of semiconductors, this company also produces scientific calculator products and DLP products for TVs and video projectors.
Fair Value: $69.30 | Recent Price: $52.23 | Yield: 2.8%
Health Care Property Investors, Inc. (HCP) is a California based equity-oriented real estate investment trust that has direct or joint venture investments in health care-related facilities across the U.S.
Fair Value: $53.04 | Recent Price: $37.75 | Yield: 5.9%
Exxon Mobil Corp. (XOM), formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company.
Fair Value: $109.38 | Recent Price: $78.55 | Yield: 3.7%
I calculate Fair Value weighing The Mid-2 Price and the NPV MMA Price. The wieght depends on where we are in the cycle. Currently it is weighted as 25% Mid-2 price + 75% NPV MMA price. The Mid-2 Price considers four fair value calculations, Avg. High Yield Price, 20-Year DCF Price, Avg. P/E Price and Graham Number, the highest and lowest fair values are excluded and the remaining two calculations are averaged to calculate the Mid-2 price. The NPV MMA Price is where the NPV MMA value equals the NPV MMA target.
Needless to say, we need to consider a lot more than just valuation when making a stock purchase. As dividend growth investors, I would argue that dividend fundamentals are more important than valuation. As long-term buy and hold investors, we can over-come paying too much for a great stock with time. However, time is unlikely to help a fairly valued stock with poor dividend fundamentals.
Full Disclosure: Lonh JNJ, PG, KO, CSCO, T, EMR, MSFT, LMT, TXN, HCP, XOM in my Dividend Growth Portfolio, and long OHI in my High-Yield Portfolio. See a list of all my dividend growth holdings here.
- Dividends vs. Stock Buybacks
- 5 Lessons Learned About Investing In Dividend Growth Stocks
- 6 High-Yielding Mega-Cap Stocks
- Dividend Investors Should Focus On Stocks, Not The Market
- The Secret Ingredient of Dividend Growth Stocks
Tags: JNJ, PG, KO, CSCO, OHI, T, EMR, MSFT, LMT, TXN, HCP, XOM,
Popular Posts - Last 7 days
Throughout history there have always been great companies that stand head-and-shoulders above their peers and the competition. They are lov...
William P. Bengen is an author and a certified financial planner. In 1994 he published a study concluding that if retirees withdrew 4% ( the...
Linked here is a detailed quantitative analysis of Cisco Systems, Inc. (CSCO). Below are some highlights from the above linked analysis: ...
Each Sunday I highlight any notable articles that I came across over the past week. Though I may not always agree with each of the articles ...
Linked here is a detailed quantitative analysis of Walgreens Boots Alliance, Inc. (WBA). Below are some highlights from the above linked an...
The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their di...
Linked here is a detailed quantitative analysis of Raytheon Company (RTN). Below are some highlights from the above linked analysis: Com...
D4L-Premium Services is designed to provide the busy dividend growth investor with a wealth of relevant information. Each week the D4L-Premi...
Presented below are are my Dividend Growth Stocks portfolio holdings. This is not a recommendation to buy these securities. I have classifi...
Linked here is a detailed quantitative analysis of Abbott Laboratories (ABT). Below are some highlights from the above linked analysis: C...