Category Archives: David Van Knapp

Which Popular Dividend Growth Stocks Are ‘Always’ Undervalued? [Apple Inc.] – Seeking Alpha

Which Popular Dividend Growth Stocks Are ‘Always’ Undervalued? [Apple Inc.] – Seeking Alpha: This article is a companion to “Which Popular Dividend Growth Stocks Are Always Overvalued?”

Coming from the opposite direction from that article, here I use F.A.S.T. Graphs to identify which stocks from the 59 most commonly held dividend growth stocks persistently have traded at valuations that are lower than what F.A.S.T. Graphs presents as “earnings justified” valuation.

On the graphs in this article:

The orange line represents “fair value” as determined by F.A.S.T. Graphs, which apply Ben Graham’s valuation formulas to each stock’s earnings record.

Which Popular Dividend Growth Stocks Are ‘Always’ Overvalued? [PepsiCo, Inc., The Clorox Co, Paychex, Inc.] – Seeking Alpha

Which Popular Dividend Growth Stocks Are ‘Always’ Overvalued? [PepsiCo, Inc., The Clorox Co, Paychex, Inc.] – Seeking Alpha: I have noticed a couple of themes emerging in dividend articles over the past year. One theme revolves around valuation, with some suggesting that dividend stocks were in a bubble or significantly overvalued. Another theme has centered on “high quality” companies, and whether investors need sometimes to “pay up” for quality.

Putting the two themes together very recently, there has been discussion about Coca-Cola (KO) being a high quality company that never seems not to be overvalued. In the course of those discussions, it became clear that many feel that KO “always” trades at a premium valuation, so if you want to own it, you might as well accept that you’ll need to pay up for it.

10 By 15: What Happens With Low-Yield High-DGR Stocks – Seeking Alpha

10 By 15: What Happens With Low-Yield High-DGR Stocks – Seeking Alpha: In “10 by 10 The Interaction of Dividend Yield and Growth,” I discussed the interaction of various initial dividend yields (IY) with various dividend growth rates (DGR).

The context of the original 10 by 10 concept relates to achieving a target: 10% yield on cost in 10 years from dividend increases alone. In other words, given a particular starting yield, how long does it take to get to the target for various rates of dividend growth? (Dividend reinvestment, which speeds up the process, is ignored.)

Dividend Growth Portfolio: Semi-Annual Review [Intel Corporation, AT&T Inc., McDonald’s Corporation, Chevron Corporation, PepsiCo, Inc., Omega Healthcare Investors Inc, Lorillard Inc., Darden Restaurants, Inc., Hasbro, Inc., BHP Billiton plc (ADR)] – Seeking Alpha

Dividend Growth Portfolio: Semi-Annual Review [Intel Corporation, AT&T Inc., McDonald’s Corporation, Chevron Corporation, PepsiCo, Inc., Omega Healthcare Investors Inc, Lorillard Inc., Darden Restaurants, Inc., Hasbro, Inc., BHP Billiton plc (ADR)] – Seeking Alpha: Disclosure: I am long BBL, HAS, MCD, T, CVX, KMP, OHI, LNT, PEP, DRI, LO, PM. (More…)

I have a confession to make. I basically skipped the April, 2013 Portfolio Review for my public Dividend Growth Portfolio (DGP). I got caught up in the excitement of the DGP’s 5th anniversary and kind of let the formal Portfolio Review slide. This is a catch-up.

For those not familiar, the DGP is a public, real-money, real-time portfolio that I launched in June, 2008. It is public and transparent to demonstrate the results that can be achieved with the dividend growth strategy. Questions are suggestions are welcome, but ultimately I am the CIO (Chief Investment Officer) for the DGP, and all decisions about it are mine.

High DGR Dividend Growth Challengers [Baxter International Inc., Safeway Inc., Darden Restaurants, Inc., Rayonier Inc., Rogers Communications Inc. (USA), Lazard Ltd, STERIS Corp, Equity Lifestyle Properties, Inc., United Financial Bancorp, Inc.] – Seeking Alpha

High DGR Dividend Growth Challengers [Baxter International Inc., Safeway Inc., Darden Restaurants, Inc., Rayonier Inc., Rogers Communications Inc. (USA), Lazard Ltd, STERIS Corp, Equity Lifestyle Properties, Inc., United Financial Bancorp, Inc.] – Seeking Alpha: A week ago, I published an article, “Considering High-DGR Dividend Growth Stocks,” in which I analyzed the Dividend Champions (CCC) for lower yielding stocks than I usually analyze. I looked for stocks with minimum yields of 2.0% compared to my usual 2.7%. To compensate for the lower yields, I demanded higher dividend growth rates (DGR) than I usually use: I set my DGR cutoff at 8.5%.

Considering High-DGR Dividend Growth Stocks – Seeking Alpha

Considering High-DGR Dividend Growth Stocks – Seeking Alpha: There is a cohort of dividend growth stocks that have always fallen below my minimum threshold of 2.7% yield, but which have high dividend growth rates that make them attractive to some investors. These stocks come up often in comments and portfolio holdings as among the favorite dividend growth stocks.

These high dividend growth rate (DGR) issues seem particularly attractive to younger investors, who often feel that with several decades of compounding ahead of them, high DGRs are more important than high yields. They feel that they have plenty of time to develop excellent dividend streams. Examples of names that typically come up are IBM (IBM), Wal-Mart (WMT), and Exxon-Mobil (XOM).

Buckets, Cisterns, Asset Allocation, And Retirement – Seeking Alpha

Buckets, Cisterns, Asset Allocation, And Retirement – Seeking Alpha: It is useful to be able to visualize what funding retirement is all about. Rows and columns of numbers on a spreadsheet are a great tool, but sometimes a picture is worth a thousand columns.

This article provides an overview of three ways to visualize what’s going on when you think comprehensively about all of your financial assets for retirement.

Dividend Growth Investors: Focus On Valuation Rather Than Price – Seeking Alpha

Dividend Growth Investors: Focus On Valuation Rather Than Price – Seeking Alpha: This article is inspired by a series of comments on Bob Wells’ recent excellent article about retirement investing strategies.

A comment thread developed around the idea of stock prices, specifically about the difficulties an investor can experience buying more of a stock that he or she purchased for a lower price in the past. The point I made in the comments, and that I want to expand on here, is that if you shift your focus from price to valuation, the decision becomes clearer and less emotional.

Buffett On Berkshire’s Dividend Policy – Seeking Alpha

Buffett On Berkshire’s Dividend Policy – Seeking Alpha: In Berkshire Hathaway’s (BRK.A) (BRK.B) most recent letter to shareholders, Warren Buffett gives perhaps his most complete explanation for BRK’s zero-dividend policy. (See pp. 19-21.)

I am a dividend growth investor, so I do not own shares in BRK. However, I have tried to learn as much as I can about how Buffett invests, because he loves to purchase shares of dividend-paying companies. He has expressed his enjoyment of dividends numerous times. And BRK’s wholly owned companies, of course, forward dividends to headquarters like clockwork. Indeed, the managers of those companies earn bonuses based on the cash that they send to Omaha.

Beating Back Fear For Income Investors – Seeking Alpha

Beating Back Fear For Income Investors – Seeking Alpha: Whenever there is market volatility — especially downward volatility — certain kinds of articles spring up on Seeking Alpha and other sites like crabgrass in the summer. You know the kinds I mean. They have titles like “Buy And Hold Fails Again,” or “What To Do About The Coming Crash,” or “Market Downturn Is Inevitable; Time To Go To Cash?”

The common theme is fear. Fear of losing money as prices slide downward for who knows how long. Fear of giving up in just a few weeks or days the gains that it took several years to achieve. Fear of falling behind a benchmark and never catching up. Fear of underperforming your neighbor.

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