For example, fellow contributor Dave Van Knapp published a valuation guide that's designed to help an investor roughly gauge the fair
value of a dividend growth stock.
For example, fellow contributor Dave Van Knapp published a valuation guide that's designed to help an investor roughly gauge the fair
value of a dividend growth stock.
Fortunately, the process of finding these gems is made a lot easier when you have a clear understanding of how to go about estimating the fair
value of a dividend growth stock.
I leave you with this graphic of the total
value of my Dividend Growth Portfolio since its inception in 2008.
Not exact matches
While Coke and P&G yield more than Hormel today, the disparate
dividend growth shows why you shouldn't get too caught up in the absolute
value of the yields here.
This firm has a long history
of profit
growth, over four decades
of dividend growth, and an executive compensation plan that properly incentivizes executives to create shareholder
value.
Dow Jones Canada Select
Growth IndexSM, Dow Jones Canada Select
Value IndexSM and Dow Jones Canada Select
Dividend IndexSM are servicemarks
of Dow Jones & Company, Inc. («Dow Jones») and have been licensed for use for certain purposes pursuant to a license agreement between Dow Jones and BlackRock Institutional Trust Company, N.A., which has further sublicensed the use
of those servicemarks to BlackRock Asset Management Canada Limited.
Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, increased competition; the Company's ability to maintain, extend and expand its reputation and brand image; the Company's ability to differentiate its products from other brands; the consolidation
of retail customers; the Company's ability to predict, identify and interpret changes in consumer preferences and demand; the Company's ability to drive revenue
growth in its key product categories, increase its market share, or add products; an impairment
of the carrying
value of goodwill or other indefinite - lived intangible assets; volatility in commodity, energy and other input costs; changes in the Company's management team or other key personnel; the Company's inability to realize the anticipated benefits from the Company's cost savings initiatives; changes in relationships with significant customers and suppliers; execution
of the Company's international expansion strategy; changes in laws and regulations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; failure to successfully integrate the Company; the Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the nations in which the Company operates; the volatility
of capital markets; increased pension, labor and people - related expenses; volatility in the market
value of all or a portion
of the derivatives that the Company uses; exchange rate fluctuations; disruptions in information technology networks and systems; the Company's inability to protect intellectual property rights; impacts
of natural events in the locations in which the Company or its customers, suppliers or regulators operate; the Company's indebtedness and ability to pay such indebtedness; the Company's
dividend payments on its Series A Preferred Stock; tax law changes or interpretations; pricing actions; and other factors.
Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, operating in a highly competitive industry; changes in the retail landscape or the loss
of key retail customers; the Company's ability to maintain, extend and expand its reputation and brand image; the impacts
of the Company's international operations; the Company's ability to leverage its brand
value; the Company's ability to predict, identify and interpret changes in consumer preferences and demand; the Company's ability to drive revenue
growth in its key product categories, increase its market share, or add products; an impairment
of the carrying
value of goodwill or other indefinite - lived intangible assets; volatility in commodity, energy and other input costs; changes in the Company's management team or other key personnel; the Company's ability to realize the anticipated benefits from its cost savings initiatives; changes in relationships with significant customers and suppliers; the execution
of the Company's international expansion strategy; tax law changes or interpretations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; the Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the United States and in various other nations in which we operate; the volatility
of capital markets; increased pension, labor and people - related expenses; volatility in the market
value of all or a portion
of the derivatives we use; exchange rate fluctuations; risks associated with information technology and systems, including service interruptions, misappropriation
of data or breaches
of security; the Company's ability to protect intellectual property rights; impacts
of natural events in the locations in which we or the Company's customers, suppliers or regulators operate; the Company's indebtedness and ability to pay such indebtedness; the Company's ownership structure; the impact
of future sales
of its common stock in the public markets; the Company's ability to continue to pay a regular
dividend; changes in laws and regulations; restatements
of the Company's consolidated financial statements; and other factors.
That's because there's a margin
of safety, or a buffer, that's often built right in when you buy a
dividend growth stock that's undervalued, as that favorable gap between price and
value also means there's less
of a possibility that the stock becomes worth less than you paid through some kind
of negative event (corporate malfeasance, investor mistake, etc.).
Let's look at two very important
values for
dividend investors, the yield and the
dividend growth rate
of a stock.
We serve a wide variety
of investors, including
dividend growth investors,
value investors, and pure Valuentum investors, among others.
2017 was a positive year for most factors Quality,
Growth and Momentum showed the strongest performance
Value,
Dividend Yield and Size generated negative returns INTRODUCTION We present the performance
of seven well - known factors on an annual basis for the last 10 years and the full - year 2017.
The average
value of growth the
dividend will have annually.
2018 started negative for the majority
of factors Momentum, Quality and
Growth showed the strongest performance Low Volatility,
Dividend Yield and
Value generated negative returns INTRODUCTION We present the performance
of seven well - known factors on an annual basis for the last 10 years and the
Shares
of growth companies may not pay out the
dividend you get from a
value stock but you can create your own
dividend by selling a few shares.
These positive earnings drivers were more than offset by the combined impact
of several factors, including increased energy - related provisions for credit losses, a 17 basis point decline in net interest margin, moderate
growth of non-interest expenses, the addition
of acquisition - related contingent consideration fair
value changes reflecting performance within CWB Maxium Financial (CWB Maxium), higher preferred share
dividends, and the 20 % increase to CWB's income tax rate in Alberta.
A recent valuation on the stock, via an Undervalued
Dividend Growth Stock
of the Week article, pegged the estimated intrinsic
value near $ 128.
Net interest income and non-interest income both increased 7 %; however, the combined impact
of moderate
growth of non-interest expenses, increased provisions for credit losses, acquisition - related fair
value changes and higher preferred share
dividends resulted in lower earnings.
Net
Value: $ 82,756 Growth Net value: 4.55 % (since 1-1-2017) Fresh Capital: $ 1,511 Dividend Income: $ 673,10 Number of stocks: 25 New addition: Mutual fund, 15 JNJ, 6 RDSA (Drip) and 1 UN (D
Value: $ 82,756
Growth Net
value: 4.55 % (since 1-1-2017) Fresh Capital: $ 1,511 Dividend Income: $ 673,10 Number of stocks: 25 New addition: Mutual fund, 15 JNJ, 6 RDSA (Drip) and 1 UN (D
value: 4.55 % (since 1-1-2017) Fresh Capital: $ 1,511
Dividend Income: $ 673,10 Number
of stocks: 25 New addition: Mutual fund, 15 JNJ, 6 RDSA (Drip) and 1 UN (Drip).
Assuming a 10 % discount rate, a 13 %
dividend growth rate for the next 10 years, and a long - term
dividend growth rate
of 8 %, an estimate
of intrinsic
value comes out to $ 74.07.
Fortunately, it's not impossible — or even all that difficult, really — to estimate the fair
value of just about any
dividend growth stock out there, putting an investor in the «driver's seat» when it comes to making an intelligent investment decision for the long term.
If the current
dividend yield is stable through the years and there is
dividend growth, this also implies that on top
of receiving more
dividend income, your holding has also grown in
value.
-LSB-...] the current price
of under $ 100, I view McDonald's as being rather attractively
valued as a
dividend growth -LSB-...]
However, with yields rising and economic
growth at least stabilizing, this began to change in the second half
of 2016 when classic
dividend plays stumbled while
value started to come back into vogue.
In 1999, near the end
of the highly speculative Internet bubble, the price
of the
growth share reached 89 %, meaning that only 11 %
of the price reflected the
value of current
dividends.
I've decided that the best strategy to help me reach this goal is a combination
of value investing and
dividend growth investing.
We plan to continue to track the market
value of our
dividend stock holdings as well as the annual income
of our
dividend growth stock portfolio throughout time.
Each issue discusses a position's category, its catalysts for
dividend growth & price appreciation, its risks, and our estimate
of fair
value.
A stock's price - earnings (P / E) ratio — its share price divided by its earnings per share — is
of particular interest to a
value investor, as are the price - to - sales ratio, the
dividend yield, the price - to - book ratio, and the rate
of sales
growth.
As a result, as markets shift from a
value to a
growth regime, the performance
of the
dividend growers would suffer less.
With equity, particularly in a diversified portfolio, one can expect over the long term
growth in the
value of the business from a growing
dividend stream, and reinvestment
of retained earnings.
You do get
dividends for the investment that generally rise every year along with economic
growth, but the investors may valuate the
value of those rising
dividends differently when you need to sell your investment.
The typical academic literature is even backed up by the «sustainable
growth model» measure
of valuing stock prices, which suggests that future
growth is largely supported by the percentage
of retained earnings that is reinvested in the corporation (and not paid out as
dividends).
In my view, the most interesting
dividend -
growth opportunities can be found within the financials sector — the largest sector
of the
value - stock benchmarks.
Over the most recent three and five years, the T. Rowe Price
Dividend Growth Fund failed to add a significant amount
of value when compared to a static reference ETF portfolio.
Each issue discusses a current holding: its category, catalysts for
dividend growth & price appreciation, risks, and our estimate
of fair
value.
Hi Bert - I agree that the company is fairly
valued here, and I've received a lot
of comments at SeekingAlpha.com about how people like to shop at TJ Maxx but didn't know about the outstanding
dividend growth record.
«Total stock» funds invest in a combination
of small, mid-size, and large companies with varying degrees
of value (meaning they focus on paying
dividends) and
growth (meaning they focus on increasing the price
of their stock).
This is what happens at today's valuations: Taking the Morningstar
Dividend Investor at face value, I assign Investment A an initial dividend yield of 3.5 % per year and a dividend growth rate of 8 % p
Dividend Investor at face
value, I assign Investment A an initial
dividend yield of 3.5 % per year and a dividend growth rate of 8 % p
dividend yield
of 3.5 % per year and a
dividend growth rate of 8 % p
dividend growth rate
of 8 % per year.
The additional cash
value growth is further compounded through the accumulation
of annual
dividends paid by the carrier.
Therefore, my focus now is on building my capital base through
Value -
Growth Investing, where I switch my focus from companies that pay generous dividends to companies that are in the phase of growth where companies use the money that could have been paid as dividends to fund their expansion plans in
Growth Investing, where I switch my focus from companies that pay generous
dividends to companies that are in the phase
of growth where companies use the money that could have been paid as dividends to fund their expansion plans in
growth where companies use the money that could have been paid as
dividends to fund their expansion plans instead.
To what extent do you view your investing life as an extension
of your personal life?By that I mean to what extent do the personal morals and ethical
values of Tim the man govern the investing decisions
of Tim the
dividend growth investor?If you ask your typical
dividend growth investor if they would be willing to invest in a lucrative but immoral venture, say selling child pornography or crack cocaine, the answer would probably be «absolutely not» regardless
of the yield, valuation or
growth prospects
of the underlying venture.And yet, ask that same investor what their thoughts are about Phillip Morris and they would probably describe what a wonderful investment it is and go on about why you should own it.Do your personal morals ever come into play when buying companies, or do you compartmentalize your conscience, wall it off from the part
of your brain that thinks about investments, and make your investing decisions based on the financial prospects
of the company?The reason why I'm asking is that I keep identifying stocks
of companies that I love from an investing perspective but despise on a human level.I can not in good conscience own any piece
of Phillip Morris knowing the impact that smoking related illness has on the families
of smokers.You might say that the smoker made his choice to smoke so you don't mind taking his money, but his children never made that choice and they are the ones who will suffer when he dies 20 years too soon.
The average
value of growth the
dividend will have annually.
Variable annuities were introduced in the 1950's as an alternative to fixed index annuities which offer a guaranteed contractual rate
of interest in terms
of the cash
value growth of the account, similar to
dividend paying whole life insurance.
The family includes a number
of growth,
value and momentum ETFs, others that screen for low - and high - beta stocks, and a couple
of dividend ETFs.
His short list
of Canadian All Stars combines favourable characteristics for both
value and
growth and has achieved an average annual return over 10 years
of 17.2 % (capital gains only, not counting
dividends) for a period ending in late 2014.
In each issue we discuss a current holding: its category, catalysts for
dividend growth & price appreciation, risks, and our estimate
of fair
value.
The latter part
of that statement is a bit more intricate, but
valuing a
dividend growth stock isn't that difficult.
As part
of a lengthy series
of articles that are designed to educate prospective investors on the
dividend growth investment strategy, fellow contributor Dave Van Knapp wrote a «lesson» that specifically highlights how to go about
valuing dividend growth stocks.