Dividends4Life: 7 Dividend Stocks Priced Below Their Fair Value

Fair value is really a simple concept. Given some select information such as dividends, dividend growth, holding period, discount rate and few other inputs, one can easily calculate the fair value of a stock. As with most simple things, the devil is in the details – the inputs must be correct to calculate a reasonable fair value, otherwise, garbage in, garbage out.

Like most investors, I prefer to have it all – a great dividend stock
at a low price. However, this isn’t always possible. As a dividend investor first and a value investor second, I will always favor dividend fundamentals over fair value when forced to choose. If you make a mistake and pay too much for a great company, eventually time will correct that problem. The same can’t be said for a poor or mediocre company.

Source: Dividends Value


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