We’re all fans of dividends now. Record low interest rates are here to stay and as a result, many investors have jumped on the dividend bandwagon. I don’t blame them, companies that have predictable revenue streams, great balance sheets and a history of rising dividend payments should be the cornerstone of any portfolio. But many of these names are clearly overvalued. North American REIT’s, pipelines, utilities, consumer discretionary stocks and even some telcos are trading at record valuations and well above the overall market P/E ratio. Investors should use caution buying stocks in these sectors. Sure you’ll get the dividend but you could be in for a capital loss if the market starts to reward riskier companies.
Instead of chasing yield, it’s time to look for growth at a cheap price. We think the winning formula is to buy companies with a dividend yield of at least 1.5%, a P/E ratio of 12 times this year’s earnings expectations or less, forward earnings growth of at least 10% for 2012 and a track record of raising dividends over time. Three names that fit this bill are Teva Pharmaceutical, Home Capital Group and CSX Corporation.
Source: Forex Pros
Related Articles:
- 7 Dividend Stocks To Build Your Future Security
- How To Know When To Sell A Dividend Stock
- 7 Dividend Stocks Delivering The Secret To Successful Investing
- 7 High-Yield Dividend Achievers With 25 Years of Increases
- There's Gold In Them Thar Dividend Stocks
Dividend Stocks With Rising Earnings/Low Valuations Better
Posted by D4L | Tuesday, March 06, 2012 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
In short, dividend-bearing stocks are one of the smartest approaches stock investors have available currently. The same is true in strong ec...
-
If your growth-investing days are over (or nearly so) and you're more interested in steady income, start your search with all-weather st...
-
Even in the current inflationary environment, where stocks across a wide variety of sectors are trading down, companies with a favorable his...
-
Finding cheap dividend stocks is critical for another reason. By the time the Federal Reserve meets for the second time in 2023, the central...
-
Investing in passive income can allow you to make money with minimal portfolio management. There are many types of investments to make passi...
-
Many companies make very predictable fixed dividend payments each quarter. When they do, their investors have a pretty good idea of how much...
-
As 2022 wraps up, many investors are likely looking for ways to position their portfolio for more macroeconomic uncertainty next year. After...
-
Linked here is a detailed quantitative analysis of Chevron Corporation (CVX). Below are some highlights from the above linked analysis: Comp...
-
Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is crushing the market this year as value and dividend stocks have pulle...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.