Dividends4Life: Beware Of The Valuations On The Best Consumer Discretionary Dividend Growth Stocks

The Consumer Discretionary sector consists of businesses that sell nonessential, and therefore, discretionary goods and services. Companies in this sector include retailers, media companies, consumer services companies, consumer durables and apparel companies, automobiles and components companies. Since so much of what this sector offers is discretionary items, companies in the sector tend to do best when the economy is strongest. Unfortunately, as we will soon see, so do the prices of their stocks tend to perform best when the market is performing best.

When looking for value for the dividend growth investor within the Consumer Discretionary sector, I found very little to be excited about. Although I did provide a list of potential candidates that I felt were in value, my very best choices I feel are overvalued today, with some more than others. For example, I would see McDonald's as fully valued today whereas Cracker Barrel I have argued is significantly overvalued. My point being, that there are degrees of overvaluation. Nevertheless, I do believe that most of the best choices in the Consumer Discretionary sector as listed above are worth waiting for, but not worth investing in today.

Source: Safe Haven

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