Dividends4Life: Don't Overpay for Quality Dividend Stocks (Video)

P/Es could still rise further, but dividend investors should consider putting a ceiling on their purchase prices so they can maintain desired yields without paying too much. At a fixed P/E, you earn a return that's equal to your dividend yield plus the earnings-growth rate for the companies you own or the market overall. If the P/E is too high and that number comes down, you don't earn as much as the companies actually are providing in the form of return components. So this is making me a little nervous. It's not overvalued territory yet, at least on these shorter-run valuation metrics. Certainly the Shiller P/E will suggest something very different, that the stock market is significantly overvalued.

Source: Morningstar

Related Articles:
- 6 Dividend Growth Stocks With Very Little Debt
- What Determines A Dividend Stock's Yield
- Warren Buffett's Secret To 50% Returns
- 9 High-Yield Energy Stocks Growing Their Dividends
- 6 Stocks With a Sustainable Dividend

Click here to have future posts delivered to you for free!



Post a Comment

Note: Only a member of this blog may post a comment.


Popular Posts Last 30 Days