Dividends4Life: Finding Fair Value Stocks To Consider For Your Dividend Portfolio

The concept of fair value is really quite simple. Given a few select inputs such as dividends, dividend growth, holding period, discount rate and few others, 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.

There are still bargin-priced dividend stocks available. However, to find them we may have to dig and scratch more to uncover them. A little time and diligence will reward the patient investor. I calculate Fair Value weighing The Mid-2 Price and the NPV MMA Price. The weight depends on where we are in the cycle. The Mid-2 Price considers four fair value calculations, Avg. High Yield Price, 20-Year DCF Price, Avg. P/E Price and Graham Number, the highest and lowest fair values are excluded and the remaining two calculations are averaged to calculate the Mid-2 price. The NPV MMA Price is where the NPV MMA value equals the NPV MMA target. See...

Source: Dividend Growth Stocks

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