Dividend Contenders
Dividend Contenders are mostly fast-growing dividend growth stocks that increase their dividends for 10 to 25 consecutive years. Comprised mostly of past growth stocks that morphed into dividend growth stocks as they became larger. Due to the law of large numbers growth becomes more difficult as companies get bigger. Therefore, it is not uncommon to see them initiate dividend policies in order to continue attracting investors’ attention.
Because of their growth characteristics coupled with dividend yields exceeding most fixed income, the market prices these companies at excessively high valuations. This has gone on for several years but now appears to be coming to an end. In this video I show 20 Dividend Contenders that have seen significant drops in their valuation despite continuing to perform well as operating businesses. As Warren Buffett so aptly put it: “price is what you pay value is what you get.” Extreme valuation inevitably corrects itself and it appears that is now happening with this fast-growing class of dividend paying stocks.
Agilent Technologies (A), Accenture (ACN), Analog Devices (ADI), AES Corp (AES), Blackrock (BLK), First Republic Bank/San Francisco (FRC), Home Depot (HD), Honeywell (HON), Intuit (INTU), ITT Inc (ITT), Quaker Houghton (KWR), Lennox International (LII), Moodys Corp (MCO), MarketAxess Holding (MKTX), Microsoft (MSFT), Nasdaq (NDAQ), Oracle (ORCL), Rockwell Automation (ROK), Starbucks (SBUX), Scotts Miracle Gro (SMG)
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Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.