Valuation is a Measurement of Soundness and Not the Primary Total Return Producer: Part 1

Introduction

Much of what I write about is related to the importance of valuation in one way or another.  I do this, because I am a fervent believer that one of the most important metrics that investors should be considering before investing in a stock is the relative valuation of the shares they are purchasing.

To summarize what I’m saying, if they are interested in investing in a company and discover that the current market valuation is very high, I contend they should either wait or look elsewhere for better valuation.  In contrast, if valuation is fair or sound, then I contend they could comfortably go ahead and make the investment.  Finally, if the valuation is significantly undervalued, I contend they might consider investing aggressively. […]

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Flowers Foods a High-Yield Risk Worth Taking

Introduction

There are certain times when being a value investor also implies taking a contrarian approach.  However, the terms “value investor” and “contrarian investor” are not always synonymous.  On the other hand, when faced with a significantly overvalued marketplace like we see today with blue-chip dividend growth stocks, value investing and contrarian investing tend to become one and the same.

The simple fact is that when faced with a strong bull market, true fairly valued dividend growth stocks become very hard to find.  In a strong market, value typically comes about for a reason, and that reason is typically associated with problems.  However, the key to long-term investing success is when you find fair value due to a temporary problem, and not a permanent impairment of the underlying business.

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Here is What I Don’t Want as a Dividend Growth Investor

Introduction

Achieving long-term success as a dividend growth investor implies a long-term buy-and-hold strategy.  The reasons why are simple and straightforward.  The primary objective of a committed dividend growth investor is to achieve a growing dividend income stream.  This primary objective further implies achieving an increasing level of income that can fight inflation while simultaneously being capable of raising their standard of living over time.

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Canadian “Bank-in” for Delicious Yield and Great Value

Canadian “Bank-in” for Delicious Yield and Great Value

Introduction

It is no secret that US blue-chip dividend paying stocks are trading at extremely high valuations relative to historical norms.  Interest rates remain at all-time lows, and investors hungry for yield have turned to blue-chip dividend growth stocks in order to satisfy their appetites.  For the past seven years or so that strategy has worked out quite well on both a capital appreciation and dividend income growth basis.  Seven years is a long time, and the longer that the bull market in blue-chip dividend growth stocks runs, the more complacency it breeds.

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