Is The Increase In Volatility Signaling A Dangerous Market Environment?

Introduction

Over the last several weeks stock price volatility has increased significantly above norms.  All of a sudden it is not uncommon to see stock prices moving 5%, 10% or more in a single trading day.  Interestingly, this volatility is occurring both to the upside and the downside.  Common sense would suggest that the intrinsic value of a business cannot change by those orders of magnitude from one day to the next.  Logic dictates that the market is either inaccurately pricing the stocks now or it was incorrectly pricing them yesterday. […]

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Which Is the Better Valuation Metric? The P/E Ratio or the PEG Ratio: Part 1

Introduction

Recently, I have been engaged in rather intense discussions regarding the validity of P/E ratios versus PEG ratios as proper or appropriate valuation metrics.  I generally find these types of debates befuddling for a couple of reasons.  One, they are often a result of a failure to communicate.  Either party or sometimes both parties assume that their adversary holds or supports a specific position which may or may not be a fact. […]

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Why I Am Now Interested In CVS Health Corporation

Introduction

Investing in great companies sits at the core of my investment philosophy.  In this regard, I reject the idea that I invest in the stock market.  To me, the stock market is simply the store I shop in to purchase interests in fine businesses.  In the final analysis, my investment objective is to become a long-term shareholder/partner in a business that I believe can make me money over time. […]

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What Rate of Return Will an Investment in Johnson & Johnson Deliver? Part 2

Introduction

I never invest in a common stock without a clear expectation of the future returns that it can generate for me.  Consequently, I consider this one of the most important steps in my research and due diligence process.  Unfortunately, my experience in dealing with investors has led me to conclude that this important step is rarely taken.  Most investors possess only a vague idea of what they might earn from investing in a given stock.  Many people simply buy a stock hoping that it will go up, and if it pays a dividend, hopeful that the dividend will increase over time. […]

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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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A Comprehensive Look At Dividend Growth Stock Valuations Sector By Sector: Part 2

Introduction

Finding attractively valued dividend growth stocks is getting harder and harder to do.  The overall market has been on a relentless advance for many years now, and high quality dividend paying growth stocks have been leaders.  Consequently, valuations have become extended beyond historical norms and I contend prudence.  Nevertheless, there are attractive dividend growth stocks available if you’re willing to look hard enough.

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Premier Dividend Growth Stocks: Is There Any Value? A Sector By Sector Summary Review: Part 1

Introduction

As a value investor, I must admit to being very frustrated with the valuations I’m seeing on high-quality blue-chip dividend growth stocks.  I have been vigorously searching for fairly valued dividend growth stocks to invest in.  I have thoroughly screened and evaluated every company in the S&P Dividend Aristocrats, all three of the CCC (Champions, Contenders and Challengers) lists produced by David Fish, every dividend paying stock on the S&P 500, Fortune 500, NASDAQ 100, S&P 100 Large-cap, Dow Jones Industrial Average, and even the S&P 400 mid-cap universe.

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