These high-quality, discounted dividend growth stocks have increased their dividend payouts every year for at least 25 years.
The annual rebalancing and subsequent changes to the S&P
500 Dividend Aristocrats Index have produced a new list of 64 Dividend
Aristocrats. These elite companies in the S&P 500 have paid higher
dividends every year for at least 25 consecutive years. S&P Dow Jones
Indices maintains the index and updates it annually in January.
Recently, I ranked the 64 Dividend Aristocrats by quality
scores according to DVK Quality Snapshots. Follow the link to download a
spreadsheet with fundamental and added value data of all 64 Dividend
Aristocrats, courtesy of Portfolio Insight.
This article looks at three Dividend Aristocrats trading
well below my risk-adjusted Buy Below prices. Two stocks are rated Excellent
with quality scores of 23 and 24 (out of 25), respectively, while the other
stock is rated Fine with quality scores of 19. The three stocks are discounted
by at least 16% relative to my Buy Below prices.
I use a survey approach to estimate fair value by collecting
fair value estimates and price targets from several online sources, including
Portfolio Insight, Morningstar, and Finbox. Additionally, I estimate fair value
by dividing each stock’s annualized dividend by its historical 5-year average
dividend yield. With as many as 11 available estimates per stock, I ignore the
outliers (the lowest and highest values) and use the average of the median and
mean of the remaining values as my fair value estimate. Averaging the mean
(average) and median (middle value) helps to adjust for skewness in the
surveyed estimates.
Comments
Post a Comment