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Building A Dividend Growth Portfolio From Scratch: 15 'A' Rated Or Better Fairly Valued Opportunities

Published Wed, 17 Oct 2018 23:27:00 -0400 on Seeking Alpha

Introduction We remain in one of the longest bull markets in history. Generally, with bull markets stocks tend to become highly valued. Additionally, we also continue to find ourselves in a low interest rate environment based on historical standards. However, after bottoming out in January 2017, interest rates have steadily increased. Although interest rates remain low based on historical norms, the fear of rates rising in the future has begun to unsettle the stock market.
So far, October 2018 has brought us dropping stock prices. Consequently, there has been the beginnings at least of a correction in the valuations of many high-quality dividend growth stocks. This is important, because for the most part, high-quality dividend growth stocks had become quite expensive. Although the correction has been broad-based, there are certain sectors such as the financial sector and the healthcare sector that have been hardest hit.
Furthermore, although stock prices have generally been falling recently, I think we are far from calling it a true correction and certainly far from calling it a bear market. The following earnings and price correlated FAST Graph on the S&P 500 puts the recent weakness into a clear perspective.
The S&P 500 Current Valuation Based On Past Results The following earnings and price correlated FAST Graph on the S&P 500 since calendar year 1999 illustrates the overvaluation that has become manifest since the Fall of 2013. Moreover, we see that the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ALTRIA GROUP 52.81   16.1 3.28 3.20 6.17
ABBVIE 81.15   23.2 3.49 4.28 5.29
SIMON PROPERTY GROUP 171.48   22.4 7.65 8.20 4.75
PRUDENTIAL FINANCIAL 97.11   11.3 8.57 4.00 3.98
STATE STREET 58.64   9.8 5.97 1.88 3.15
BLACKROCK 433.89   16.3 26.55 13.20 2.99
INTEL 44.57   10.1 4.42 1.26 2.86
JPMORGAN CHASE 108.64   11.7 9.26 3.20 2.86
PEPSICO 130.07   14.7 8.86 3.82 2.85
U.S. BANCORP 51.17   12.2 4.18 1.48 2.85
ILLINOIS TOOL WORKS 149.96   20.0 7.51 4.00 2.68
AMERIPRISE FINANCIAL 144.36   11.0 13.11 3.88 2.61
AMERISOURCEBERGEN 80.44   18.8 4.29 1.60 1.99
COMCAST 42.67   16.2 2.63 0.84 1.94
PRINCIPAL FINANCIAL GROUP 54.92   9.9 5.53 2.16 0.34


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