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10 High-Quality Dividend Growth Stocks Trading Well Above Fair Value

Published Mon, 15 Apr 2019 08:15:00 -0400 on Seeking Alpha

In a recent companion article, I presented ten high-quality dividend growth stocks that are trading well below fair value. I presented 7-year yield channel charts for each stock to illustrate how the price line has moved lower to meet the undervalued yield line.
This article considers the opposite scenario, presenting ten high-quality dividend growth stocks that are trading well above fair value (at least when considering current yield relative to historical yield patterns).
In my view, it is useful to know when a stock becomes overvalued. I don't want to buy shares of a stock at premium prices. And, in some scenarios, replacing an overvalued stock with an equivalent undervalued stock can be quite lucrative. One could earn a higher yield and also increase the upside potential of your investment dollars. On the other hand, when selling an overvalued stock you're likely making a profit, which will be taxed as capital gains in the case of taxable accounts.
Below, I present yield channel charts for ten high-quality dividend growth stocks trading at overvalued yields. For each stock, I provide a short description of the company, a 7-year yield channel chart created from weekly yield data, and some key metrics to help with a superficial analysis of each stock. In addition to the price and yield, I provide 1-year and 5-year dividend growth rates, as well as the quality indicators used by David Van Knapp in a recent article:
Value Line's Safety Rank Value Line's Financial... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VERIZON COMM 58.27   15.0 3.88 2.41 4.17
PROCTER & GAMBLE 112.33   26.8 4.20 2.98 2.68
INTEL 47.63   10.8 4.42 1.26 2.65
XCEL ENERGY 61.27   24.4 2.51 1.62 2.63
MERCK & CO 85.51   27.0 3.17 2.20 2.60
NEXTERA ENERGY 208.20   34.5 6.04 5.00 2.41
MCDONALDS 203.92   27.0 7.54 4.64 2.27
AFLAC 55.02   13.5 4.08 1.08 1.97
MICROSOFT 137.78   30.6 4.50 1.84 1.34
VISA 173.85   35.9 4.84 1.00 0.58


Older articles featuring Verizon Comm (VZ):
What Is It To Be A Canadian Dividend Investor?
10 Dividend Growth Stocks For June 2019
The Retiree's Dividend Portfolio - Jane's May Update: Women And The Challenge Of Retirement
The Retirees' Dividend Portfolio - John And Jane's May Taxable Account Update: Monthly Income Record
Fed's QE Infinity Will Drive A Flight To Yield
The Top 3 Dividend Stocks For June
Dividend Portfolio Review: New Dividend Record For May
Top Holdings Of Dividend ETFs (Part 2: The Top 7 By Sector In May 2019)
The Retiree's Dividend Portfolio - Jane's April Update: Why You Should Consider Canadian Banks
Dow Dogs Digging: Listing The Top Stocks By Yield And Net Gains For June