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Coronavirus Roundtable - Quality Pays For Dividend Investors (Video)

Published Fri, 08 May 2020 12:00:50 -0400 on Seeking Alpha

We continue the coronavirus roundtable series by speaking with Todd Campbell of Limelight Alpha.
He discusses the importance of focusing on quality for dividend investors rather than chasing for yield.
He also shares what ideas his screen is producing, and how he's adjusting his strategies for this period of uncertainty, or not.
by Daniel Shvartsman
Dividend stocks, especially dividend growth stocks, already have something of a built in quality filter. In theory, at least, a company can't pay a dividend unless it has profits, and it can't grow its dividend unless it is growing its earnings.
At the same time, it's very tempting for investors to focus on the size of a dividend, and when a dividend is big, that is often a yellow flag for quality as the market may be expecting a dividend cut. The better quality companies trade at lower dividend yields and likewise higher valuations. So there's a lot to balance out in terms of finding the risk/reward.
Our coronavirus roundtable video series continues with Todd Campbell, who writes as Limelight Alpha Management Partners. He's the leader of Top Stocks For Tomorrow, and he takes a quantitative approach for both dividend and growth stocks. So as applies to this discussion, he talks about the weight he puts on earnings beats and other quality factors, and how he balances out valuation in this picture.

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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ABBVIE 70.83   26.0 2.72 4.28 6.28
GILEAD SCIENCES 66.36   14.4 4.61 2.52 3.76
JM SMUCKER 105.85   22.4 4.72 3.52 3.30
CABOT OIL & GAS 18.65   9.5 1.97 0.36 1.94


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