Investing

Investing Idea - Dividend Growth

  • Last Updated:
  • Jul 24th, 2017 11:41 am
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Deal Addict
May 22, 2003
2086 posts
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Vancouver
^Thanks! XOM is on my watchlist and I'm getting close to trigger point.
Deal Addict
Jan 1, 2004
1504 posts
71 upvotes
Thanks for sharing. Will take a look.

He also recommended UPS and looks like attractive valuation. Still debating.
Chance7652 wrote:
Apr 19th, 2017 9:01 pm
Interesting article by Chuck Carnevale about a midcap auto dealership, NYSE:PAG. I hadn't heard about them before reading the article and have added it to my watch list.

https://seekingalpha.com/article/406349 ... lain-sight
Deal Addict
Jun 3, 2009
3519 posts
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Montreal
sfrancis wrote:
Apr 19th, 2017 9:09 pm
Thanks for sharing. Will take a look.

He also recommended UPS and looks like attractive valuation. Still debating.
Using FASTGraphs, UPS looks no where as attractive as FDX from a total return standpoint but does offer a much higher dividend yield. I am waiting for the dusk to settle before initiating a position in the latter.
Newbie
Feb 11, 2009
39 posts
22 upvotes
Richmond Hill
Hi Rod,

Do you think ENB and ENF are still good buy at current price?
Member
Dec 2, 2014
358 posts
101 upvotes
London, ON
yazon wrote:
Apr 20th, 2017 3:06 pm
Hi Rod,

Do you think ENB and ENF are still good buy at current price?
I've been adding to ENF for a ~30 year hold at this price.
Member
Nov 1, 2010
389 posts
49 upvotes
Hello Rod,

Has CAE even been on your radar or never fairly valued?
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cn_habs wrote:
Apr 18th, 2017 1:05 pm
Are you going to add more of EQB given the recent drop for macro factors out of the company's control? Thanks.
Yes, I've added both EQB and HCG recently with their drop as I haven't seen anything that substantially impacts their business model or fundamentals. Earnings are coming up and will give better insight - but even if they disappoint, I'd need several years of declining earnings and no management reaction to stop partnering with them. Their recent move to diversify will help mitigate risks from the so-called real estate bubble.


Rod
Jr. Member
Feb 26, 2017
136 posts
32 upvotes
Hi Rod,

I currently own BIP and I'm looking at BAM and NYSE:MIC. How do you think the value looks for these three stocks?
Newbie
Mar 14, 2009
60 posts
16 upvotes
Woodbridge
Rod, any implications or opportunities you see based on the tariff discussions, aside the current bump based on lumber futures?
Sr. Member
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May 29, 2008
506 posts
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Rod, what do you think about NYSE:GSK ? I notice it's not on your healthcare watch list.
Newbie
Aug 30, 2016
8 posts
1 upvote
One means of factoring in inflation is dividend growth stocks. That’s because as the dividend increases, it could offset or factor out inflation with a high dividend growth rate.

However, there are many different dividend growth stocks in many different sectors. All dividend growth stocks are different, as there are times when a company will issue debt or equity. Such factors can potentially be harmful to the balance sheet or the overall equity of the company.

Therefore take a look at factor like:
  • company growth since beginning
  • dividend yield
  • management of the company
Some of the best dividend growth stocks for 2017 I am investing are are:
JPM
COST
SBUX
[OP]
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yazon wrote:
Apr 20th, 2017 3:06 pm
Hi Rod,

Do you think ENB and ENF are still good buy at current price?
I find ENB fairly valued at the moment, from both operating cash flow and earnings perspective:

Image

Image

From an operating cash flow perspective, ENF looks undervalued to me:

Image


Rod
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123nicolas wrote:
Apr 22nd, 2017 4:21 pm
Hello Rod,

Has CAE even been on your radar or never fairly valued?
CAE is on my list for further consideration, given that they endured the last recession a lot better than the previous one. Their restructuring in 2006, which included reduction of dividends for future growth has been paying off and it's on my list to do a full diligence next year. They are overvalued today in my opinion, but they have been trading typically at a higher P/E since 2014, so this might continue for a while. If I had done my diligence on that company today, I'd start half a position today and half when PE drops to 17.6, which is their recent new historical average.

Image


Rod
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Silvernova wrote:
Apr 26th, 2017 1:19 am
One means of factoring in inflation is dividend growth stocks. That’s because as the dividend increases, it could offset or factor out inflation with a high dividend growth rate.

However, there are many different dividend growth stocks in many different sectors. All dividend growth stocks are different, as there are times when a company will issue debt or equity. Such factors can potentially be harmful to the balance sheet or the overall equity of the company.
I wouldn't make such a general statement regarding issuing debt of equity. In some industries, that's the norm and it's a healthy way to fund acquisition for further grow. Their balance sheet might look worse on a GAAP basis, but this allows further earnings growth - which will then reflect on a higher stock price and a healthier financial position for the long term. One needs to understand why extra equity is being issued, how that works in its industry and how successful that has been for the company in the past.

The same can be said for share buybacks. I see it as positive when shares are undervalued, but I see it as negative (only to benefit financial engineering on poor earnings) if shares are overvalued.
Silvernova wrote: Therefore take a look at factor like:
  • company growth since beginning
  • dividend yield
  • management of the company
Some of the best dividend growth stocks for 2017 I am investing are are:
JPM
COST
SBUX
Dividend growth is more important than dividend yield. But most importantly, earnings growth is what drives total return in the long run. I personally don't like JPM. They always had erratic earnings and didn't handle the last recession well. They are doing great now, but it's hard to tell if it's because they got their act together or because the bull market has been helpful. The best stress test for banks is during recessions:

Image

COST stock price has been growing, but disproportional to earnings, making it very overvalued. SBUX has a much better ratio earnings to stock price growth, but such earnings growth is estimated to slow down. However, I see them fairly valued and trading at a high P/E provided they keep meeting analysts expectations, as they have been doing in the past. SBUX, like any other growth company, will be harshly penalized when that growth declines (likely when they miss analyst estimates), so it's not just a typical dividend growth company.


Rod

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