Investing

Investing Idea - Dividend Growth

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  • Oct 12th, 2019 3:08 pm
[OP]
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Dec 14, 2010
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EuRaFree wrote:
Oct 29th, 2018 6:12 pm
Hi Rod,
What's your intake on CGNX? It hit 52w low. And after Q3 earnings another 10% down today. However, they increased the dividend (growing for 8 years) and authorized another 200m buyback. 800k in cash and no debt.
It looks very attractive now I think.

Appreciate your opinion on this one.
CGNX was very overvalued and has now come to a better valuation. If you consider that it's estimated to grow about 17% for FY19, there's little upside for now - and it has come down hard given that estimates for this year were much lower:

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The companies covering Cognex have a good tracking record in getting estimates properly; for the last 20 years, CGNX has traded at a PE between 30 and 35, so if targets are met next year, prices might continue to follow this pattern. However, I've noticed that the market seems to start to care now less for revenue and more for operating margin - which has knocked down a lot of the Nasdaq stocks. I would wait another 5% or 10% before adding some, if I was going to buy it.


Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

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[OP]
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Eaglesfan99 wrote:
Oct 31st, 2018 8:04 pm
Hi Rod

I came across TFI international.. a serial dividend increased and a surging business.. but I’m surprised it’s not on your watchlist.. is it because it’s good only during good times of the exonomy?? It is a pretty good growth stock
I'm long TFII as it's a holding in one of my trading models. The reason it never made to my investing list is because dividends were cut in 2008, and I typically like a tracking record of earnings growth for at least 10 years without dividend cuts. TFII showed a nice recovery and estimates are for further growth. Fairly valued right now as well.

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Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

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Jackson75 wrote:
Nov 13th, 2018 11:03 pm
Hi Rod,

What do you think of Pepsi? I am thinking to buy and hold. The dividend payout is not bad?

Thank you in advance.
Love the company, they have a huge empire, really well managed and it's presently fairly valued:

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Their payout ratio is very reasonable, this is how dividends looks like compared to free cash flow, showing that PEP has enough cash after funding operations and capital expenditures, to pay investors through dividends and share buybacks.:

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Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
Jr. Member
Nov 21, 2015
180 posts
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Vancouver
rodbarc wrote:
Nov 17th, 2018 10:17 pm
Love the company, they have a huge empire, really well managed and it's presently fairly valued:

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Their payout ratio is very reasonable, this is how dividends looks like compared to free cash flow, showing that PEP has enough cash after funding operations and capital expenditures, to pay investors through dividends and share buybacks.:

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Rod
Thank you Rod! Great information as usual. I bought myself some PEP. Went up a bit today! RFD effect lol!
Deal Addict
Mar 4, 2009
1317 posts
308 upvotes
Toronto
Hey Rod,

What do you think about Canadian Banks at current price? BNS is often mentioned by many but TD and RY are also close to 52 weeks low.
Was waiting for ENB and TRP to drop but maybe banks are better value at the moment.

Thanks in advance.
Newbie
Jul 9, 2010
51 posts
14 upvotes
Montréal
Hi Rod,
BOS is one of the stocks in Materials sector on your watchlist, what do you think at current price?
Thank you
Jr. Member
Sep 27, 2010
147 posts
42 upvotes
Toronto
@rodbarc Looks like Prairie Sky Royalty (PSK) is at a low price. Any thoughts?
Deal Addict
Mar 4, 2009
1317 posts
308 upvotes
Toronto
Hey Rod,
One more company I want your opinion on. HDI. It's on your Graham list so I know it passed those fundamental checks but in general what are your thoughts?
I understand that Graham method is suppose to take the emotions out of it but curious.
[OP]
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Dec 14, 2010
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last_sd wrote:
Nov 20th, 2018 6:41 pm
Hey Rod,

What do you think about Canadian Banks at current price? BNS is often mentioned by many but TD and RY are also close to 52 weeks low.
Was waiting for ENB and TRP to drop but maybe banks are better value at the moment.

Thanks in advance.
Canadian Banks are priced at an excellent valuation, in my opinion. BNS offers a nice dividend with the recent price decline, and earnings are estimated to continue to grow. We had this kind of undervaluation before, and price always came to follow earnings. Same with periods of overvaluation. As a long term holding, it's a straight-forward buy. BNS declared its initial dividend at the rate of 3% per annum on July 1, 1833. Payments have been made continuously ever since. This practice, coupled with the Bank's strong earnings growth, has led to dividend increases in 43 of the last 45 years.

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TD and RY are also undervalued:

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I believe the banks have a better growth perspective than ENB and TRP, but I like ENB's yield and dividend growth path (and the fact that they are well on track to deleverage):

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Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
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kyogyk wrote:
Nov 20th, 2018 8:44 pm
Hi Rod,
BOS is one of the stocks in Materials sector on your watchlist, what do you think at current price?
Thank you
I believe BOS is fairly valued at the current price. First, BOS is very cyclical, as the rubber commodity drastically impact results, but they have been doing a great job in increasing dividends in a fairly sustainable manner.

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Earnings projections are optimistic, but recent results have been weak due to US tariff impact on costs - a trend that we'll might see more often. The main area affected was the automotive segment of Engineered Products (~40% of total revenue in Q3/18), and management expects contract re-pricing negotiations to conclude in Q4/18, so it's too soon to validate that guidance won't be changed. However, the good news is that sales in Rubber Solutions increased decently (21% on raw material cost pass-throughs), and gross margin increased by 2.9% to 13.7%.

Therefore, despite these uncertainties, I think BOS provide a decent exposure on that sector, with great growth potential once the cyclicality upwards resume.


Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
[OP]
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Dec 14, 2010
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I've posted an update regarding the list of companies that I screen with portfolio123, as part of my bi-annual update. This is just a list to consider potential candidates that meet my automated quality and valuation criteria, to potentially add them in someone's watchlist for the long term.

Happy Investing!


Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
Deal Addict
Mar 4, 2009
1317 posts
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Toronto
Was looking into TD, RY, BNS but ended up buying BPY.UN.

Next purchase will probably be one of the banks or pipeline (ENB/TRP)
Member
Mar 4, 2008
433 posts
64 upvotes
BC
Rod, curious to know what is your next buy and why? Thanks.


Also, I've seen your posts in the 'Bitcoin and Ether' thread. I've enjoyed reading your posts.
Newbie
Aug 3, 2017
36 posts
6 upvotes
I like to solicit an opinion on Laurentian Bank. They raised their dividend, twice this year. It now sits at 6.5%, far higher than any other Canuck bank. I'm not looking for a day trading opinion, I'm looking for safety boring, buy and forget and sleep at night opinion. Would LB fit that category? Is the dividend and stock for that matter safe for the next 5-10 years?
Thank you

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