Value Investing News

We all are looking for the perfect dividend stock. In an utopian world, the perfect dividend stock would be one that is both high-yield and provide a high dividend growth rate. Its share price would appreciate ratable with its increasing dividend. All of this would be driven by increasing earnings and cash flow.

If you like buying earning power at a discount, earnings yield is a good place to start. It is one of the most useful metrics available to compare the relative valuation of stocks to one of the more predictive measures of future stock returns: EPS.

According to Bill Miller, Large Cap stocks like XOM and KMB represent a once in a life time opportunity and have not been this cheap since 1951.

To either refute or agree with Bill’s claim we will review a simple metric Earnings Yield.

** FCF/Enterprise Value = Cash Return** E Value = Mkt. Capt + LT Debt – Cash

Dividend Investing is more than just selecting stocks that pay dividends. Successful dividend investing is about selecting stocks with strong fundamentals, which not only generate enough cash to reinvest in the growth of the business, but also generate excess cash to pay a rising payment over time.

What is the primary reason you invest in dividend stocks? For me, it is a means to build a growing income that can be relied on during retirement. One of the beauties of dividend investing is it provides you continuous feedback.

The markets are significantly lower on a strong dollar (NYSE:UUP) and shockingly poor economic news.

Report on (QCOM) The conclusion of the article is pasted in quotes below.