Value Investing News

For a dividend investor, there is not much worse than a stock that cuts or eliminates its dividend. Suddenly, the reason you purchased the stock no longer exists. Many dividend investors, myself included, have a hard and fast rule to immediately sell any stock held as income investment if it cuts its dividend.

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While the S&P 500 Dividend Aristocrats may be the most recognized list of dividend stocks, it is certainty not the largest. Since the Dividend Aristocrats list is limited to only stocks included in the S&P 500 Index, many smaller stocks are excluded. To expand the population of potential investments, many investors look at the dividend growth stocks included in Broad Dividend Achievers™ list.

We all want to find the best value when we buy a stock. One of the oldest metrics used is the price earnings (P/E) ratio. It is calculated as the market value per share divided by earnings per share (EPS). A high P/E ratio infers that investors expect strong future earnings growth. Conversely, a low P/E suggests limited future growth.

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Check out the amazing results of these companies that passed the Graham-Shiller PE10 Ratio stock screen in 2002.

Driven by computers that cost more than the average person will earn in their lifetime the investment markets move at light speed. To keep pace hedge funds, mutual funds, institutional investors and multi-billion dollar money managers spend large sums of money on high-tech tools to give them an edge. So, what chance does a small individual investor have?

This updated PE10 screen now uses income after taxes instead of earning per share and the market cap constraint was lowered from $500 million to $100 million.

This article lists some financially sound stocks with low PE10 and TTM PE ratios inspired by Robert Shiller's Cyclically Adjusted Price Earnings Ratio (CAPE). A simple backtest to 2002 reveals some impressive results.

For many investors, there is no clear conviction as to how they should invest. Today’s investments are guided by what was read yesterday, and the popular media is constantly churning out new and different ideas. Granted, it makes for some “interesting” reads, but it certainty is no way to run a portfolio.

As a dividend growth investor, two of the best dividend lists for further research that I have focused on have been the S&P Dividend Aristocrats and the Dividend Achievers Indexes.

Universal Corporation (UVV), together with its subsidiaries, operates as the leaf tobacco merchants and processors worldwide. It engages in selecting, procuring, buying, processing, packing, storing, supplying, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. This dividend champion has raised dividends for 39 consecutive years.