"A man should look for what is, and not for what he thinks should be."
Yesterday saw a nice increase in the stock price on nice volume pushing the stock price above the 20 day moving average and adding even more confirmation that the stock is moving up. The only thing to notice at this point is that the stock will probably find resistance as it tries to move through $61.00. For a trader this is important information but for a dividend growth investor, all that is needed to know is that this stock is on sale and that this is about as cheap as the price is going to get.
What all this means to me is that I missed the short term bottom on this stock but also that it's not too late to get in even at this slightly elevated price. I don't ever want to get into a stock on its way down and it's difficult, if not impossible, to know where the bottom is until after the stock has actually bottomed out and started heading back up. Unfortunately I missed the bottom but not by much and luckily I'm not too late to take advantage of this "sale" on the price of this security. This is exactly what I intend to do. I'll be looking to enter this stock today or tomorrow (Friday) with the intent of gaining a foothold in a very good company at a very good price. That's the purpose of technical analysis and that's what value investing is all about.
Yesterday and today were excellent entry points into this stock. Dividend yield is just slightly over 3.00% the P/E ratio is just over 15, the price per dividend ratio is just over 32, and the payout ratio is sitting at 46%. In addition to all of this, weekly options are offered on this stock and they are being priced such that premiums of around 1% can be captured for selling a one week covered call. At this price this stock offers both future capital gains as well as an enormous opportunity to enhance that 3% dividend with multiple times that yield from selling covered call options.