Like most people, I like to buy quality items on sale. In the stock market the same idea applies and it's the key investing strategy to accumulating wealth over time. Buy the securities of quality companies and buy them at the best possible price. Quality companies to me means Dividend Growth Companies. In theory this is not rocket science. In practice it's a little harder than it appears.
When I'm looking to add shares in a Dividend Growth Company to my portfolio, the first place I look is the List of Dividend Aristocrats. This is an easy starting point for me because the criteria for being included on this list is the company's ability to increase their dividends for at least the last 25 years. Without digging any deeper into their fundamentals I know that these companies are interested in sharing their profits with shareholders, which is what's important to me. In fact the two reasons I buy dividend growth companies are (1) the dividend and (2) the growth in that dividend over time.
Generally speaking these are the two reasons most people buy stock in these companies and, for the most part, companies tend to like these types of shareholders. Dividend growth investors won't constantly buy and sell their shares causing volatility in the company's shares. Upper management appreciates this because it reduces stress in the boardroom.
Generally speaking these are the two reasons most people buy stock in these companies and, for the most part, companies tend to like these types of shareholders. Dividend growth investors won't constantly buy and sell their shares causing volatility in the company's shares. Upper management appreciates this because it reduces stress in the boardroom.
“Look to add quality, dividend-paying, blue chips when they become irrationally oversold and undervalued. That is how and when experienced investors create blue chip investment portfolios which serve them well throughout their entire lives with growth of capital and growth of dividend income.” |
So why would dividend growth companies ever go on sale? There's generally two reasons. One reason would be that the entire market is on sale because of the overall economy, or there's something temporarily wrong with the individual company's fundamentals. If it's because of the overall economy then this is a real bargain because if you believe in American Capitalism, the entire market will eventually improve over time. If it's the individual company that's under stress, then you have to discover what specifically is causing the stress and determine if management is strong enough to bring the company back from the brink. In most cases the Dividend Aristocrats have been in this position several times over the last 25 years and managements have been able to solve the problem and continue on, on an upward trajectory.
The companies identified below are companies on the list of Dividend Aristocrats that can be considered "on sale" as compared to their previous quoted prices. I have based this solely on looking at their weekly charts (which takes a longer view of the stock's performance than its daily charts). For the most part the determining criteria is the MACD below the zero line. I generally like to see the MACD bottom out and start to turn up before I actually buy the stock so these companies may have further to go on the downside, but there's no doubt that they are on sale compared to previous periods. Additional confirmation should also be confirmed in the momentum indicators RSI and ADX.
Once again, identifying these companies is not a recommendation to buy or sell securities in these companies. Please do your own homework and be responsible for your investment decisions.
The companies identified below are companies on the list of Dividend Aristocrats that can be considered "on sale" as compared to their previous quoted prices. I have based this solely on looking at their weekly charts (which takes a longer view of the stock's performance than its daily charts). For the most part the determining criteria is the MACD below the zero line. I generally like to see the MACD bottom out and start to turn up before I actually buy the stock so these companies may have further to go on the downside, but there's no doubt that they are on sale compared to previous periods. Additional confirmation should also be confirmed in the momentum indicators RSI and ADX.
Once again, identifying these companies is not a recommendation to buy or sell securities in these companies. Please do your own homework and be responsible for your investment decisions.
“There are no bad days in the market. When the market is down, you’ve got bargains, and it’s lovely to think of what you are buying at low prices. When the market is up, the bargains have gone, but you’re rich.” |
AT&T provides telecommunications services to consumers, businesses, and other providers in the United States and internationally. The company operates in three segments: Wireless, Wireline, and Other. The Wireless segment offers various wireless voice and data communication services, including local wireless communications services, long-distance services, and roaming services. The Wireline segment provides data services, such as switched and dedicated transport, Internet access and network integration, U-verse services, and data equipment; businesses voice applications over IP-based networks; and digital subscriber lines, dial-up Internet access, private lines, managed Web-hosting services, packet services, enterprise networking services, and Wi-Fi services, as well as local, interstate, and international wholesale networking capacity to other service providers. The Other segment provides application management, security services, integration services, customer premises equipment, outsourcing, government-related services, and satellite video services.
Chevron, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, and production of crude oil and natural gas; liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and processing, transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil and refined products; transporting crude oil and refined products through pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing commodity petrochemicals and fuel and lubricant additives, as well as plastics for industrial uses.
Cincinnati Financial Corporation engages in the property casualty insurance business in the United States. It operates in five segments: Commercial Lines Property Casualty Insurance; Personal Lines Property Casualty Insurance; Excess and Surplus Lines Property Casualty Insurance; Life Insurance; and Investments. The Commercial Lines Property Casualty Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers’ compensation. The Personal Lines Property Casualty Insurance segment provides coverage for personal auto and homeowners, as well as other insurance products, including dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Property Casualty Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations. The company’s Life Insurance segment provides term life insurance; universal life insurance; whole life insurance; and worksite products, including term, whole life, universal life, and disability insurance offered to employees through their employer.
Consolidated Edison, through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses. The company, through its subsidiary, Consolidated Edison Company of New York, Inc., provides electric services to approximately 3.3 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx and parts of Queens, and Westchester County; and steam to approximately 1,717 customers in parts of Manhattan. It operates 62 area distribution substations and various distribution facilities; 39 transmission substations and 62 area stations; electricity generation plants with an aggregate capacity of 706 megawatts that run with gas and fuel oil; 4,360 miles of mains and 387,881 service lines for natural gas distribution; and 5 steam-only generating stations. The company, through its subsidiary, Orange and Rockland Utilities, Inc., also supplies electricity to approximately 0.3 million customers in southeastern New York, and in adjacent areas of northern New Jersey and northeastern Pennsylvania; and gas to approximately 0.1 million customers in southeastern New York and adjacent areas of northeastern Pennsylvania. It operates 555 circuit miles of transmission lines; 14 transmission substations; 62 distribution substations; 85,474 in-service line transformers; 3,781 pole miles of overhead distribution lines; and 1,794 miles of underground distribution lines, as well as 1,777 miles of mains for natural gas distribution and 77 miles of mains for natural gas transmission.
Family Dollar Stores operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the United States. Its merchandise assortment includes consumables, such as household chemicals, paper products, food products, health and beauty aids, hardware and automotive supplies, pet food and supplies, and tobacco; and home products comprising blankets, sheets, towels, housewares, giftware, and home décor products. The company also provides apparel and accessories consisting of men’s and women’s clothing products, boys’ and girls’ clothing products, infants’ clothing products, shoes, and fashion accessories; and seasonal and electronic products, such as toys, stationery and school supplies.
HCP Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. It primarily invests in properties serving the healthcare industry including sectors of healthcare such as senior housing, life science, medical office, hospital and skilled nursing. The fund also invests in mezzanine loans and other debt instruments. It engages in acquisition, development, leasing, selling and managing of healthcare real estate and provides mortgage and other financing to healthcare providers.
McCormick and Company manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates in two segments, Consumer and Industrial. The Consumer segment offers spices, herbs, seasonings, and dessert items directly, as well as through distributors or wholesalers to various retail outlets, including grocery stores, mass merchandise stores, warehouse clubs, and discount and drug stores, as well as supplies private label items. The Industrial segment provides seasoning blends, spices and herbs, condiments, coating systems, and compound flavors directly, as well as through distributors to food manufacturers and foodservice customers.
PepsiCo operates as a food and beverage company worldwide. The company operates worldwide in two general areas: the Foods division and the Beverage division. The company also serves wholesale and foodservice distributors, grocery and convenience stores, mass merchandisers, membership stores, and authorized independent bottlers through direct-store-delivery systems, customer warehouses, and distributor networks.
Stanley Black and Decker provides power and hand tools, mechanical access solutions, and electronic security and monitoring systems for various industrial applications primarily in the United States, Canada, Europe, and Asia. The company’s Construction & Do It Yourself segment offers professional corded and cordless electric power tools and equipment. Its Security segment provides electronic security systems and electronic security services. The company’s Industrial segment offers hand tools, power tools, and engineered storage solution products; engineered fasteners; and custom pipe handling machinery, joint welding and coating machinery, weld inspection services, and hydraulic tools and accessories to the automotive, manufacturing, aerospace, and natural gas pipeline industries.
Target Corporation operates general merchandise stores in the United States. It offers household essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; hardlines comprising music, movies, books, computer software, sporting goods, and toys, as well as electronics that consist of video game hardware and software; apparel and accessories, such as apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate apparel, jewelry, accessories, and shoes. The company also provides food and pet supplies, including dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and pet supplies; and home furnishings and décor, such as furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home improvement, automotive, and seasonal merchandise comprising patio furniture and holiday décor. In addition, it offers in-store amenities.
The Chubb Corporation, through its subsidiaries, provides property and casualty insurance to businesses and individuals. It offers personal insurance products, such as automobile, yachts, homeowners, and other personal coverage products, as well as personal accident and supplemental health insurance products. The company also provides commercial insurance products, including multiple peril, primary liability, excess and umbrella liability, automobile, workers’ compensation, and property and marine insurance products. In addition, it offers specialty insurance products comprising professional liability and surety products for privately held and publicly traded companies, financial institutions, professional firms, healthcare, and not-for-profit organizations.
The Coca-Cola Company, a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. Its sparkling beverages include nonalcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavored waters. The company’s still beverages comprise nonalcoholic beverages without carbonation, including noncarbonated waters, flavored and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavoring ingredients, sweeteners, powders for purified water products, beverage ingredients, and fountain syrups.
W. W. Grainger distributes maintenance, repair, and operating supplies, as well as other related products and services for businesses and institutions primarily in the United States and Canada. The company provides material handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies, forestry and agriculture equipment, building and home inspection supplies, vehicle and fleet components, fasteners, instruments, welding and shop equipment, and various other items for facilities maintenance market; and services comprising inventory management and energy efficiency solutions. It sells its products and services to small and medium-sized businesses, large corporations, government entities, and other institutions through local branches, sales representatives, catalogs, and the Internet. The company also offers safety footwear, supplies, and services to large businesses and manufacturers through a multichannel model, including a sales team, branches, shoe mobile trucks, and service centers.
Wal-Mart Stores Inc operates retail stores in various formats worldwide. The company operates in three segments: Walmart U.S., Walmart International, and Sam's Club. It operates retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam’s Clubs, neighborhood markets, and other small formats, as well as walmart.com; and samsclub.com. Further, it operates banks that provide consumer financing programs; and offers financial services and related products, including money orders, prepaid cards, wire transfers, check cashing, and bill payment. As of October 15, 2013, the company operated approximately 11,000 stores under 69 banners in 27 countries and e-commerce Websites in 10 countries.
Good Luck and Good Trading!
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