Dave Van Knapp Positions For 2014: The Best Dividend Growth Stocks Will Pay Out More This Year - Seeking Alpha

Dave Van Knapp Positions For 2014: The Best Dividend Growth Stocks Will Pay Out More This Year - Seeking Alpha: This is the 13th piece in Seeking Alpha's Positioning for 2014 series. This year we have once again asked experts on a range of different asset classes and investing strategies to offer their vision for the coming year and beyond. As always, the focus is on an overall approach to portfolio construction.

David Van Knapp may be a self-directed individual investor, but his impact extends to many members of the Seeking Alpha community and beyond. Starting in 2006-2007, his affinity for value investing gradually gave way to developing his own unique approach to dividend growth investing. The author of six annual eBooks on the subject, Dave assists individual investors who want to take their financial destinies into their own hands by carefully constructing and managing a portfolio of dividend growth stocks.

For Maximum Total Return, Go For Growth [Apple Inc., Johnson & Johnson, Starbucks Corporation, Green Mountain Coffee Roasters Inc., Coach, Inc., Colgate-Palmolive Company, Cognizant Technology Solutions Corp, Monster Beverage Corp] - Seeking Alpha

For Maximum Total Return, Go For Growth [Apple Inc., Johnson & Johnson, Starbucks Corporation, Green Mountain Coffee Roasters Inc., Coach, Inc., Colgate-Palmolive Company, Cognizant Technology Solutions Corp, Monster Beverage Corp] - Seeking Alpha: Disclosure: I am long AAPL, CTSH, MIDD, GMCR, JNJ, CL. (More...)

Introduction

Not all investors are the same. Therefore, not all investors share the same goals and objectives. Consequently, there are numerous strategies and investing methods available to choose from. Moreover, it also goes without saying that the investment strategy that's right for me may not be right for you. For that reason, it's imperative that each individual looks for the strategy that is right for their own individual goals, objectives, risk tolerances and status. By status, I'm referring to how many years you have left before retirement.

Which Popular Dividend Growth Stocks Are 'Always' Undervalued? [Apple Inc.] - Seeking Alpha

Which Popular Dividend Growth Stocks Are 'Always' Undervalued? [Apple Inc.] - Seeking Alpha: This article is a companion to "Which Popular Dividend Growth Stocks Are Always Overvalued?"

Coming from the opposite direction from that article, here I use F.A.S.T. Graphs to identify which stocks from the 59 most commonly held dividend growth stocks persistently have traded at valuations that are lower than what F.A.S.T. Graphs presents as "earnings justified" valuation.

On the graphs in this article:

The orange line represents "fair value" as determined by F.A.S.T. Graphs, which apply Ben Graham's valuation formulas to each stock's earnings record.

Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [PepsiCo, Inc., The Clorox Co, Paychex, Inc.] - Seeking Alpha

Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [PepsiCo, Inc., The Clorox Co, Paychex, Inc.] - Seeking Alpha: I have noticed a couple of themes emerging in dividend articles over the past year. One theme revolves around valuation, with some suggesting that dividend stocks were in a bubble or significantly overvalued. Another theme has centered on "high quality" companies, and whether investors need sometimes to "pay up" for quality.

Putting the two themes together very recently, there has been discussion about Coca-Cola (KO) being a high quality company that never seems not to be overvalued. In the course of those discussions, it became clear that many feel that KO "always" trades at a premium valuation, so if you want to own it, you might as well accept that you'll need to pay up for it.

Considering High-DGR Dividend Growth Stocks - Seeking Alpha

Considering High-DGR Dividend Growth Stocks - Seeking Alpha: There is a cohort of dividend growth stocks that have always fallen below my minimum threshold of 2.7% yield, but which have high dividend growth rates that make them attractive to some investors. These stocks come up often in comments and portfolio holdings as among the favorite dividend growth stocks.

These high dividend growth rate (DGR) issues seem particularly attractive to younger investors, who often feel that with several decades of compounding ahead of them, high DGRs are more important than high yields. They feel that they have plenty of time to develop excellent dividend streams. Examples of names that typically come up are IBM (IBM), Wal-Mart (WMT), and Exxon-Mobil (XOM).

Beware The Valuations On The Best Consumer Discretionary Dividend Growth Stocks - Seeking Alpha

Beware The Valuations On The Best Consumer Discretionary Dividend Growth Stocks - Seeking Alpha: The Consumer Discretionary sector consists of businesses that sell nonessential, and therefore, discretionary goods and services. Companies in this sector include retailers, media companies, consumer services companies, consumer durables and apparel companies, automobiles and components companies. Since so much of what this sector offers is discretionary items, companies in the sector tend to do best when the economy is strongest. Unfortunately, as we will soon see, so do the prices of their stocks tend to perform best when the market is performing best.

Many Of My Dividend Growth Stocks Have Become Overvalued, What Do I Do Now? - Seeking Alpha

Many Of My Dividend Growth Stocks Have Become Overvalued, What Do I Do Now? - Seeking Alpha: To me, there's almost nothing better than finding a great company that I truly want to own at a fair valuation, or better yet, undervalued. In the long run, it has been my experience that this usually leads to outsized future returns, especially if you buy stocks when they are undervalued at the time. But there is quite often a side effect that can prove very disconcerting. Once an undervalued stock starts moving to the upside, momentum will often carry it above what prudent fair valuation would dictate.

Dividend Growth Stocks Are Success Outliers - Seeking Alpha

Dividend Growth Stocks Are Success Outliers - Seeking Alpha: In his bestseller Outliers: The Story of Success, Malcolm Gladwell explained the idea that success in many fields comes from factors that may be unusual in the population at large, but that are quite common among the outliers themselves. From the book's flap copy:

The lives of outliers - those people whose achievements fall outside normal experience -follow a peculiar and unexpected logic.

The definition of outlier is quoted at the very beginning of the book. An outlier is:

The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? - Seeking Alpha

The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? - Seeking Alpha: Introduction

An author, whom I consider a friend, Robert Allan Schwartz, recently penned an article describing his views on when young investors should transition from growth to dividend growth investing. In this article found here, he created a series of three scenarios and created a set of parameters from which to run them on. Although I felt that his parameters were reasonable, and his scenarios plausible, I also felt that they grossly underestimated the true power of what I would call a pure growth strategy. Frankly, I felt he inadvertently shortchanged the powerful performance capabilities that true growth stocks are capable of achieving.

Can Dividend Growth Investing Be Reconciled With Modern Portfolio Theory? - Seeking Alpha

Can Dividend Growth Investing Be Reconciled With Modern Portfolio Theory? - Seeking Alpha: For the past couple of years, an active discussion or debate has been going on between proponents of dividend growth investing [DGI] and proponents of modern portfolio theory [MPT]. I have been in the middle of some of those debates. I often wonder whether the two strategies for portfolio construction can be reconciled. I will state my preference up front: My primary investing strategy is a DGI strategy. I recognize that many readers will see this as biasing this article. I am sure that any mistakes, stereotypes, or misconceptions can be rectified in the comments section.

Yield On Cost's Role In A Selling Decision - Seeking Alpha

Yield On Cost's Role In A Selling Decision - Seeking Alpha: I recently received an email question, as follows:

On the list of stocks that have been dropped [from the annual 'Top 40 Dividend Growth Stocks,' some of them have been dropped for having a yield that is too low. So let's say I already own [a stock], and two years later the current yield drops below 3%, but my yield on cost is still above 3%. I'm guessing you would drop [that stock] from the top 40 list, but would you sell it as well? Would I be correct in saying it depends on what the yield on cost is at that time?

Are Dividend Growth Stocks In A Bubble? - Seeking Alpha

Are Dividend Growth Stocks In A Bubble? - Seeking Alpha: Introduction and Background

There has been a spate of recent articles and comments stating or implying that dividend growth stocks are in a bubble. David Jackson, the founder and CEO of Seeking Alpha, stated the following in a recent comment.

I haven't found any other asset class [beside dividend growth stocks] where there are similar causes or indicators of potential overvaluation risk, specifically:
1. macro factors (interest rates, demographics, and tax rates),
2. a significant preponderance of positive articles on SA, with relatively few "challenging" articles,
3. high and rising interest from novice investors. (Please note: I'm *not* saying that all dividend investors are novices; there are many deeply experienced and sophisticated dividend investors.)

Blue-Chip Dividend Growth Stocks Today's Strong Option For Retirement Portfolios Part 2 - Seeking Alpha

Blue-Chip Dividend Growth Stocks Today's Strong Option For Retirement Portfolios Part 2 - Seeking Alpha: In part one of this two-part series (Found Here) I laid the groundwork for why I believe that blue-chip dividend paying US equities represent not only a viable, but also a safer investment choice than many give them credit for. I also pointed out why I believe the risk profile on bonds is currently upside down, arguing that for one of the few times in history they may actually be more dangerous an investment than equities.

Our Top 25 Dividend Growth Stocks Are Dirt Cheap - Seeking Alpha

Our Top 25 Dividend Growth Stocks Are Dirt Cheap - Seeking Alpha: Anyone who had recently invested in real estate would most likely agree that the phrase “dirt cheap” carries a new and enhanced meaning today. In the same vein, we would argue that our top 25 dividend growth stocks based on the potential for five-year estimated annual total returns are dirt cheap. Consequently, we believe that most of the bad news is already priced in, and therefore, the opportunity to buy low is the best it’s been since 1997.

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Dividend Growth Stocks: 15 Dividend Stocks That Have Paid Dividends For Over 110 Years

Dividend Growth Stocks: 15 Dividend Stocks That Have Paid Dividends For Over 110 Years: 15 Dividend Stocks That Have Paid Dividends For Over 110 Years

The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend. Often it can be boiled down to a simple question: "How committed is the company to paying its dividend?"

Sure most CEOs give lip-service to their commitment to shareholders, but what happens when times are hard. When the economy turns down and the future looks bleak, will the company hoard cash and stop its dividend or put action behind its words?

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5 Exceptional Dividend Growth Stocks With Lower Volatility And Higher Total Return - Seeking Alpha

5 Exceptional Dividend Growth Stocks With Lower Volatility And Higher Total Return - Seeking Alpha: For many people these are troubled times where fears about our economy and the stock market are at a heightened state. Stock price volatility is higher than we've ever seen it, which only adds to investor nervousness. Therefore, we searched for a safe place for conservative investors to invest. Our due diligence identified five dividend growth stocks that possess stringent quality characteristics, while at the same time have produced strong above-average historical total returns. But more importantly, each candidate had to have future consensus earnings estimated growth rates greater than the S&P 500.

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Dividend Growth Stocks: 8 High-Yielding Dividend Aristocrats Not Afraid to Raise Their Dividends

8 High-Yielding Dividend Aristocrats Not Afraid to Raise Their Dividends

The S&P 500 Dividend Aristocrats is the most recognized list of dividend stocks. The Dividend Aristocrats index is designed to measure the performance of S&P 500 constituents that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years.

Dividend Aristocrats exhibit the following characteristics:


- They are a member of the S&P 500
- The index is equally weighted with constituents re-weighted quarterly
- List is reviewed and updated annually in December


Make no mistake, Dividend Aristocrats are the blue-blood of dividend growth stocks. When building your core portfolio, this list is where you want to start your evaluation. If you want dividend growth, these stocks have been there, and done that - for decades.


This week week, I screened my dividend growth stocks database for Dividend Aristocrats with a yield greater than 3% and have increased their dividends for at least 35 consecutive years. The results are presented below:


Procter & Gamble (PG)
Yield: 3.1% | Years of Dividend Growth: 54
The Procter & Gamble Company is a leading consumer products company that markets household and personal care products in more than 180 countries.


Pepsico, Inc. (PEP)
Yield: 3.1% | Years of Dividend Growth: 39
PepsiCo, Inc. is a major international producer of branded beverage and snack food products.


Johnson & Johnson (JNJ)
Yield: 3.2% | Years of Dividend Growth: 49
Johnson & Johnson is a leader in the pharmaceutical, medical device and consumer products industries.


Abbott Laboratories (ABT)
Yield: 3.6% | Years of Dividend Growth: 39
Abbott Laboratories is a diversified life science company and is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics.


Kimberly-Clark Co. (KMB)
Yield: 4.1% | Years of Dividend Growth: 39
Kimberly Clark Corp. is a global consumer products company that produces tissue, personal care and health care. Its brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark.


Consolidated Edison, Inc. (ED)
Yield: 4.5% | Years of Dividend Growth: 38
Consolidated Edison, Inc. is an electric and gas utility holding company that serves parts of New York, New Jersey and Pennsylvania.


Leggett & Platt, Inc. (LEG)
Yield: 4.6% | Years of Dividend Growth: 39
Leggett & Platt Inc makes a broad line of bedding and furniture components and other home, office and commercial furnishings, as well as diversified products for non-furnishings markets.


Cincinnati Financial Corp. (CINF)
Yield: 5.6% | Years of Dividend Growth: 51
Cincinnati Financial Corp. markets primarily property and casualty coverage. It also conducts life insurance and asset management operations.


As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.


My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.

Is Dover Corp. a Cyclical, Growth or Dividend Growth Stock? - Seeking Alpha

Is Dover Corp. a Cyclical, Growth or Dividend Growth Stock? - Seeking Alpha

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6 Attractively Valued Dividend Growth Stocks Reporting Earnings - Seeking Alpha

6 Attractively Valued Dividend Growth Stocks Reporting Earnings - Seeking Alpha

Dividend Growth Stocks: 6 High-Yield Financial Services Stocks With Rising Dividends

The Financial Services Sector includes insurance companies, banks, brokerages, mutual funds and other similar companies. Before the 2008-09 financial services meltdown, these stocks were the cornerstone on many income portfolios. The companies were flush with cash, the stocks provided relatively high yields, good dividend growth rates and carried very little perceived risk.

Unfortunately, things are not always as they seem. Under the surface banks were making questionable loans, while investment firms were creating and peddling exotic financial instruments. In effect, their CEO's were building houses of cards in a hurricane - it was destined to come tumbling down, and it did.

As a result, investors learned some very valuable, but expensive lessons. This should serve as a warning when investing in the Financial Services Sector - not a stop sign. Many of these companies are now in very lucrative positions.

With interest rates as low as they are, banks are enjoying decent spreads, not to mention all the new fees they are charging their customers. As more consumers take advantage of electronic banking, we are becoming more tied to our accounts. The pain threshold of changing banks is high, and they know it.

Have you ever filed an insurance claim and were satisfied with the outcome?

Insurance companies are the ultimate business. They charge premiums to protect you. Then take the premiums, invest them and earn a return, which is then reinvested. The money is theirs to keep if you don't file a claim. If you do file a claim, the insurance company will find ways to minimize what they actually pay you - then raise your rates for filing a claim.

You can complain about these companies, or invest in the industry and profit from them. I've chosen the latter.

This week week, I screened my dividend growth stocks database for Financial Services companies with a yield at or above 4% and have increased their dividends for at least 14 consecutive years. The results are presented below:

Mercury General Corp. (MCY)
Yield: 6.2% | Years of Dividend Growth: 24
Mercury General Corp. is an insurance holding company, primarily in California, writes a full line of automobile coverage for all classifications of risk.

Old Republic International (ORI)
Yield: 6.0% | Years of Dividend Growth: 30
Old Republic Intl writes property and liability, mortgage guaranty, title and life, and disability insurance.

Cincinnati Financial Corp. (CINF)
Yield: 5.8% | Years of Dividend Growth: 51
Cincinnati Financial Corp. markets primarily property and casualty coverage. It also conducts life insurance and asset management operations.

People's United Financial Inc. (PBCT)
Yield: 4.6% | Years of Dividend Growth: 14
People's United Financial Inc. provides a full range of banking and financial service products to individuals, corporations, and municipal customers in the U.S. Northeast.

Harleysville Group Inc. (HGIC)
Yield: 4.5% | Years of Dividend Growth: 25
Harleysville Group Inc. underwrites a broad array of personal and commercial coverages. These insurance coverages are marketed primarily in the Eastern and Midwestern United States.

Community Trust Bank Corp. (CTBI)
Yield: 4.3% | Years of Dividend Growth: 31
Community Trust Bank Corp. owns and operates Community Trust Bank, Inc. of Pikeville, KY, which provides commercial banking services in Kentucky and West Virginia; and a trust company.

As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.

My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers

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