Recent Investment - February 9th
I wanted to let you know that I added to another existing position this morning. As I had mentioned in my other emails this month, I am going through my list of portfolio holdings, and adding to the smallest positions that seem fundamentally sound and for which the valuation is adequate.
The company I am investing in today has a ten year annualized dividend growth rate of 7.80%, yields 2.90% and has a 51 year track record of annual dividend increases. This company is a dividend king, with a stable business model which is relatively recession resistant. It does sell for 25 times forward earnings, and I would love to buy more closer to 20 times forward. But, the stability of the business model warrants this valuation. Relative to long-term treasuries, an earnings yield of 4% (inverse of P/E 25) is probably going to result in better returns over the next 20 - 30 years for the patient investor.
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