Recent Investment for May 2nd
I wanted to let you know that I added to another existing position in my retirement account. The company is a dividend achiever, which has managed to increase dividends for 13 consecutive years. I liked the 13% dividend increase last month, which brought quarterly distributions to $0.89/share. Over the past 5 years, the company has managed to grow dividends at an annualized rate exceeding 10%/year.
The stock does not look cheap at 25 times forward earnings today. However, the stock typically has sold within that range over the past decade. Given the growth in earnings per share, the relatively stability of its cashflows and its strong competitive position, I believe that a slight premium is probably warranted. A company with a 3.23% yield, which can grow distributions and cashflows at 10%/year looks like a good value for a patient long-term investor.
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