Good Morning,
I wanted to let you know that I added to two existing positions. These are companies that I have been adding to, off and on.
I basically followed this exercise, where I looked at the earnings trends, valuation, dividend growth and most recent dividend increases, and determined whether a company is worth adding to or not. There are several companies that have failed to raise dividends or have really slowed down on it; when coupled with failure in EPS to increase, that's an automatic no for me. Other companies sell for very high valuation multiples. I have a hard time paying over 30 times forward earnings, even for a company that has growth potential.
In an environment where Treasury Bonds are yielding 4% - 5%, it is tough for me to pay more than 25 times earnings. 20 times earnings translates into an earnings yield of 5%. 25 times earnings translates into an earnings yield of 4%.
Next, I looked at my portfolio holdings, sorted by weight. I looked at each company, starting at the bottom, and continued moving my way up, until I reached two companies.
I ended up adding to the following two companies below:
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