We provide a significant amount of fundamental and technical information and data on high quality, dividend-paying blue chip stocks, asserts Kelley Wright, editor of Investment Quality Trends — and a participant in MoneyShow's Accredited Virtual Expo on March 2-4. Register for free here.
Whether you are looking to build a portfolio from scratch, are partially invested and looking to add new positions, or are fully invested and merely in need of some affirmation and hand holding, The Timely Ten represents our top ten recommendations from the Undervalued category as of each issue.
Short of utilizing the personal investment management services of our sister company, IQ Trends Private Client Asset Management, this is as close to real time advice you can get. Traditionally we have suggested the following criterions for subscribers to consider in their investment considerations:
• An S&P Dividends and Earnings Quality Ranking of A- or better
• A designation for outstanding long-term annual dividend growth of 10% over the last twelve years
• A price/earnings ratio (P/E) of 15 or less
• A payout ratio (percentage of earnings paid out as a dividend) of 50% or less (75% for Utilities)
• A debt level of 50% or less (75% for Utilities)
Historically, subscribers that have relied solely on these criterions in their stock selection process have been handsomely rewarded over time. The only critique is that some stocks remain in the Undervalued area for a significant amount of time before they begin to demonstrate price appreciation.
For the investor with a long-term investment time-horizon this is not an issue, as they are getting paid to wait from consistent dividend payments and dividend increases.
For the investor with a shorter-term investment time-horizon, the discipline and patience required to let the full value of a company be expressed in its stock price may prove too difficult, and result in them abandoning this time-proven strategy, which is unfortunate.
There are multifaceted explanations/reasons for why a stock may remain in the Undervalued area for an extended period.
In our experience, although a company may offer excellent current value in terms of its dividend yield, its internal economic measures may not be sufficiently attractive for current buying interest, thus the high dividend yield and the extended period in the Undervalued category.
Here are the current stocks that make up The Timely Ten:
State Street (STT) — yielding 2.76%
Philip Morris International (PM) — yielding 5.58%
Consolidated Water Co. (CWCO) — yielding 2.58%
VSE Corp. (VSEC) — yielding 0.97%
US Bancorp (USB) — yielding 3.45%
CVS Health Corp. (CVS) — yielding 2.84%
Washington Federal (WAFD) — yielding 3.08%
M&T Bank (MTB) — yielding 2.96%
JM Smucker (SJM) — yielding 3.18%
Tyson Foods (TSN) — yielding 2.77%