Introduction
Dividend Champions/Aristocrats are the go-to dividend-paying stocks for prudent investors desirous of a safe, predictable and growing stream of income on the common stock portion of their retirement portfolios. As most investors are aware, in order to be classified as a Dividend Champion/Aristocrat, a company must meet the stern test of consecutively increasing their dividend for 25 years or longer. Of all the dividend-paying stocks in the universe, only a select few make these prestigious lists.
However, the popularity of Dividend Champions/Aristocrats often presents a conundrum to value-oriented dividend growth investors. These best-of-breed dividend-paying stalwarts are rare to find at attractive or prudent valuations. Nevertheless, since I am a fervent believer that you make your money on the buy side, high quality and an impeccable dividend record are not enough for me.
Before I am willing to invest in any company, Dividend Champion/Aristocrat or not, the company must be available at a prudent and attractive valuation. Of the more than 50 Dividend Aristocrats, and more than 100 Dividend Champions, I only found 10 that I considered currently attractive based on valuation.
Price Is What You Pay - Value Is What You Get
In December 2010, I started a series of articles where I presented the principles of valuation. Since I believe that principles of valuation are timeless, I offer the following excerpts from that series in order to revisit some of the more important principles, benefits and aspects of investing at fair value.
In part 1 of that three-part series found here, I presented the important principle that distinguishes the difference between price and value:
"Price Is What You Pay. Value Is What You Get."
The venerable investor Warren Buffett has a real knack of putting complex concepts and ideas into simple and easily understood terms. In my opinion, his quote, "
