Seeking Alpha

Benjamin Clark's  Instablog

Benjamin Clark
  • on Quick Picks & Lists
Send Message
Benjamin is the founder of ModernGraham.com, a website devoted to the study and modernization of the teachings of Benjamin Graham. Benjamin graduated cum laude with a J.D. and Certificate in Taxation from DePaul University College of Law, and a B.S. in Finance (Honors) from DePaul University... More
My blog:
ModernGraham
My book:
ModernGraham Stocks & Screens
  • Dow Industrial Average's Top 3 Dividend Companies 0 comments
    Oct 20, 2009 12:24 PM | about stocks: PFE, JNJ, PG

    CashPassGo

    Dividends are one of the key components of any solid investment strategy.  Benjamin Graham taught that companies that pay dividends are often worthy of further research.  Looking at the Dow Jones Industrial Average components, these 3 companies seem to be the best bet for a second look by dividend investors.

    1. PFE – Pfizer Inc - 5.40% Pfizer passes our tests for the defensive and enterprising investors with a strong balance sheet.  It'd be nice if the earnings were growing a little bit more, but they have been very stable at least.  Our valuation model puts a price of $25 on the company, which puts it at approximately a 28% discount to the value.
    2. JNJ – Johnson & Johnson - 3.14% Johnson and Johnson passes the tests for the enterprising investor but fails for the defensive investor due to the price to book ratio being a little on the high side.  The earnings growth has been strong over the last 10 years and we value it at $97.
    3. PG – Proctor & Gamble - 2.92% Proctor & Gamble has had very strong earnings growth, causing it to pass the test for the defensive investor despite some balance sheet issues (poor current ratio and a lot of debt compared to the current assets).  We value the company at about $107.

    As a reminder, all intelligent investors  should do their own research prior to making any purchase and should not rely on anything read on the internet.  That goes for speculators and unintelligent investors as well!

    Photo by DavidDMuir

    Full Disclosure:  Long PFE.

    Stocks: PFE, JNJ, PG
Back To Benjamin Clark's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.