Dividend Stocks Are (Or Will Be) The Bubble In This Market Cycle

|
About: McDonald's Corporation (MCD), Includes: BKK, CAT, ED, GWW, NOBL, TOL
by: SD Davis
This article is exclusive for subscribers.
SD Davis
Value, growth at reasonable price, Deep Value, registered investment advisor
Summary

We choose a few randomly selected “Dividend Aristocrats” stocks to provide empirical valuation support for the thesis.

Interest rates are still at historic lows, and a rise in rates and/or inflation will not be good for dividend-paying stocks.

Many stable dividend-paying stocks do not offer a sufficient risk premium due to a false sense of security.

The owners earnings or free cash flow yield cannot be ignored just because a company has a history of stable dividends.

Many investors have forgotten what a normal interest rate environment feels and acts like. Remember that 5% money market rate in 2006? (I know... it's a near forgotten memory.) The collective investing mindset seems to