The Best Dividend Stocks To Buy As Earnings Season Heats Up

Apr. 22, 2019 6:12 AM ETABBV, ABCB, AM, AMT, AOS, APD, AVGO, AY, BAC, BEP, BIP, BLK, BMY, BPYU, BTI, C, CL, CVS, ENB, EOG, EPD, EQIX, EQM, ET, FDX, FRT, GD, GPC, HD, HOMB, HRL, ICE, ITW, KIM, KO, LAZ, LEG, LMAT, LNC, LOW, LRCX, LUV, MMP, MO, MPLX, MSM, NBLX, NEP, OMP, PEGI, QTS, SNA, SU, SYF, TERP, THO, TRP, TXN, UNH, UPS, VOD, WBA, ZTS, ENB:CA, TRP:CA, SU:CA, BEP.UN:CA, BIP.UN:CA23 Comments

Summary

  • Earnings season is upon us, with 30% of S&P 500 companies reporting this week.
  • With almost -4% EPS growth expected this quarter, quality undervalued companies are the most likely to beat pessimistic growth estimates and thus pop nicely.
  • This weekly watchlist series is meant as a source of great dividend ideas based on four time-tested valuation methods.
  • These are: discounted cash flow, low PE ratios, blue-chips trading near 52-week (or multi-year) lows, and dividend yield theory.
  • Just remember it's meant only as a source of ideas, so cherry pick the companies that are right for your needs and always practice good risk management and appropriate asset allocation.

(Source: imgflip)

Due to reader requests, I've decided to break up my weekly "Best Dividend Stocks To Buy This Week" series into two parts.

One will be the weekly watchlist article (with the best ideas for new money at any given time). The other will be the portfolio update.

To also make those more digestible, I'm breaking out the intro for the weekly series into a revised introduction and reference article on the 3 rules for using margin safely and profitably (which will no longer be included in those future articles).

To minimize reader confusion, I will be providing portfolio updates on a rotating three-week schedule. This means an update every three weeks on:

Why Valuation ALWAYS Matters

Even the best companies can make terrible investments if you overpay. A Yale study looking at market returns from 1881 to 2016 found that starting P/E ratio had a significant effect on total returns out to 30 years. What's more, in the past few decades, valuation has explained about 45% of the market's forward 5-year returns.

Data as of March 2019

In other words, buy-and-hold investors can't just blindly buy great companies at any price but need to remember Buffett's famous quote, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

The corollary to that quote is what I call "the Buffett rule," which is to never pay more than fair value for even the highest-quality companies. Doing so will lower your total returns, and since something great is always on sale, there is no reason to

This article was written by

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Adam Galas is a co-founder of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 5,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.


The WMR brands include: (1) The Intelligent REIT Investor (newsletter), (2) The Intelligent Dividend Investor (newsletter), (3) iREIT on Alpha (Seeking Alpha), and (4) The Dividend Kings (Seeking Alpha).


I'm a proud Army veteran and have seven years of experience as an analyst/investment writer for Dividend Kings, iREIT, The Intelligent Dividend Investor, The Motley Fool, Simply Safe Dividends, Seeking Alpha, and the Adam Mesh Trading Group. I'm proud to be one of the founders of The Dividend Kings, joining forces with Brad Thomas, Chuck Carnevale, and other leading income writers to offer the best premium service on Seeking Alpha's Market Place.


My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives.


With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and safe and dependable income streams in all economic and market conditions.


Disclosure: I am/we are long WBA, SKT, MINT, BPY, ABBV, ET, BIP, NEP, EPR, MPLX, IRM, AM, ENB, SPG, BLK, AOS, AAPL, CVS, UNH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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