Buying high quality stocks at cheap prices is one of the major missions of a successful trader. Many investors failed to implement this strategy. I have also done a lot of loss-trades within the recent years and lost much money. If I accumulate all this money which now far away at investors who sold the stocks earlier, I would be a rich man. I learned from a lot. People should buy some higher valuated companies with a safer business model. I believe that if you realize a return of 5-9 percent plus a final dividend of 1-3 percent, you have done a real good investment.
However, I proceed with my 2013 stock picks. Today, Dividend Aristocrats are in my main focus. Those stocks raised dividends over a period of more than 25 consecutive years and being selected by the credit rating agency Standard & Poor's.
These are my criteria:
- Forward P/E under 15
- Past 5Y Sales growth over 5 percent
- Earnings per share growth for the next five years over 5 percent
- Operating Margin over 5 percent
Fourteen Dividend Aristocrats fulfilled these criteria of which three yielding above three percent. Nine are currently recommended to buy. Dividend Aristocrats are not as cheap as other potential dividend growth stocks because the market has identified the quality of the stocks. Would you pay a higher price for more quality or do you prefer cheaper stocks with more return potential. Let me know your thoughts below in our comment box.
Here is the full table with some fundamentals:
Take a closer look at the full list. The average P/E ratio amounts to 17.86 and forward P/E ratio is 12.88. The dividend yield has a value of 2.52 percent. Price to book ratio is 3.02 and price to sales ratio 1.49. The operating margin amounts to 13.87 percent and the beta ratio is 0.75. The average stock from the screening results has a debt to equity ratio of 0.51.
Related stock ticker symbols:
T, ABT, BMS, SWK, AFL, XOM, MMM, ITW, MDT, VFC, WMT, HRL, FDO, BCR