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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (33404)	2/2/2009 1:25:33 PM
From: E_K_S	Read Replies (2) of 78740

Companies that pay dividends may not be a specific metric that Warren Buffet uses to screen investment opportunities but may signal candidate stocks that meet his other key investment criteria. Friday, October 31, 2008 Warren Buffett – The Ultimate Dividend Investor dividendgrowthinvestor.com From the article:"...Most companies that have managed to increase their dividends for long periods of time are ones that have wide moats as well as excellent competitive advantages in the marketplace. Having these qualities leads to rising earnings which tend to support a steady pace of increase in dividends...." According to the article (10/2008), 86% of the companies in BRK-A paid some type of dividend. 12 companies are dividend aristocrats, one is a dividend champion and three are dividend achievers. ================================================================ I do know from my current portfolio asset allocation, I am currently moving some bond money (yielding less than 1%) into dividend "aristocrat" type equities that yield over 3% so I can lock in a better than bond yield and get a Buffet type value bargain. I do agree with you that buying equities based on dividend yields alone (especially when treasury rates are much higher) is not a very useful metric for screening undervalued stocks. However with current T-bill rates so low (<1%) it is one factor I am now using with other standard value measurements to screen possible new buys. EKS

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