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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (33398)2/1/2009 1:25:25 PM
From: E_K_S  Read Replies (1) of 78744
 
Hi Jurgis - How important are the dividends paid when you evaluate your value stock picks? From your list below, GSK & HOG have the highest yield. I know that sometimes you give up some growth for the stability of a dividend but I have found that my overall return is much better with a steady dividend payer especially if you can load up when these companies are selling at their lows and are out of favor.

finance.yahoo.com

I clearly expect many of these high dividend payers to reduce their dividend in the short term which may provide a good entry point into the stock. One company I am looking at after a dividend cut is Caterpillar Inc. (CAT).

finance.yahoo.com

16 year quarterly dividend history for CAT
finance.yahoo.com

I have been going back through the historical prices (past ten years) looking at the dates of both the reduction and increases in quarterly dividends.

It's my view that when things get very bad, we should see company dividend cuts which may signal the bottom and provide a good buying opportunity for the value/growth investor.

EI DuPont de Nemours & Co. (DD) is one I plan to load up on if a dividend cut is announced.

16 year quarterly dividend history for DD
finance.yahoo.com

There are many other companies that will be survivors and an excellent buy on a dividend cut announcement.

EKS
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