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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (5895)	9/22/2010 1:49:06 AM
From: chowder	Read Replies (2) \| Respond to of 34328

I was referring to PG being high quality, not CAG. ... CAG doesn't show up on any of my lists either.

To: Steve Felix who wrote (5895)	7/13/2011 5:40:02 PM
From: Grommit	1 Recommendation Read Replies (2) \| Respond to of 34328

CAG update. last sept, CAG lowered earnings guidance a little, but raised the dividend. I thought the 4.3% dividend looked safe and their PE was reasonable (under 12), so i posted "Dividends increased from 80 cents to 92 cents. Payout ratio at (div / eps) 0.92 / 1.85 = safe dividend. $0.92/$21.17 = 4.3% yield, about the same as many utilities. Good diversification for me. And although you folks don't care, their PE is acceptably low. :o)" So I bought CAG at < $21.50 at that time. The stock price is now $26.27. The dividend still OK at 3.5% ($0.92 / $26.27), but with the stock price price increase since then, the PE is now 14.5. prob a fair PE, but not as undervalued anymore. So I just sold and got a 24% stock price increase over 9 months, plus the dividend. I am posting here to make the same point that I have made a few times. (I get pooh poohed whenever I mention it). You thumb your nose at valuation saying that increasing dividends is all that is important, and that capital gains are for others. I think it is fine to look for quality companies that pay an increasing dividend, but you should also filter for valuation and avoid overvalued stocks. Why overpay? I do not want to criticize postings on this individual pick, because it could have gone either way. But think about it. :o) dabum: CAG doesn't meet my criteria for purchase. High Quality as defined by Miller is a company with superior financial strength, low debt, strong cash flow and credit worthiness. It has a safety rating by Value Line of 1 or 2. Or, a Morningstar rating of BBB+ or better. ... Then I look for a long history of raising dividends. felix: I don't see CAG being on any list you are looking at unless it is an avoid list. finance.yahoo.com