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Dividends4Life (31.76)

October 2011

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24 Stocks Providing An Inflation Hedge With Increasing Dividends

October 31, 2011 – Comments (1) | RELATED TICKERS: MAC , AFL , CVX

With all the other investment strategies out there, why should investors consider dividend or income investing? There are a multitude of reasons to follow a dividend growth strategy. These include: investment stability, security of cash, continuous feedback, potential higher returns, low maintenance, et. al. But for me the most important reason is the inflation hedge that a growing income will provide in my retirement years.  [more]

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Meredith Corp. (MDP) Dividend Stock Analysis

October 28, 2011 – Comments (0) | RELATED TICKERS: MDP , MSO , MHFI

Linked here is a detailed quantitative analysis of Meredith Corp. (MDP). Below are some highlights from the above linked analysis:  [more]

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Genuine Parts Company (GPC) Dividend Stock Analysis

October 27, 2011 – Comments (0) | RELATED TICKERS: GPC , AAP , AZO

Linked here is a detailed quantitative analysis of Genuine Parts Company (GPC). Below are some highlights from the above linked analysis:

Company Description: Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

GPC is trading at a premium to all four valuations above. The stock is trading at a 11.6% premium to its calculated fair value of $45.54. GPC did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

GPC earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%.

The company earned a Star for having an acceptable score in at least two of the four Key Metrics measured. It has paid a cash dividend to shareholders every year since 1948 and has increased its dividend payments for 55 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

The NPV MMA Diff. of the $418 is below the $500 target I look for in a stock that has increased dividends as long as GPC has. If GPC grows its dividend at 4.8% per year, it will take 4 years to equal a MMA yielding an estimated 20-year average rate of 4.1%. GPC earned a check for the Key Metric 'Years to >MMA' since its 4 years is less than the 5 year target.

Memberships and Peers: GPC is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company's peer group includes: Advance Auto Parts Inc. (AAP) with a 0.4% yield, AutoZone Inc. (AZO) with a 0.0% yield and W.W. Grainger, Inc. (GWW) with a 1.8% yield.

Conclusion: GPC did not earn any Stars in the Fair Value section, earned three Stars in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of three Stars. This quantitatively ranks GPC as a 3 Star-Hold stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $48.70 before GPC's NPV MMA Differential decreased to the $500 minimum that I look for in a stock with 55 years of consecutive dividend increases. At that price the stock would yield 3.7%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $500 NPV MMA Differential, the calculated rate is 5.2%. This dividend growth rate is slightly higher than the 4.8% used in this analysis, thus providing no margin of safety. GPC has a risk rating of 1.25 which classifies it as a Low risk stock.

GPC’s long string of dividend increases are supported by its strong underlying fundamentals of sales, earnings and free cash flow growth. The company exhibits excellent financial leadership as evidenced perseverance through the recent downturn. From an operating standpoint, GPC has an extensive distribution network and it has built a loyal customer following over the years.

Since the company is has proven itself in the most recent downturn, it now trades at a premium to my $45.54. However, given its strong dividend fundamentals, I will look for opportunities to add to my position.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I was long in GPC (4.5% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here.

Related Articles:
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- T. Rowe Price Group Inc. (TROW) Dividend Stock Analysis
- Pepsico, Inc. (PEP) Dividend Stock Analysis
- General Dynamics (GD) Dividend Stock Analysis
- More Stock Analysis  [more]

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6 Communications Services Stocks With Increasing Dividends

October 26, 2011 – Comments (0) | RELATED TICKERS: VZ , T , CTL

Morningstar defines the Communications Services sector as "Companies that provide communication services using fixed-line networks or those that provide wireless access and services. This sector also includes companies that provide internet services such as access, navigation and internet related software and services."  [more]

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7 Dividend Stocks To Build Your Future Security

October 25, 2011 – Comments (0) | RELATED TICKERS: ABT , CVX , KO

What will your financial future look like? Have you ever considered how you will fund your retirement and pay your bills after the payroll checks stop coming? If you haven't thought about this, you are likely in the majority.  [more]

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16 Dividend Stocks Raising Dividends and Expectations

October 24, 2011 – Comments (0) | RELATED TICKERS: JBL , B , WSO

Have you ever pondered the concept of forever or infinity? It is truly mind boggling! What is even more astonishing is that when I buy a stock, my target holding period is forever. For most people, myself included, that is hard to grasp and to carry out.  [more]

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16 Dividend Stocks Raising Dividends and Expectations

October 24, 2011 – Comments (0) | RELATED TICKERS: JBL , B , WSO

Have you ever pondered the concept of forever or infinity? It is truly mind boggling! What is even more astonishing is that when I buy a stock, my target holding period is forever. For most people, myself included, that is hard to grasp and to carry out.  [more]

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2011-Q3 Performance Review

October 22, 2011 – Comments (0) | RELATED TICKERS: BRK-B

After each quarter-end, I review my asset allocation and year-to-date total returns by category. The attached PDF contains my actual asset allocation as of 2011-Q3. Below is a high-level summary of the information contained in the PDF:

Asset Allocation   [more]

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Wal-Mart Stores, Inc. (WMT) Dividend Stock Analysis

October 21, 2011 – Comments (0) | RELATED TICKERS: WMT , COST , TGT

Linked here is a detailed quantitative analysis of Wal-Mart Stores, Inc. (WMT). Below are some highlights from the above linked analysis:  [more]

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Nucor Corporation (NUE) Dividend Stock Analysis

October 20, 2011 – Comments (0) | RELATED TICKERS: NUE , CMC , X

Linked here is a detailed quantitative analysis of Nucor Corporation (NUE). Below are some highlights from the above linked analysis:  [more]

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15 Dividend Stocks That Have Paid Dividends For Over 110 Years

October 19, 2011 – Comments (0) | RELATED TICKERS: CL , KO , XOM

The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend. Often it can be boiled down to a simple question: "How committed is the company to paying its dividend?"   [more]

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How To Know When To Sell A Dividend Stock

October 18, 2011 – Comments (0) | RELATED TICKERS: ADM , CAT , BP

When I add a stock to my dividend portfolio, it is my intention to hold the stock forever. When stock prices start dropping, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying.   [more]

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7 Stocks Increasing The Compounding Power Of Dividends

October 17, 2011 – Comments (0) | RELATED TICKERS: ALB , PAYX , WST

Too often we take a short-term approach, to our long-term detriment. There is a reason we don't see infomercials selling dividend growth investment strategies. For those looking to get rich now, a disciplined approach to investing that focuses on the long-term simply isn't appealing. if I knew in my 20's or 30's what I know now about dividend growth stocks, I would likely be retired now. The compounding power of growing dividends is tremendous.  [more]

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September 2011 Pocket Change Portfolio Performance Update

October 16, 2011 – Comments (0) | RELATED TICKERS: INTC , COP , WMT

The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "pocket change" earned from my various online endeavors. Each month I report on the portfolio's progress and update its holdings.  [more]

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ConocoPhillips Co. (COP) Dividend Stock Analysis

October 14, 2011 – Comments (0) | RELATED TICKERS: COP , CVX , XOM

Linked here is a detailed quantitative analysis of ConocoPhillips Co. (COP). Below are some highlights from the above linked analysis:  [more]

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Johnson & Johnson (JNJ) Dividend Stock Analysis

October 13, 2011 – Comments (0) | RELATED TICKERS: JNJ , ABT , BMY

Linked here is a detailed quantitative analysis of Johnson & Johnson (JNJ). Below are some highlights from the above linked analysis:  [more]

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6 Higher Yielding Basic Materials Stocks With Growing Dividends

October 12, 2011 – Comments (0) | RELATED TICKERS: PPG , RPM , NUE

The Basic Materials Sector includes companies involved with the discovery, development and processing of raw materials. This includes companies engaged in the mining and refining of metals, chemical production and forestry products.  [more]

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7 Dividend Stocks Delivering The Secret To Successful Investing

October 11, 2011 – Comments (0) | RELATED TICKERS: ABT , EMR , JNJ

Many people spend their investing lives jumping from one investing strategy to another. It seems they are always looking for that hot combination that will produce instant wealth. Think about it, most things that are instant, such as potatoes and coffee, aren't really that good. Quick and easy, yes, but not really good.  [more]

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9 Dividend Stocks Building Superior Long-Term Returns

October 10, 2011 – Comments (0) | RELATED TICKERS: RPM , GLW , CLC

Ned Davis Research examined the relative performances of stocks between 1972 and 2006 and established a link between rising dividends and superior long-term returns. The study found S&P 500 stocks that consistently increased their dividends returned 10.4% total return (dividends + share price appreciation), while those that did not increase their dividends returned only 8.2%. The 2.2% advantage of the dividend raisers would equate to an additional $1,802 per $100 invested in 1972.  [more]

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Dividend Income Progress Update - September 2011

October 09, 2011 – Comments (0) | RELATED TICKERS: COP , INTC , HGIC.DL

Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income increased in September, extending the streak to 15 consecutive months of increases after June 2010's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 44 of the last 46 months.  [more]

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Medtronic Inc. (MDT) Dividend Stock Analysis

October 06, 2011 – Comments (0) | RELATED TICKERS: MDT , BDX , BAX

Linked here is a detailed quantitative analysis of Medtronic Inc. (MDT). Below are some highlights from the above linked analysis:  [more]

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7 High-Yield Dividend Achievers With 25 Years of Increases

October 05, 2011 – Comments (0) | RELATED TICKERS: T , CTBI , VVC

While the S&P 500 Dividend Aristocrats may be the most recognized list of dividend stocks, it is certainty not the largest. Since the Dividend Aristocrats list is limited to only stocks included in the S&P 500 Index, many smaller stocks are excluded. To expand the population of potential investments, many investors look at the dividend growth stocks included in Broad Dividend Achievers™ list.  [more]

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There's Gold In Them Thar Dividend Stocks

October 04, 2011 – Comments (0) | RELATED TICKERS: NEM , HL , ABX

With the U.S. debt quickly approaching 100% of the GDP and the declining financial condition of European countries, we are seeing some very jittery financial markets. Whether you live in the U.S. or are a citizen of the world, we should all be concerned with the current financial condition of the world, and many people are. This is evidenced by the significant run up in gold.  [more]

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6 Dividend Stocks Using Cash To Pay Higher Dividends

October 03, 2011 – Comments (0) | RELATED TICKERS: ENVE , CAG , COV

The Boston Consulting Group doesn’t discount the role that stock buybacks can play in boosting near-term returns for some companies. But the firm’s research indicates that stock buybacks do not change investors’ estimates for long-term earnings-per-share growth, or induce them to accord a company a higher valuation multiple. By contrast, it says, dividend growth has a far more positive long-term impact.  [more]

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