One Dividend Aristocrat Set To Soar And One You Should Ignore

One Dividend Aristocrat Set To Soar And One You Should Ignore

Posted On December 3, 2020 3:01 am

Dividend aristocrats are beloved by income investors and for good reasons.

They are the most dependable dividend blue-chips in the world and combine several alpha factors to generate consistently market-beating returns over time. But in this market bubble, many aristocrats are incredibly overvalued, creating elevated valuation and volatility risk.

One of these aristocrats is about 50% overvalued. It may be one of the highest quality companies on earth, but buying at these prices is a potentially costly mistake you could regret for many years to come.

In contrast, this other company is a 12/12 quality Ultra SWAN hyper-growth dividend champion that’s 22% undervalued.

Analysts expect 15% to 16% CAGR long-term growth to drive about 19% CAGR total returns over the next five years, about 6X the likely returns of the S&P 500.

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About author

Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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