Buy These Dividend Stocks on the Pullback

Over the last few years, investors have piled into high-quality dividend stocks in search of yield. With bonds paying abysmal yields, dividend stocks became an attractive alternative. This popularity pushed prices up and yields down, and many dividend stocks became overvalued. Although many believe that high-quality dividend stocks are safe, the price which you pay matters greatly. Now, with treasury yields rising, many dividend stocks have been hit hard, falling considerably in price over a short period of time. A disaster? On the contrary, this is an opportunity. But with prices coming down, these stocks may become attractive again:

Many dividend stocks which have been overvalued for some time are falling back to earth, and an opportunity may arise to buy them at a discount. It's a good idea to keep a watchlist of high-quality dividend stocks which you'd like to buy and the price which you'd be willing to pay. Johnson & Johnson needs to fall to $81 per share, P&G to $68 per share, and Coca-Cola to $37 per share for the stocks to be fairly valued based on my assumptions. At the right price, these stocks would make good additions to a dividend portfolio.

Source: Guru Focus

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