Dividend Champions a Rare Opportunity

Mispricing happens when emotions erode rational thinking, thereby manifesting either greed or fear. It is important that investors maintain a reasoned and rational approach and avoid the emotional response at all costs. The following list is comprised of Dividend Champion companies that are trading at historically low P/E ratios based almost exclusively on negative investor sentiment. Our list is comprised exclusively from David Fish’s current list of 102 Dividend Champions, companies that have increased their dividends every year for at least 25 years. Amazingly, of the 102 names on this list, 43 of them were available at below normal, and therefore we feel, attractive valuations.

To be clear, there were another 45 or so names out of the 102 Dividend Champions that could have been included based on reasonable or fair valuation. Names like McCormick & Co. (MKC), McDonald’s Corp. (MCD), Hormel Foods Corp. (HRL), Sherwin Williams Co. (SHW), and RPM International (RPM) represent just a few of the high profile names that were excluded due to our strictest definition of intrinsic value. In other words, these names were not necessarily overvalued but just fully valued. Of the entire Dividend Champions list, we only rejected five that we considered either excessively overvalued or poor investments based on weak fundamentals.

Source: Guru Focus

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