Dividend Stocks Are Not Expensive

Surveying the dividend stock landscape, it’s easy for investors to conclude that they’ve missed out. After all, many pipelines, utilities and telecoms have been on a tear recently, making the stocks looks expensive. But Ryan Crowther, co-lead manager of the Bissett Canadian Dividend Fund and Bissett Dividend Income Fund, says a price chart alone doesn’t tell the full story. To properly value a stock, investors need to look at the price in relation to the cash flow the company will generate well into the future.

On that basis, “we’re finding great companies that are still trading at decent valuations,” Mr. Crowther says. “And in some cases we’re actually finding companies trading at really attractive valuations, even in the dividend space.” When choosing stocks for his funds, he and his colleagues employ a bottom-up approach to identify companies that can deliver an attractive total return from both dividends and capital gains.

Source: Globe and Mail

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