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Undervalued Dividend Growth Stock Of The Week

January 8, 2017 by Jason Fieber 10 Comments

I uncover a high-quality dividend growth stock that appears to be undervalued each week for Daily Trade Alert, which is a site that focuses on dividend growth investing, stocks, and unique investment opportunities. I’ve been writing for them for years now, and they’re just great over there. Each week, I publish an excerpt of my work, when it’s fresh off the press. That way, you readers are given the opportunity to check it out. The content is totally free. I hope you enjoy!

I spend hours per day reading about how life, work, and happiness all intertwine.

But some of what I read is pretty disheartening.

A vast majority of our population is pretty unhappy at work.

These are people that are doing jobs that detract from their personal happiness.

Well, I know how that feels.

I spent about eight years in the auto industry, and it was my general disdain for the job that led me to aggressively save and invest so that I could get out.

And boy, did I ever get out.

I was able to essentially retire in my early 30s.

But the amazing thing is that it’s possible for almost anyone to do this!

Keep reading…

Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.

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Filed Under: Dividend Growth Investing

About Jason Fieber

Jason Fieber became financially free at 33 years old by using dividend growth investing to his advantage. Jason has authored two best-selling books: The Dividend Mantra Way and 5 Steps To Retire In 5 Years (also available in paperback).

 

Jason recommends Personal Capital for portfolio management, Mint for budgeting, Schwab for the brokerage account, and Morningstar, Daily Trade Alert, and Motley Fool for stock ideas. This blog is hosted by Bluehost. If you'd like to start your own blog, Jason offers free coaching when you use our Bluehost affiliate link.

 

Jason's writing and/or story has been featured across international media like USA Today, Business Insider, and CNBC.

« How I Retired In Six Years On A $50,000 Salary, Part 3
Passive Income And Core Personal Expenses For December 2016 »

Reader Interactions

Comments

  1. D-Man says

    January 8, 2017 at 1:13 pm

    Thanks for sharing. I agree CVS looks attractive from a valuation point of view.

    However, I am from Europe and am not in the position to validate the factors influencing CVS’ fundamentals (e.g. Trump’s plans with health care, margin pressure etc.).

    Reply
    • Jason Fieber says

      January 8, 2017 at 1:15 pm

      D-Man,

      Well, nobody can predict the future. And there are risks with every single business you could possibly invest in. That’s why you should seek out a margin of safety, which is what these articles are all about.

      Best of luck with your investing! 🙂

      Cheers.

      Reply
  2. Dividend Ten says

    January 8, 2017 at 4:04 pm

    Great article. I just opened up a new position myself on Friday. To the point above, consumer staples and healthcare have not done as well in 2016 and along with some of the negatives surrounding loss of Tricare to Walgreen Boots and Obamacare repeal uncertainties impact on insured base are some of the factors that have caused it to drop 25% since May, despite being an overperformer in the previous recent years. I do think many of these concerns are overblown. The PBMs will continue to gain market share at expense of each other so there should be some ebb and flow on the competitive side, and additionally loss of Tricare was a somewhat immaterial portion of their overall business. Any loss of insured base to Obamacare should be mitigated somewhat by extremely friendly corporate taxation rate. There are still of course other risks but this company generates a lot of free cash flow with a targeted 35% payout ration, all of which should support an ever rising dividend in the years to come. As you say the price provides a nice margin of safety here, and would be a good time to open a position. This is a fairly recession proof business and it would take a lot to make the share price really crater, I believe.

    Reply
    • Jason Fieber says

      January 8, 2017 at 4:41 pm

      DT,

      Agreed.

      I think one has to remember that the ACA is relatively new. CVS has been around for a long time, and it was very, very profitable long before the word “Obamacare” became part of our lexicon. And it’s continued to make a lot of money post-ACA. I suspect that dynamic will continue on for many more years, regardless of what the government decides to do vis-à-vis the ACA. That’s due to the reasoning I discussed in the article (and that which you brought up in your comment). 🙂

      Best wishes!

      Reply
  3. The Conservative Income Investor says

    January 8, 2017 at 5:18 pm

    Jason, CVS has caught my attention as well. It definitely has some short-term issues to work through, but I think it has reached a size where it has the institutional power to absorb a lot of abuse.

    Compared to something like the BP oil disaster, I don’t think the current issues at CVS even register as a 2 out of 10.

    Reply
    • Jason Fieber says

      January 8, 2017 at 6:04 pm

      Tim,

      I’m with you 100%. They’ve had a few issues crop up recently, but that’s usually the best time to buy a slice of a great business. When everything is hunky-dory, the valuation of the business is usually reflective of that.

      It’ll be interesting to see how some of their recent acquisitions pan out. I’m hoping we’ll see the accretive nature prove out. Either way, the long-term picture appears to be bright. Time will tell. 🙂

      Thanks for stopping in!

      Best regards.

      Reply
  4. D4F says

    January 8, 2017 at 5:53 pm

    Ended up picking up CVS when it came down below $70 and still holding on, adding bits here and there until it becomes a full position on my portfolio. Just bumps on the road, CVS is here to stay.

    Reply
    • Jason Fieber says

      January 8, 2017 at 5:57 pm

      D4F,

      Almost every single time a great company has its stock price drop substantially over a short period of time, it’s an excellent opportunity to pick up more shares. Like I always say, short-term volatility is usually a great long-term opportunity. 🙂

      Thanks for dropping by!

      Cheers.

      Reply
  5. Dividend Reaper says

    January 9, 2017 at 12:41 am

    Jason,

    CVS has such an incredible business model. I’ve been watching it for a very long time but it’s not quite ready to enter my own portfolio just yet. Good to see you supporting the stock though. It just gives further support for it :). Keep up the good work!

    -Dividend Reaper

    Reply
    • Jason Fieber says

      January 9, 2017 at 1:05 am

      DR,

      Very happy shareholder here. And I’m that much happier whenever I need to stop in and buy anything. Love supporting my businesses, when applicable. 🙂

      Happy investing!!

      Cheers.

      Reply

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Hi. I'm Jason Fieber. I achieved financial independence and retired in my early 30s by using dividend growth investing to my advantage. I cover stock analyses, market news, dividend updates, and the dividend growth investing strategy.

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