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 went to the movie theater just the other day.
And as I sat there during the previews, thinking to myself for a bit, it occurred to me that a lot of people come to the movies to escape reality for a couple of hours.
In many ways, I get it. But in some ways, it’s sad.
Shouldn’t our lives be a bit more exciting… like a movie?
I’m not saying we all need to be action heroes.
But there is certainly a big difference between a typical movie and the typical, everyday pattern that most people are familiar with.
Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.
Interesting write up on CMP. I’m not invested in it, and at first glance, the consistent 14-year history of rising dividends is attractive along with the above 4% in yield. However, I’m not a fan of the below than average dividend safety score. I always appreciate these write ups because it either gives me the opportunity to take a second look at a company/stock I am interested in or it opens my eyes to other investment opportunities that I never really considered, but may begin my own research if interested. Thanks as always.
DP,
Happy to provide a compelling long-term investment idea.
There are “safer” companies/dividends to be sure (Compass is no Johnson & Johnson), but you’re generally going to pay up (in terms of valuation and/or yield). Compass has shown an ability to pay a growing dividend for a fairly long period of time now, and that looks set to continue. Weather pattern normalization over the short term and medium term, along with further diversification of the business, means it’s that much more appealing right now, in my view. Lastly, I don’t view it as a stock that would/should be a cornerstone/major position in a widely-diversified portfolio.
Cheers!
Jason, thank you for the blogpost. I remember when you first talked about Compass Minerals. I didn’t invest in it back then because I only just started investing and was building my portfolio with some core holdings. But now might be a good time to initiate a small position. One thing I reallly like about Compass Minerals is how easy their business model is to understand.
– SD
SD,
Happy to share these ideas! 🙂
Yeah, you’re getting a utility-like yield. But you’re also getting what might be a better valuation and better dividend growth potential (than an average utility). I don’t see Compass as a major position in my own portfolio, but I think it’s worthy of a small slot. They’ve been able to manage the cycles fairly well thus far, as evidenced by the fundamentals and dividend growth track record. Any change there, however, would cause me to reevaluate the idea. So far, so good.
Best regards!
Nice article. Have not heard about CMP before, its always nice to be exposed to new stocks. However, in the last few years we (new England) have had warmer winters (fingers crossed for this year!). Secondly, I also tend to compute dividend payout ratio based on cash flow. It is very high for a dividend stock. Just my 2 cents on CMP. Not saying it is a bad buy, I might not have the appetite for it.
DG,
It’s a somewhat similar story here in the US. There has been some warmer-than-average winter weather of late in the company’s key region, which has affected snowfall and results. But the thing about averages is that you’re going to look for some kind of return to average, which would thus require some kind of heavy bounce back. I came across some data not too long ago that showed Great Lakes snowfall hasn’t changed much over the last few decades, even though it can vary considerably from year to year.
That all said, this stock is like any other – it doesn’t make sense for every investor.
Thanks for dropping by!
Cheers.