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!
You should have a high degree of confidence that a company’s products and/or services will still be in demand (preferably more in demand) decades from now.
That’s essentially a primary responsibility of any long-term investor, in my view.
And questioning my confidence is something I do every time I look at a company for potential long-term investment.
My conviction in this responsibility has never been more tested than it has been lately, as I’ve practically been barraged with news stories about cryptocurrency.
When I look at a cryptocurrencies, I ask myself what degree of confidence I have that they’ll be in demand decades from now.
Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.
Nice review Jason. I own VTR. I noticed they chose not to increase their dividend recently, electing to keep it constant at the usual time of year when they raise it a small percentage. Does that signal from management raise any concern relative to your analysis? Tom
Tom,
I’m not sure what you’re referring to. Ventas just recently increased their dividend, as scheduled. It was under 2%, however, as I noted in the article. That’s why the DDM analysis is where it’s at.
For reference, here is the IR page for the REIT’s dividends:
https://www.ventasreit.com/investor-relations/dividend-information
Cheers!
Tom,
You probably were referring to Welltower (HCN). They did not increase their dividend last week very disappointing indeed. But necessary and conservative in my opinion still look like a bargain to add here.
Jason,
Once again great job brother!
Nandy
Nandy,
Thanks for adding that. Perhaps that’s what Tom was referring to.
Best wishes!
Yes lots of REITs and Utilities looks atractive today. What do you think of OHI? Same sector but better yield.
P2035,
I think OHI is also appealing, though its business model is obviously a bit different in terms of where it specializes.
That said, it’s not a candidate for the series due to the fact that neither Morningstar nor CFRA cover it.
Thanks for dropping by!
Best regards.
Jason,
Always refreshing to read your weekly in-depth analyses of companies. Regarding Ventas being involved in health care sector, are you at all concerned about the long-term margin performance of the health care sector with the announcement of Amazon, Berkshire, and JP Morgan recently to partner up trying to tackle the rising cost of healthcare? My first reaction is that this would mostly affect insurance companies, but that eventually the effects of Amazon in the space would eventually trickle through the system and hurt big pharma/medical suppliers/REITs etc.
Do you have a target average organic growth rate that you shoot for on your portfolio? What is a reasonable growth rate to expect from high quality companies over the long-term? I’ve been playing with some spreadsheets and was curious if any other DGI folks out there enjoy getting lost in the details of potentialities. Plugging in 6% average dividend growth vs. 10% average growth over a couple decades makes a huge difference. Seeing as you are living off your portfolio income, I’m guessing you try to lean more towards slightly higher current yield vs higher growth rate. Interested to hear your thoughts.
Mike,
I’m not concerned about the partnership. It’s a shame that the US has such a dysfunctional healthcare system, that it almost requires large companies to team up like this and take advantage of their scale in order to get a handle on things. However, the benefit/purpose is largely for their very own employees. And it’s really a moot point, as that has practically nothing to do with the Ventas.
As for organic dividend growth, I’m happy with something around 7% to 8% annually. As I noted recently, inflation is now the least of my concerns, but the increase in purchasing power is nonetheless exciting just in terms of the overall increase in opportunities and flexibility. I’m not, however, one of those people that likes to spend hours (or even minutes) per day playing around with spreadsheets and numbers. I’m out here actually living the life, living my dreams out. I’m living off of dividend income in my 30s. The money is just a means to an end (living a happy, free, and purposeful life). There’s no need to constantly think about money any longer. The people that tend to endlessly debate and discuss things are often, in my experience, the same people that never actually pull the trigger until their best days are already behind them. I have far more fun exploring Thailand than exploring spreadsheets. To each their own, though. 🙂
Best regards.