Buying at all-time high is frightening for a lot of investors as a mistake becomes costly! Considering the current markets high prices; should you wait or should you buy? How to determine which stocks are worth a spot in your portfolio? Let’s talk about valuation, Dividend Discount Model (DDM), yield history, PE ratio trend, value score, payout ratios and more!
Subscribe to our newsletter to receive our best downloads, which include Top Stocks, Stock Lists, and the Workbook.
You’ll Learn
- We can’t do this episode without talking about valuation. To Mike, it is closer to fortune telling than science. Why is it so?
- Some tools become handy to know if a company deserves your money or not. One of them is the Dividend Discount Model (DDM), which assess the value of the future dividend payment. Mike summarizes its pros and cons (more details in video below).
- The yield history is also a good indicator of a stock valuation as it should be stable. However, context must be added.
- The PE Ratio trend also gives investors an idea of where the current price stands compared to the average.
- At Dividend Stocks Rock, we also use the Refinitiv Value Score. What is it made of and how useful is it?
- It seems like a lot of stocks are at their all-time high. Does it mean there is a higher risk of a correction?
- The answer to the question “Should I Buy at All-Time High”, is again, it depends! What does it depend on?
- To identify companies that will thrive, Mike first starts with the dividend triangle, which is positive Revenue, EPS and dividend growth.
- Why is dividend growth so important and how is it related to a high valuation?
- How do the payout ratio and cash payout ratio play a role in buying at all-time high?
- Mike ends with examples of companies at their all-time high that he would still buy in a heartbeat: Costco (COST), Home Depot (HD), and more!
Related Content
Let’s check out the Dividend Discount Model (DDM) usefullness and advantages, flaws and limitations!
We recently held an entire webinar around the topic of all-time high market. You can watch the free replay below.
The Best Dividends to Your Inbox!
Download our Dividend Rock Star List now and do not miss out on the good stuff! Receive our Portfolio Workbook and weekly emails, including our latest podcast episode!
Follow Mike, The Dividend Guy, on:
Have Ideas?
If you have ideas for guests, topics for The Dividend Guy Blog podcast, or simply to say hello, then shoot me an email.
This podcast episode has been provided by Dividend Stocks Rock.
Leave a Reply