The healthy, normal, and expected pullback has arrived with stocks falling for four consecutive weeks.

The Dividend Aristocrats, S&P 500 companies with 25+ year dividend growth streaks are thus far acting defensively as they generally have in most market downturns.

This is not surprising given the aristocrats have a track record of mostly keeping up with the S&P in good times and outperforming during bad times.

(Source: Ploutos)

In fact, the aristocrat’s average 20-year volatility is the second-lowest among the seven alpha factors.

(Source: Ploutos)

These are the seven proven strategies that outperform the broader market over the long-term, defined as 10+ years when 90% to 91% of total returns are a function of fundamentals, not luck, sentiment, or momentum.

In fact, in terms of volatility-adjusted total returns, the Dividend Aristocrats are the second-best long-term alpha strategy investors can use.

Alpha Factor 20-year Annualized Return 20-year Annual Volatility

20-year Sharpe Ratio (Total Return/Volatility)

Low Volatility 10.24% 10.89% 0.94
Dividend Growth (Aristocrats, Specifically) 10.72% 13.30% 0.81
Quality 9.60% 13.72% 0.70
Momentum 8.86% 15.27% 0.58
Equal Weighting 8.77% 17.25% 0.51
Size 8.47% 19.19% 0.44
S&P 500 6.34% 15.02% 0.42
Value 8.75% 21.93% 0.40

(Source: Ploutos)

In 3 Of The Last 4 Corrections, The Aristocrats Outperformed The S&P 500

(Source: JPMorgan Asset Management)

Why do I bring up the topic of short-term market volatility at all?

Because volatility risk, while not as important as fundamental or valuation risk, can still cost you dearly if you have poor risk management in your portfolio.

Volatility… will offer the true investor more chance to make intelligent investment moves. He can be hurt by such volatility only if he is forced, by either financial or psychological pressures, to sell at untoward times.– Warren Buffett (emphasis added)

In this week’s video article, my monthly Best Dividend Aristocrats to buy series, I wanted to highlight the reasons that some analyst firms expect increased volatility in the next few months.

The Biggest Short-Term Risks To The Stock Market

More importantly, I wanted to highlight the best 3 Dividend Aristocrats, Kings, and Champions long-term conservative income investors, such as retirees, can safely buy today are reasonable to attractive valuations.

  • Dividend Champions: any US-listed company with a 25+ year dividend growth streak
  • Dividend King: any US-listed company with a 50+ year dividend growth streak

(Source: Imgflip)

I’m not the only one who considered dividend streaks important. Ben Graham, the father of securities analysis, valuation, and Buffett’s mentor (and also one of the greatest investors in history in his own right) considered 20+ years of uninterrupted dividends to be an important sign of a fundamental quality.

Dividend Champions, Aristocrats & Kings Fundamental Quality & Safety Review

This video briefly summarizes the fundamental quality of the dividend champions, aristocrats, and kings, and why so many income investors rightly consider them the bluest of the blue-chips.

However, the champions, aristocrats, and kings are slightly overvalued as a group.

  • Dividend Champions: 9% overvalued
  • Dividend Aristocrats: 13% overvalued
  • Dividend Kings: 13% overvalued

Over time total returns are a function of just three things, all of them to do with valuations or fundamentals.

While the yield of the champions, aristocrats, and kings are relatively attractive, and their long-term analyst growth forecasts are 0.5% to 1.% CAGR stronger than the S&P 500’s, there is no reason that prudent long-term investors need overpay for even the highest-quality and safest dividend growth blue-chips in the world.

Finding The Best Dividend Champions, Aristocrats, & Kings In This Overvalued Market

For those who don’t have an interest in the specifics of how I find the safest and best-valued aristocrats to recommend in this volatile market here is the summary.

The Dividend Kings Master List has 470 companies on it, including:

  • All Dividend Champions (companies with 25+ year dividend growth streaks)
  • All Dividend Aristocrats (S&P companies with 25+ year dividend growth streaks)
  • All Dividend Kings (companies with 50+ year dividend growth streaks)
  • All 11/11 quality Super SWANs (5/5 safety + 3/3 wide-moat businesses + 3/3 excellent management quality/dividend cultures, basically as close to a perfect company as exists on Wall Street)

I start by screening the Dividend Kings Master List of 470 companies for fair value or better, as my fellow Dividend King Chuck Carnevale always does when searching for sound potential long-term investment ideas.

  • 67 companies are potentially reasonable buys (color-coded blue in the DK research terminal)
  • 106 are potentially good buys or better (color-coded green in the DK research terminal)
  • total companies remaining: 173/470 (37% of the Master List)

Next, I screen for 8+/11 above-average quality companies.

(Source: imgflip)

This is based on an 11 point quality scale the factors in dividend safety, business model, management quality, and dividend corporate culture.

Dividend Kings Rating Scale

Quality Score Meaning Max Invested Capital Risk Recommendation Margin Of Safety Potentially Good Buy Strong Buy Very Strong Buy Ultra-Value Buy
3 Terrible, Very High Long-Term Bankruptcy Risk 0% NA (avoid) NA (avoid) NA (avoid) NA (avoid)
4 Very Poor 0% NA (avoid) NA (avoid) NA (avoid) NA (avoid)
5 Poor 0% NA (avoid) NA (avoid) NA (avoid) NA (avoid)
6 Below-Average, Fallen Angels (very speculative) 1% 35% 45% 55% 65%
7 Average 2.5% 25% to 30% 35% to 40% 45% to 50% 55% to 60%
8 Above-Average 5% (unless speculative then 2.5%) 20% to 25% 30% to 35% 40% to 45% 50% to 55%
9 Blue-Chip 7% (unless speculative then 2.5%) 15% to 20% 25% to 30% 35% to 40% 45% to 50%
10 SWAN (a higher caliber of Blue-Chip) 7% (unless speculative then 2.5%) 10% to 15% 20% to 25% 30% to 35% 40% to 45%
11 Super SWAN (as close to perfect companies as exist) 7% (unless speculative then 2.5%) 5% to 10% 15% to 20% 25% to 30% 35% to 40%

  • 8/11 above average quality: 40 companies
  • 9/11 blue-chip quality: 62 companies
  • 10/11 SWAN quality: 33 companies
  • 11/11 Super SWAN quality: 14 companies
  • total companies remaining: 149/470 (32% of the Master List)

Next select for 4+/5 above-average or very safe dividends.

Safety Score Out of 5 Approximate Dividend Cut Risk (Average Recession) Approximate Dividend Cut Risk This Recession
1 (unsafe) over 4% 16+%
2 (below average) over 2% 8% to 15%
3 (average) 2% 4% to 8%
4 (above-average) 1% 2% to 4%
5 (very safe) 0.5% 1% to 2%

Dividend Kings Safety scores are based on 18 safety metrics that look at cash flow, balance sheet soundness, and accounting fraud risk.

Dividend Kings Safety Model

1

Payout Ratio vs safe level for the industry (historical payout ratio vs dividend cut analysis by industry/sector)

2

Debt/EBITDA vs safe level for industry (credit rating agency standards)

3

Interest coverage ratio vs safe level for industry (credit rating agency standards)

4

Debt/Capital vs safe level for industry (credit rating agency standards)

5

Current Ratio (Total Current Assets/Total Current Liabilities)

6

Quick Ratio (Liquid Assets/current liabilities (to be paid within 12 months)

7 S&P credit rating & outlook
8 Fitch credit rating & outlook
9 Moody’s credit rating & outlook
10 30-year bankruptcy risk
11

Implied credit rating (if not rated, based on average borrowing costs, debt metrics & advanced accounting metrics)

12

Average Interest Cost (cost of capital and verifies the credit rating)

13

Dividend Growth Streak (vs Ben Graham 20 years of uninterrupted dividends standard of quality)

14

Piotroski F-score (advanced accounting metric measuring short-term bankruptcy risk)

15

Altman Z-score (advanced accounting metric measuring long-term bankruptcy risk)

16

Beneish M-score (advanced accounting metric measuring accounting fraud risk)

17

Dividend Cut Risk In This Recession (based on blue-chip economist consensus)

18

Dividend Cut Risk in Normal Recession (based on historical S&P dividend cuts during non-crisis downturns)

READ ALSO  Oil Plunges To $35 As Lockdowns Return

I calibrate 3/5 average safety to the historical rate of S&P 500 dividend cuts in recessions since 1945.

(Source: Moon Capital Management, NBER, Multipl.com)

Next, I screen for credit ratings which are highly correlated to 30-year bond default rates.

Credit Rating 30-Year Bankruptcy Probability
AAA 0.07%
AA+ 0.29%
AA 0.51%
AA- 0.55%
A+ 0.60%
A 0.66%
A- 2.5%
BBB+ 5%
BBB 7.5%
BBB- 11%
BB+ 14%
BB 17%
BB- 21%
B+ 25%
B 37%
B- 45%
CCC+ 52%
CCC 59%
CCC- 65%
CC 70%
C 80%
D 100%

(Sources: Dividend Kings Investment Decision Tool, S&P, University of St. Petersburg)

If a company defaults on its bonds (and earns a D rating from S&P) it almost always goes bankrupt and its common equity investors get wiped out.

  • Junk bond rated companies: 5
  • total companies remaining: 144/470 (31% of the Master List)

And of course, we can’t forget about dividend growth streaks, which Ben Graham considered an important fundamental quality metric and which defines champions, aristocrats, and kings.

The Safest Dividend Champions, Aristocrats & Kings You Can Buy Today Sorted By Longest Dividend Growth Streak

(Source: Dividend Kings Company Screening Tool)

From this list of safe, high-quality dividend champions, aristocrats, and kings, all of who are reasonably to attractive valued, we can select the best companies for any particular need, goal, or risk profile.

Johnson & Johnson (JNJ): The Safest And Lowest Volatility Dividend Aristocrat You Can Buy Today

Further Research Articles

Johnson & Johnson Consensus Growth Estimates

Metric 2020 Growth Consensus 2021 Growth Consensus

2022 Growth Consensus

Dividend 6% (official) 6% 6%
EPS -9% 15% 10%
Owner Earnings 7% 13% -3%
Operating Cash Flow -1% 6% 13%
Free Cash Flow -7% 12% 15%
EBITDA -4% 13% 10%
EBIT 14% 15% 10%

(Source: F.A.S.T. Graphs, FactSet Research)

Johnson & Johnson is a wonderful core holding and the safest dividend stock in the world.

  • 11/11 Super SWAN quality
  • Dividend King (58-year dividend growth streak)
  • Diversified, recession-resistant cash flow
  • AAA stable credit rating = 0.07% 30-year bankruptcy risk

JNJ has a 5.8% CAGR long-term growth consensus and a margin of error adjusted analyst consensus growth range of 4% to 7% CAGR.

Johnson & Johnson Historical Market-Determined Fair Value

Metric Historical Fair Value (11-year time frame) 2020 2021 2022
5-Year Average Yield 2.71% $149 $155 $164
13-Year Median Yield 2.78% $145 $151 $160
Earnings 16.3 $128 $147 $162
Owner Earnings (Buffett smoothed out FCF) 18.2 $148 $167 $161
Operating Cash Flow 15.6 $135 $143 $161
Free Cash Flow 19.0 $131 $148 $170
EBITDA 12.2 $124 $141 $155
EBIT (pre-tax profit) 15.0 $138 $159 $174
Average $137 $151 $163
Current Price $145.66

Discount To Fair Value

-6% 4% 11%
Upside To Fair Value -6% 4% 12%

Annualized Total Return Potential

-22% 3% 5%

(Source: F.A.S.T. Graphs, FactSet Research) JNJ’s 2021 average fair value is $150 until the dividend hike of 6% which analysts expect in May 2021

Johnson & Johnson Fundamentals

  • quality score: 11/11 Super SWAN quality, Dividend King
  • dividend safety score: 5/5 very safe, 1% to 2% risk of a cut in this recession, 0.5% in a normal recession
  • Max portfolio risk cap recommendation: 7% or less
  • yield: 2.8% vs 2.8% 13-year median
  • current price: $
  • Potential good buy price: $ or less
  • 2021 average historical fair value: $150 ($143 to $159 range, Morningstar 2020 estimate $141, uncertainty “low”, I concur based on the fair value range)
  • approximate discount to fair value: 3%
  • DK rating: a potentially reasonable buy
  • historical fair value: 15.5 to 17 PE
  • current blended PE: 18.0 (16.2 2021 PE)
  • Earnings yield (Chuck’s “essence of valuation”): 5.6% vs 6.7% recommended
  • Growth priced into stock: about 4.8% CAGR according to Graham/Dodd fair value formula
  • Growth priced in according to historical PEG ratio: 6.4% CAGR
  • long-term analyst growth consensus: 5.8% CAGR
  • the margin of error adjusted analyst long-term consensus growth forecast: 4% to 7% CAGR
  • 5-year total return potential: 6% to 9% CAGR (analyst consensus 7.8% CAGR)
  • PEG ratio: 2.79 vs 2.52 historical vs 2.65 S&P 500 vs 2.35 historical S&P 500
  • Investment Decision Score: 77% = C+ above-market average

Johnson & Johnson Investment Decision Score

I never recommend a company, much less put my own money at risk without first knowing exactly how prudent a potential investment it is relative to the S&P 500, most people’s default alternative.

The investment decision score is based on valuation and the three core principles of all successful long-term investors.

The Dividend Kings Automated Investment Decision Score allows subscribers to instantly pull up the Investment Decision score for any Master List company, to see how reasonable and prudent a potential investment it is relative to the S&P 500.

Goal Scores Scale Interpretation
Valuation 3 Reasonable Buy JNJ’s 2.80% discount to fair value earns it a 3-of-4 score for valuation timeliness
Preservation of Capital 7 Excellent JNJ’s S&P credit rating, AAA, implies a 0.07% chance of bankruptcy risk and earns it a 7-of-7 score for Preservation of Capital
Return of Capital 7 Good JNJ’s 16.13% vs. the S&P’s 10.92% 5-year potential for return via dividends earns it a 7-of-10 Return of Capital score
Return on Capital 7 Good JNJ’s 5.62% vs. the S&P’s 3.95% 5-year probability-weighted returns earns it a 7-of-10 Return on Capital score))
Total Score 24 Max score of 31
Investment Score 77%
Investment Letter Grade C+ Above-Market Average
S&P’s Score 73/100 = C(Market Average)

(Source: Dividend Kings Automated Investment Decision Score Tool)

Johnson & Johnson is a potentially reasonable core buy today for conservative income investors that offer above-market average income and long-term risk-adjusted expected returns.

READ ALSO  Shopping centre giant Unibail hits back against activists ahead of key vote

I and the Dividend King’s Phoenix portfolio have three limits set for JNJ.

  • at the 5% discount potential good buy price (2.8% yield)
  • at the 2.9% yield price
  • at the 3.0% yield price

Johnson & Johnson Quality & Safety Analysis

Johnson & Johnson Total Return Potential & Investment Decision Score

Johnson & Johnson Historical Returns, Volatility & Future Risk Analysis

Altria (MO): The Highest Yielding & 2nd Most Undervalued Dividend King You Can Buy Today

Further Research Articles

Altria Consensus Growth Estimates

Metric 2020 consensus growth 2021 consensus growth

2022 consensus growth

Dividend 2% (official) 4% 5%
EPS 2% 6% 5%
Operating Cash Flow 6% -3% 3%
EBITDA 8% 4% 3%
EBIT (pre-tax profit) 8% 4% 3%

(Source: F.A.S.T. Graphs, FactSet Research)

Throughout its three-year bear market, which began from MO being 63% overvalued, the company has grown at over 10% CAGR and analysts expect Altria to continue growing at a steady rate basically in-line with the low end of pre-pandemic long-term management growth guidance.

The difference between a value trap and a potentially great deep value opportunity is whether fundamentals such as dividends, earnings, and cash flow are growing or shrinking.

In the case of MO the objective historical data, as well as the consensus, estimates from 15 analysts who collectively know this business better than anyone but management itself, says MO is not a value trap.

Altria Historical Market-Determined Fair Value

Metric Historical Fair Value (all-years) 2020 2021 2022
13-Year Median Yield 4.95% $69 $72 $75
25-year average yield 5.26% $65 $67 $71
Earnings 14.4 $62 $66 $70
Operating Cash Flow 14.8 $67 $65 $67
EBITDA 8.7 $54 $56 $58
EBIT (Pre-Tax Profit) 9.1 $56 $58 $59
Average $62 $64 $67
Current Price $38.27

Discount To Fair Value

39% 40% 43%
Upside To Fair Value 63% 67% 74%

Annualized Total Return Potential

606% 51% 28%

(Source: F.A.S.T. Graphs, FactSet Research) – MO’s 2021 fair value is currently $63 because the 4% dividend hike analysts expect isn’t coming until August 2021.

Altria is one of the most undervalued blue-chips in America and the 2nd most undervalued Dividend King (FRT is #1n and 41% undervalued).

However, as we just saw from the growth consensus table, MO’s extremely low valuation is 100% not justified by its fundamentals. It is objectively not a value trap but a classic Buffett style “fat pitch” with short and long-term total return potential to make grown men weep with joy.

(Source: imgflip)

Altria Fundamentals

  • quality score: 9/11 blue-chip dividend king

  • dividend safety score: 4/5 above-average (2% to 4% dividend cut risk in this recession, 1% in a normal recession)

  • Max portfolio risk cap recommendation: 7% or less

  • yield: 9.0% vs 5.0% 13-year median

  • current price: $38.27

  • Potential good buy price: $54 or less

  • 2021 average historical fair value: $63 ($56 to $69 range, Morningstar estimate $54 based on 14 2020 PE uncertainty “medium”, I concur based on the fair value range)

  • approximate discount to fair value: 40%

  • DK rating: potentially very strong buy

  • historical fair value: 14 to 15 PE

  • current blended PE: 8.9 (8.4 2021 consensus)

  • Earnings yield (Chuck’s “essence of valuation”): 11.2% vs 6.7% recommended

  • Growth priced into stock: about 0.2% CAGR according to Graham/Dodd fair value formula

  • Growth priced in according to historical PEG ratio: 5.0% CAGR

  • long-term analyst growth consensus: 6.1% CAGR

  • the margin of error adjusted analyst long-term consensus growth forecast: 4% to 7% CAGR

  • 5-year total return potential: 19% to 23% CAGR (analyst consensus 21.0% CAGR)

  • PEG ratio: 1.37 vs 1.78 historical vs 2.65 S&P 500 vs 2.35 historical S&P 500

  • Investment Decision Score: 94% = A excellent

Altria Investment Decision Score

Goal Scores Scale Interpretation
Valuation 4 Very Strong Buy mo’s 39.55% discount to fair value earns it a 4-of-4 score for valuation timeliness
Preservation of Capital 5 Average mo’s S&P credit rating, BBB, implies a 7.5% chance of bankruptcy risk and earns it a 5-of-7 score for Preservation of Capital
Return of Capital 10 Exceptional mo’s 52.69% vs. the S&P’s 10.92% 5-year potential for return via dividends earns it a 10-of-10 Return of Capital score
Return on Capital 10 Exceptional mo’s 13.88% vs. the S&P’s 3.95% 5-year probability-weighted returns earns it a 10-of-10 Return on Capital score))
Total Score 29 Max score of 31
Investment Score 94%
Investment Letter Grade A Excellent
S&P’s Score 73/100 = C(Market Average)

(Source: Dividend Kings Automated Investment Decision Score Tool)

Altria continues to represent one of the most reasonable and prudent long-term high-yield investments conservative income investors, such as retirees, can make today.

It offers about 5X the S&P 500’s expected dividend returns and about 3.5X the market’s expected five-year returns while delivering a safe and steadily growing 9.0% yield that’s in the top 1% of yield it’s offered over the past 25 years.

Altria Quality & Safety Analysis

Altria Total Return Potential And Investment Decision Score

Altria Historical Returns, Volatility & Future Risk Analysis

Carlisle Companies (CSL): The Fastest Growing Dividend Champion You Can Safely Buy Today

Further Research Articles

Business Summary

Carlisle Companies is a holding company. Through its subsidiaries, it manufactures and sells rubber and plastic engineered products.

The company is organized into four segments based on product type. The company’s product portfolio includes commercial roofing systems, wires, cables, connectors, industrial liquid finishing material, brakes, clutches, and other products used in construction, transportation, aerospace, defense, medical, and various other industrial sectors.

These products are mostly supplied as components to original equipment manufacturers in the industry. A vast majority of the company’s revenue comes from the construction material segment, and more than half of the total revenue is earned in the United States.” – Morningstar

Carlisle Consensus Growth Estimates

Metric 2020 consensus growth 2021 consensus growth

2022 consensus growth

Dividend 5% (official) 4% NA
EPS -32% 33% 18%
Owner Earnings (Buffett smoothed out FCF) -35% 44% 13%
Operating Cash Flow -23% 19% 11%
Free Cash Flow -30% 11% 16%
EBITDA -15% 19% 6%
EBIT (pre-tax profit) -24% 27% 14%

(Source: F.A.S.T. Graphs, FactSet Research)

CSL is a cyclical industrial that has a great long-term infrastructure spending growth catalyst. Analysts expect a rapid recovery from a tough 2020 and a return to its recent historical 15+% CAGR growth rates.

(Source: F.A.S.T. Graphs, FactSet Research)

The historical margin of error adjusted long-term analyst growth consensus range is 10% to 22%, which is reasonable given the company’s historical growth rates and strong long-term growth catalysts.

Carlisle Historical Market-Determined Fair Value(Source: F.A.S.T. Graphs, FactSet Research)

READ ALSO  E-cigarette maker Juul cuts valuation to $10 billion - memo

Metric Historical Fair Value (13-years) 2020 2021 2022
5-Year Average Yield 1.35% $156 $161 NA
13-Year Median Yield 1.27% $165 $172 NA
15-year average yield 1.59% $132 $137 NA
Earnings 18.9 $105 $139 $164
Owner Earnings (Buffett smoothed out FCF) 17.4 $127 $182 $206
Operating Cash Flow 14.0 $132 $157 $174
Free Cash Flow 20.3 $151 $167 $194
EBITDA 9.4 $121 $143 $152
EBIT (Pre-Tax Profit) 12.3 $106 $135 $154
Average $133 $155 $174
Current Price $118.81

Discount To Fair Value

11% 23% 32%
Upside To Fair Value 12% 30% 46%

Annualized Total Return Potential

57% 24% 19%

CSL 2021 fair value is $153 because a 4% dividend hike isn’t expected until August 2021

CSL is currently modestly undervalued for 2020’s consensus expectations and significantly undervalued for 2021’s expected earnings and cash flow recovery.

Carlisle Fundamentals

  • quality score: 11/11 Super SWAN

  • dividend safety score: 5/5 above-average (1% to 2% dividend cut risk in this recession, 0.5% in a normal recession)

  • Max portfolio risk cap recommendation: 7% or less

  • yield: 1.8% vs 1.3% 13-year median yield

  • current price: $118.81

  • Potential good buy price: $145 or less

  • 2021 average historical fair value: $153 ($132 to $182 range, Morningstar quant 2020 estimate $118.16, uncertainty “high”, I concur based on the fair value range)

  • approximate discount to fair value: 22%

  • DK rating: potentially strong buy

  • historical fair value: 17 to 20 PE

  • current blended PE: 19.0 (16.1 2021 consensus)

  • earnings yield (Chuck’s “essence of valuation”): 5.3% vs 6.7% recommended

  • Growth priced into stock: about 5.3% CAGR according to Graham/Dodd fair value formula

  • Growth priced in according to historical PEG ratio: 12.7% CAGR

  • long-term growth consensus: 15.0% CAGR

  • the margin of error adjusted analyst long-term consensus growth forecast: 10% to 22% CAGR

  • 5-year total return potential: 12% to 21% CAGR (analyst consensus 16.3% CAGR)

  • PEG ratio: 1.07 vs 1.50 historical vs 2.61 S&P 500 vs 2.35 historical S&P 500

  • Investment Decision Score: 90% = A- very good

Carlisle Investment Decision Score

Goal Scores Scale Interpretation
Valuation 4 Good Buy CSL’s 6.22% discount to fair value earns it a 4-of-4 score for valuation timeliness
Preservation of Capital 5 Average CSL’s S&P credit rating, BBB, implies a 7.5% chance of bankruptcy risk and earns it a 5-of-7 score for Preservation of Capital
Return of Capital NA Above Average CSL’s 13.58% vs. the S&P’s 10.92% 5-year potential for return via dividends earns it an NA-of-10 Return of Capital score, historical yield 1.3% so treated as a growth stock
Return on Capital 10 Exceptional CSL’s 11.10% vs. the S&P’s 3.95% 5-year probability-weighted returns earns it a 10-of-10 Return on Capital score)
Total Score 19 Max score of 21
Investment Score 90%
Investment Letter Grade A- Very Good
S&P’s Score 73/100 = C(Market Average)

(Source: Dividend Kings Automated Investment Decision Score Tool)

CSL is one of the best hyper-growth dividend champions that few people have heard of. Dividend Kings’ Phoenix portfolio has bought it five times so far since March and plans to buy it at least one more time in the coming week.

Increased US and global infrastructure spending is a major secular mega-trend that analysts expect to drive continued 15% to 18% CAGR long-term growth for CSL, approximately 2.5X to 3X faster growth than what’s expected from the S&P 500.

Carlisle Quality & Safety Analysis

Carlisle Total Return Potential & Investment Decision Score

Carlisle Historical Returns, Volatility & Future Risk Analysis

Bottom Line: Market Downturns Are A Great Opportunity For Prudent Long-Term Income Investors To Go Bargain Hunting For Dividend Aristocrats

No one knows what the stock market will do in October or Q4. In the short-term, the market is a casino, with sentiment and momentum driving stock prices, often causing them to become outrageously disconnected from fundamentals.

However, over the long-term 90% to 91% of market returns are a function of fundamentals and valuation. In other words, probability, statistics, and math ensure there is only one possible long-term outcome, also like in a casino.

Prudent long-term income investors who understand that short-term volatility is something to be ignored, or better yet embraced and harnessed, can always find reasonable to attractively priced blue-chips to meet any need, goal, or risk profile.

Today

  • Johnson & Johnson represents the safest and lowest volatility dividend champion you can safely buy
  • Altria represents the safest high-yield, highest returns on capital, and a relatively lower volatility/defensive name
  • Carlisle Companies is the fastest-growing dividend champion and an 11/11 quality Super SWAN and a future dividend king (in 2026)

(Source: imgflip)

There is NEVER a need for prudent long-term investors to take excessive risks with their hard-earned savings.

As my fellow Dividend King, Chuck Carnevale says “It’s a market of stocks, not a stock market.”

Something great is always on sale if you have the right watchlist and screening tools.

(Source: AZ quotes)

Gamblers and speculators pray for luck, prudent long-term investors make their own.

Not by buying the next red hot IPO, or timing the tops and bottoms of red hot assets like Tesla (TSLA), Snowflake (SNOW), or Bitcoin, but merely by following the time tested and evidence-based approaches to compounding income and wealth over time.

  1. sound asset allocation & risk management for your needs
  2. quality companies
  3. with competent and trustworthy management with a good track record of adapting and overcoming challenges over time
  4. bought at reasonable to attractive valuations
  5. owned for the long-term when 90% to 91% of total returns are a function of fundamentals and valuations, not luck

—————————————————————————————-

Dividend Kings helps you determine the best safe dividend stocks to buy via our Automated Investment Decision Tool, Company Screening Tool, & Research Terminal.

Membership also includes

  • Access to our five model portfolios
  • Daily Blue-Chip Deal Videos 
  • 50% discount to iREIT
  • 50 exclusive articles per month
  • Our weekly podcast
  • 20% discount to F.A.S.T Graphs
  • Real-time chatroom support
  • Exclusive daily updates to all my retirement portfolio trades
  • Our “Learn How To Invest Better” Library
  • Access to numerous valuable investing tools

Click here for a two-week free trial so we can help you achieve your financial goals while sleeping well at night in all market & economic conditions.

Disclosure: I am/we are long JNJ, MO, CSL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Dividend Kings owns JNJ, MO, and CSL in our portfolios.



Via SeekingAlpha.com