CINF - 13 Dividend Aristocrat Bargains Yielding As Much As 9%

2024-03-22 07:00:00 ET

Summary

• Combining quality factors with free cash flow yield, considered the best value metric of the last 33 years, can potentially deliver exceptional investing ideas.
• Here's how to find the highest FCF yielding dividend aristocrats, with strong balance sheets, good risk management, and strongly growing businesses.
• They yield an average yield of 9%, a peak yield of 9%, 10% consensus growth, a BBB+ credit rating, and 28% fundamentally justified upside potential in the next year.
• The 13.5% historical income growth since 1998 is expected to continue, creating a high-yield, relatively low volatility sleep well at night basket of dividend aristocrat bargains worth considering.
• One that trades at 15X EV/FCF and a 50% lower valuation than the S&P 500. Quality, value, yield, and growth, these 13 aristocrats offer all of these and more.

Like Warren Buffett, my investing strategies have evolved. Buffett began by hunting for "cigar butts" in the traditional deep-value style of Ben Graham, his mentor.

In the 1930s, 1940s, 1950s, and even 1960s, information was so scarce on Wall Street that he had to write to companies requesting their annual reports.

Many poorly managed companies had more net cash on their balance sheets than their market cap back then. This is Ben Graham's original concept of "net net" investing, meaning that the company's liquidation value was greater than its market cap.

Or, to put it simply, a company so cheap that if you buy all its shares, sell off all assets, and pay off all debts, you instantly make a profit....

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