- Investors have flocked to dividend growth stocks ever since the Federal Reserve began suppressing interest rate via QE.
- Dividend Aristocrats have been among those most favored, but their popularity has led to their yields dropping to levels that would not be competitive after a modest rise in rates.
- Screening the Dividend Aristocrats for reasonable P/E ratios and 5-year EPS growth rates above 10% turns up only 7 stocks likely to continue to appeal to investors.
- Even the few otherwise attractive Dividend Aristocrats have high levels of debt relative to their capitalization.
- Buying almost all Dividend Aristocrats is likely to lead to serious price deterioration that will take years for these stocks to grow out of.
For further details see:
Only 7 Dividend Aristocrats May Have What It Takes To Survive An Inflation-Driven Rate Increase