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FAQ: Why Are There Firms On Your Dividend Growth Watch List That Don't Have Attractive Dividend Growth Profiles...Yet

publication date: Dec 3, 2012
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author/source: Valuentum Analysts

Our Dividend Growth watch list and our screen of companies with 'high Valuentum Buying Index ratings and strong dividend growth prospects' include the firms that we are currently monitoring for potential inclusion into our Dividend Growth portfolio. The vast majority of companies on our Dividend Growth watch list are well-positioned and have dividends that are posied for growth. Others, however, such as PepsiCo (PEP), for example, have an elevated dividend yield but a borderline Dividend Cushion score (and safety and growth metrics), where we're waiting for fundamental improvement before we would consider adding the company to our portfolio. But even though PepsiCo isn't a slam-dunk dividend growth investment in our view (at this time), we think it is still worthy of watching. In other words, if PepsiCo's balance sheet and cash flow position improve relative to its dividend payments in the future, members can track the performance real time with the firm's metrics conveniently located in our watch list. If we didn't include this borderline firm in our watch list, we may miss the opportunity to highlight an interesting dividend growth firm when/if its fundamentals improve. That said, our Dividend Growth portfolio includes our favorite dividend growth names at any time.


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