4 Fairly Valued Fast-Growing Dividend Growth Stocks

Dividend Growth Stocks

The dividend growth stocks in this video are: Oracle (ORCL), Broadcom (AVGO), NetApp (NTAP), NXP Semiconductors (NXP)

dividend growth stocks portfolio

dividend growth stocks portfolio

Value investing is not a singular investment concept. In truth, value investing is multifaceted and applies to several strategies that can be implemented. With this in mind, it is important to recognize that value and growth are functionally related. Only being willing to invest in anything when it is fairly valued is prudent. However, value does not automatically suggest a high rate of return. Higher returns come with higher growth. Therefore, when value and growth are combined above average returns at below-average risk become possible.

Furthermore, faster-growing companies (stocks) are valued more generously than their slower-growing counterparts. In other words, it makes sense to pay more for faster growth, but only at reasonable limits. The legendary investor Peter Lynch introduced the concept that fair value for fast-growing stocks exists when the P/E ratio is equal to the company’s earnings growth rate.

The 4 dividend growth stocks covered in this video offer above-average growth at reasonable valuations. Above-average growth in earnings also leads to above-average growth of the dividend income. Therefore, investors can seek lower current yields on faster-growing businesses because future yields offer the potential to be much higher. Therefore, when you are investing for the future growth of the business, the income can make a great deal of sense. In recent markets, this was hard to find. Nevertheless, the current environment is providing opportunities for GARP. This is an acronym for growth at a reasonable price. In this video, I offer growth opportunities at reasonable prices in the information technology sector.

Video Length: 00:17:07

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Disclosure: Long ORCL, AVGO at the time of writing.

Disclaimer: The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to ...

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