Tuesday, December 13, 2011

Dividends Don't Lie

[from online forum]

I'd like to recommend "Dividends Don't Lie" by G. Weiss and "Dividends Still Don't Lie" by K. Wright. I read them last year and was very impressed.

Their method is to buy blue chips at discount. Dividends serve investors not only as income but also a metric for valuation.

The major argument is that dividends are announced in advance by companies and actually paid out. Unlike earning or even free cash flow, dividends do not lie.

The board members are the ones that really know how their firms are doing. They are not likely to raise dividends only to fail to deliver, especially for the long-established firms with a history of paying out.

Last, the current yield can be used against historical patterns to provide good valuation.


Enjoy and judge for yourself

No comments:

Post a Comment