MoneyEarlier this week I discussed media and investor concern over the fact that the market has had a wonderful run up the past couple years.  The market run up has led to many worries of a possible bubble or definitely an impending market correction.

I discussed how personally, I’m not too concerned of this talk.  I’m keeping on with my plan of putting available money to use by purchasing high quality dividend growth companies that I believe to still be trading at reasonable valuations.

While I agree many companies are trading at valuations that I’ll pass on, looking over my list of 35 top dividend growth stocks, I found a few that I personally wouldn’t hesitate to purchase at today’s price levels.

Here are 6 companies that I consider worth purchasing today if you have money available:

  • Aflac (AFL) -  Aflac remains one of my favorite companies to own.  Aflac is in the insurance industry selling supplemental health and life insurance plans in the United States and Japan.  Aflac has a 31 year dividend growth streak and currently trades at a P/E around 10.  I believe this represents a fair valuation for Aflac and would/have been purchasing shares near this valuation for long term investment.  Read my analysis of Aflac here.
  • Chevron (CVX) – Chevron is a leading energy company involved in petroleum operations, chemicals operations, mining activities, power generation and energy services.  Chevron has a 26 year long dividend growth streak.  Chevron currently trades at a P/E ratio around 10.  I believe this should be a good valuation level to pick up shares for long term investment.
  • Deere & Co. (DE) - Deere & Co. is one of the world’s leading agriculture and construction equipment manufacturers.  Deere has a 10 year dividend growth streak and currently trades at a P/E near 10.  I’m a big fan of Deere and definitely don’t mind picking up shares for long term investment at current valuation levels.  You can read my recent full analysis of Deere here.
  • Microsoft (MSFT) – Many people love to hate on Microsoft as an investment because it hasn’t performed that well over the past decade.  However, this company has been doing everything right for investors as far as growing earnings, paying out increasing dividends and decreasing outstanding share counts.  Microsoft has a 11 year dividend growth streak and currently trades at a P/E around 13.5.  Personally, I don’t mind buying Microsoft for the long term at current price levels.
  • Wells Fargo (WFC) – Many people will be against this choice and I can certainly understand.  Wells Fargo was forced to cut their dividend rate during the banking crisis in 2008.  However, they are back at growing their dividend for investors and they are one of the nations strongest banks.  WFC also offers great value selling at a P/E around 12.  I’m a buyer of WFC at these levels for the long term.
  • Wal-Mart (WMT) - Another of my favorites.  Wal-Mart is the world’s leading retailer.  They have a 39 year dividend growth streak.  I will continue to own Wal-Mart until someone can come take their place as the best retailer in the world which I don’t believe will be anytime soon.  Currently, Wal-Mart trades at a P/E ratio around 15.  While I don’t believe this is a great bargain, I think it’s still a fair valuation and investors will do well buying this company for a long term investment.

There’s my list of 6 companies I’m still interested in buying at current market levels.  I’m sure there are many other great companies currently selling at reasonable valuations.  All it takes is a little investigating and you can usually turn up a few good options worthy of investing in for the long term.

 

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5 Responses to Can’t Find Anything to Buy? Consider These Dividend Growth Stocks!

  1. All 6 of these are great long term investments. I’m not worried about WFC at all, and some of my best investments were from picking up some financials coming out of the collapse. I really want to add more CVX and WMT and wouldn’t mind starting a position in DE. Although all of these should treat shareholders wonderfully over the next one to two decades.

    • Dan Mac says:

      Thanks JC. I just wanted to show readers that even though the talk is all about the market being near all time highs, for the long term investor there are still some good companies available at prices worth purchasing them.

      Glad your not worried about WFC, I think with WFC and with all companies we own, as investors we just need to monitor the environment they operate in and make sure we don’t get caught off guard if bad news should strike.

  2. Martin says:

    Great list. I would add to it a few, such as AT&T. But I do not have the problem of not knowing what to invest in as now I am saving cash. Maybe next month :)

  3. Matt says:

    I agree with Martin – I like your list, except maybe I’m not quite so into WalMart right now. But that’s ok. AT&T is a solid addition – I’m also looking at American Express and GE as potential adds to my long-term dividend portfolio.

    • Dan Mac says:

      Thanks Matt! I think out of the group of companies I list, Wal-Mart is the most fairly valued so investors aren’t getting a great bargain but I do think it’s a great company at a reasonable price right now. I also like GE but I’d have to look at current valuation to see if I’d be interested in adding to my position at the present.

      As for T, I guess I’m just not understanding why everyone likes it so much. Good initial yield but low growth. To me this will most likely be an average investment over time. I do have them on my watch list though because of the higher income yield and reliability of the company.

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