With the recent pullbacks in dividend growth companies such as Coca Cola (KO), and Target (TGT), one might ponder on what to pick up. I like a good current yield, dividend growth, and an acceptable overall total return for my portfolio. I believe presetting my buy target prices ahead of time will prevent emotional trading. I determine the buy target prices by following this list:
- checking valuations and fundamentals
- setting a desired dividend yield (range)
- using simple technical analysis
Here I shall show you my simple process to help you filter down your watchlist for companies to buy for long-term dividend growth and prosperity!
Preset Buy Target Prices with a Watchlist
Develop a watchlist of quality companies you want to buy. So that when you have excess cash on hand, you can buy the one that fits in your portfolio. Namely, it increases your overall yield, it further diversifies your portfolio, it is the best valued company at the time, or a mix of all of the above.
Here is what I do. On Finviz, I organize portfolios of watchlists. These watchlists have buy price targets which are made without emotion, BEFORE a buying opportunity presents itself. These buy targets are the maximum prices I’m willing to pay for each company.
In the “Cost” column, I set the buy price target for each company.
When the “Gain%” column is in the red, it means your preset buy target is reached.
When a company on your watchlist shows a red percentage, you can then decide whether it still fits into your portfolio.
I set my buy targets based on a mix of valuations, technical analysis with the moving averages, and target dividend yield.
I use a list of resources for checking valuations, determining the desired yield range, and incorporating simple technical analysis with the goal of determining the maximum price I am willing to pay for a company. Setting this target buy price in a Finviz portfolio allows me to quickly glance through it to determine which company maybe my next buy.
I use 3 main resources to check valuations and fundamentals: FAST Graphs, MorningStar, and Value Line. I use a combination of current yield, past dividend history, and expected dividend growth in the near future to determine my desired yield for a company. Using resources such as YCharts, SeekingAlpha, and Chowder’s Rule help me determine my desired yield. Using a Google spreadsheet, I’m able to set up a watchlist which gives me an action of “BUY” or “WATCH” by comparing the current yield with my desired yield. Conveniently, Google updates the price, yield, and action dynamically.
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Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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