Investment Quality Trends’ investment thesis, “When all other factors that rate analytical consideration have been digested, the underlying value of dividends, which determines yield, will in the long run also determine price,” is reflected in the undervalue and overvalue levels on the newsletter’s chart below. The levels, represented by the solid lines, reflect consistent dividend increases with their stairstep pattern. You can see that at the current dividend rate of $2.52 per year (for a current yield of 2.8%), Exxon Mobil Corp. (XOM, NYSE) is undervalued below 84.
Kelley R. Wright, Investment Quality Trends, www.iqtrends.com, 760-585-1459, 7/1/13