Linked here is a PDF copy of my detailed analysis of V.F. Corp. (VFC). Below are some highlights from the above linked analysis:

Company Description: V.F. Corp is a global apparel company with leading shares in denim and daypacks. The company is transforming into a designer and marketer of lifestyle apparel brands.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

VFC is trading at a premium to all four valuations above. If I exclude the high and low valuations and average the remaining two, VFC is trading at a 40.9% premium. VFC had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

VFC earned one Star in this section for 3.) above. VFC has paid a cash dividend to shareholders every year since 1941 and has increased its dividend payments for 34 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

VFC earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. The negative NPV MMA Diff. means that on a NPV basis for every $1,000 invested in VFC you would earn $1,669 less than a MMA earning a 20-year average rate of 4.61%. If VFC grows its dividend at 4.0% per year, it will never equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: VFC is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. VFC’s has a strong management team in place. Recent acquisitions and international expansion provide for good growth potential. VFC continues to look for acquisitions of brands that will fit its portfolio. The denim business provides steady growth and generates significant cash flow.

Conclusion: VFC lost one Star in the Fair Value section, earned one Star in the Dividend Analytical Data section and lost one Star in the Dividend Income vs. MMA section for a net total of negative one Star. Since my scale bottoms out at zero, this quantitatively ranks VFC as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $51.18 before VFC’s NPV MMA Diff. increases to the $3,000 NPV MMA Diff. that I like to see. At that price VFC would yield 4.53%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the $3,000 NPV MMA Differential I’m looking for, the calculated rate is 9.7%. This dividend growth rate is more than double the 4.0% used in this analysis. VFC may be headed in the right direction, but at this level it does not earn a spot in my income portfolio.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I had no position in VFC (0.0% of my Income Portfolio) .

What are your thoughts on VFC?

Linked here is a PDF copy of my detailed analysis of Colgate Palmolive (CL). Below are some highlights from the above linked analysis:

Company Description: Colgate-Palmolive Company (Colgate) is a consumer products company, whose products are marketed throughout the world. Colgate’s Oral Care products include toothpaste, toothbrushes, oral rinses, dental floss and pharmaceutical products.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

CL is trading at a premium to all four valuations above. Since CL’s tangible book value is not meaningful, a Graham number can not be calculated. If I exclude the high and low valuations and average the remaining two, CL is trading at a 51.1% premium. CL had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

CL earned one Star in this section for 3.) above. CL has paid a cash dividend to shareholders every year since 1895 and has increased its dividend payments for 45 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

CL earned no Stars in this section. The NPV MMA Diff. of the $176 is below the $2,500 minimum I look for in a stock that has increased dividends as long as CL has. If CL grows its dividend at 11.4% per year, it will take 14 years to equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%. The 14 years is more than the 10 years maximum I like to see. .

Other: CL is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. Demand for household and personal care products is generally static, and not affected by changes in the economy or geopolitical factors. The industry is mature and quite competitive. CL’s restructuring are likely to continue to benefit EPS growth. The CEO transition from Reuben Mark (CEO since 1984) to Ian Cook (former COO, became CEO on July 1, 2007) appears to have gone smoothly.

Conclusion: CL lost one Star in the Fair Value section, earned one Star in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a net total of zero Star. This quantitatively ranks CL as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $62.10 before CL’s NPV MMA Diff. decreases to the $3,000 NPV MMA Diff. that I like to see. At that price CL would yield 2.51%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the $3,000 NPV MMA Differential I’m looking for, the calculated rate is 13.9%. CL has not grown its dividend 13.9% or above since 2005 when its year-over-year dividend growth rate was 15.6%. CL will not be joining my income portfolio anytime soon.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I had no position in CL (0.0% of my Income Portfolio) .

What are your thoughts on CL?

Linked here is a PDF copy of my detailed analysis of McGraw-Hill Companies Inc (MHP). Below are some highlights from the above linked analysis:

Company Description: The McGraw-Hill Companies Inc. is a leading information services organization serves worldwide markets in education, business, industry, other professions and government.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

MHP is trading at a discount to 1.), 2.) and 3.) above. Since MHP’s tangible book value is not meaningful, a Graham number can not be calculated. If I exclude the high and low valuations and average the remaining two, MHP is trading at a 11.7% discount. MHP earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

MHP earned one Star in this section for 3.) above. MHP has paid a cash dividend to shareholders every year since 1937 and has increased its dividend payments for 35 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

MHP earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. The negative NPV MMA Diff. means that on a NPV basis for every $1,000 invested in MHP you would earn $2,310 less than a MMA earning a 20-year average rate of 4.61%. If MHP grows its dividend at 7.3% per year, it will never equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: MHP is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. MHP noted in its 2007 10-K report filed with the SEC in February 2008 that among the risks facing its businesses are the level of educational funding both domestically and internationally, and the health of capital and equity markets, including future interest rate changes.

Conclusion: MHP earned one Star in the Fair Value section, earned one Star in the Dividend Analytical Data section and lost one Star in the Dividend Income vs. MMA section for a net total of one Star. This quantitatively ranks MHP as a 1 Star-Very Weak stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $24.91 before MHP’s NPV MMA Diff. decreases to the $3,000 NPV MMA Diff. that I like to see. At that price MHP would yield 3.53%. MHP will not be joining my dividend income portfolio in the near-term.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I had no position in MHP (0.0% of my Income Portfolio) .

What are your thoughts on MHP?

Linked here is a PDF copy of my detailed analysis of Nucor Corp (NUE). Below are some highlights from the above linked analysis:

Company Description: Nucor Corporation is engaged in the manufacture and sale of steel and steel products. As the largest minimill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

NUE is trading at a discount to 1.), 2.) and 3.) above. If I exclude the high and low valuations and average the remaining two, NUE is trading at a 30.9% discount. NUE earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

NUE earned three Stars in this section for 1.), 2.) and 3.) above. Rolling 4-yr Div. > 15% means that dividends grew on average in excess of 15% for each consecutive 4 year period over the last 10 years (1998-2001, 1999-2002, 2000-2003, etc.) I consider this a key metric since dividends will double every 5 years if they grow by 15%. NUE has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 35 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

NUE earned one Star in this section for 1.) above. The NPV MMA Diff. of the $9,719 is in excess of the $2,500 minimum I look for in a stock that has increased dividends as long as NUE has. If NUE grows its dividend at 15.0% per year, it will take 9 years to equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: NUE is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. Even though NUE is exposed to cyclical end-markets, the company has a low total debt to assets ratio and generates substantial free cash flow. With the global steel industry consolidating via mergers, the increased concentration of production among fewer companies should result in greater pricing discipline. This should help NUE to continue generating strong free cash flow for the next several years, thus enabling NUE to raise its dividend, make acquisitions and invest in new capital/technology improvements.

Conclusion: NUE earned one Star in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a net total of five Stars. This quantitatively ranks NUE as a 5 Star-Strong Buy.

Using my D4L-PreScreen.xls model, I determined the share price could rise to $70.16 before NUE’s NPV MMA Diff. decreases to the low-end $3,000 NPV MMA Diff. that I like to see. At that price NUE would yield 1.82%. I find NUE intriguing and would consider adding it to my income portfolio sometime in the future.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I had no position in NUE (0.0% of my Income Portfolio).

What are your thoughts on NUE?

Linked here is a PDF copy of my detailed analysis of Avery Dennison (AVY). Below are some highlights from the above linked analysis:

Company Description: Avery Dennison Corp. is a leading worldwide manufacturer of pressure-sensitive adhesives and materials, office products, labels, retail systems and specialty chemicals.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

AVY is trading at a discount to 1.) and 3.) above. Since AVY’s tangible book value is not meaningful, a Graham number can not be calculated. If I exclude the high and low valuations and average the remaining two, AVY is trading at a 29.2% premium. AVY had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

AVY earned one Star in this section for 3.) above. AVY has paid a cash dividend to shareholders every year since 1919 and has increased its dividend payments for 29 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

AVY earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. The negative NPV MMA Diff. means that on a NPV basis for every $1,000 invested in AVY you would earn $1,387 less than a MMA earning a 20-year average rate of 4.61%. If AVY grows its dividend at 1.9% per year, it will never equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: AVY is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. AVY is the market leader in pressure-sensitive adhesives and office products. It has enjoyed above-average growth rates in key end-markets and a relatively strong balance sheet. labels. In 2007 AVY acquired Paxar, a major competitor in the product identification industry. AVY should see significant cost savings over the next few years.

Conclusion: AVY lost one Star in the Fair Value section, earned one Star in the Dividend Analytical Data section and lost one Star in the Dividend Income vs. MMA section for a net total of negative one Star. Since my scale bottoms out at zero, this quantitatively ranks AVY as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $31.03 before AVY’s NPV MMA Diff. increases to the $3,000 NPV MMA Diff. I like to see. At that price AVY would yield 5.28%. At 1.9%, AVY’s dividend growth rate is anemic. If AVY were to grow its dividend at 7.6% it would reach the desired $3,000 NPV MMA Diff. at the current yield. AVY will not be invited to join my income portfolio anytime soon.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I did not own shares of AVY (0.0% of my Income Portfolio).

What are your thoughts on AVY?

Linked here is a PDF copy of my detailed analysis of Air Products and Chemicals Inc. (APD) (alt.1, alt.2). Below are some highlights from the above linked analysis:

Company Description: Air Products and Chemicals Inc. produces industrial gases and specialty and intermediate chemicals and also has interests in environmental and energy-related businesses.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

APD is trading at a premium to all four valuations above. If I exclude the high and low valuation and average the remaining two, APD is trading at a 24.0% premium. APD had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

APD earned two Stars in this section for 3.) and 4.) above. APD has paid a cash dividend to shareholders every year since 1954 and has increased its dividend payments for 26 consecutive years. It’s one year dividend growth rate exceeded its 5-year growth rate. This could indicate the growth rate is accelerating.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

APD earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. The negative NPV MMA Diff. means that on a NPV basis for every $1,000 invested in APD you would earn $802 less than a MMA earning a 20-year average rate of 4.61%. If APD grows its dividend at 10.4% per year, it will never equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: APD is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index. On the plus side, the industrial gases industry tends to have stable growth versus commodity chemicals. On the minus side, APD experiences volatile raw material cost in the chemical segment. APD has a relatively strong balance sheet.

Conclusion: APD lost one Star in the Fair Value section, earned two Stars in the Dividend Analytical Data section and lost one Star in the Dividend Income vs. MMA section for a net total of zero Stars. This quantitatively ranks APD as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $61.74 before APD’s NPV MMA Diff. increases to the $3,000 NPV MMA Diff. I like to see. At that price APD would yield 2.75%. Given APD‘s current valuation, I will not be purchasing shares anytime soon.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I do not own shares of APD (0.0% of my Income Portfolio).

What are your thoughts on APD?

Recent Stock Analyses:

• Stock Analysis: Family Dollar Stores Inc. (FDO)
• Stock Analysis: Stanley Works (SWK)
• Stock Analysis: M&T Bank Corporation (MTB)
• Stock Analysis: Kimberly-Clark Corporation (KMB)
• More Stock Analyses

Linked here is a PDF copy of my detailed analysis of Stanley Works (SWK) (alt.1, alt.2). Below are some highlights from the above linked analysis:

Company Description: Stanley Works is a worldwide producer of tools, hardware and specialty hardware for home improvement, consumer, industrial and professional use.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

SWK is trading at a discount to only 3.) above. Since SWK’s tangible book value is not meaningful, a Graham number can not be calculated. If I exclude the high and low valuation and average the remaining two, SWK is trading at a 16.1% premium. SWK had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

SWK earned one Star in this section for 3.) above. SWK has paid a cash dividend to shareholders every year since 1877 and has increased its dividend payments for 41 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA

SWK earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. The negative NPV MMA Diff. means that on a NPV basis for every $1,000 invested in SWK you would earn $2,013 less than a MMA earning a 20-year average rate of 4.61%. If SWK grows its dividend at 3.3% per year, it will never equal the cumulative earnings from a MMA yielding an estimated 20-year average rate of 4.61%.

Other: SWK is both an S&P 500 Dividend Aristocrat and a member of The Broad Dividend Achievers™ Index. Though SWK has a strong brand name and is well positioned versus it competitors, SWK is is experiencing a cyclical downturn from a weak housing market and slowing U.S. economy. Overseas growth has been able to partially offset this downturn.

Conclusion: SWK lost a Star in the Fair Value section, earned a Star in the Dividend Analytical Data section and lost a Star in the Dividend Income vs. MMA section for a net total of -1 Stars. Since my scale bottoms out at zero, this quantitatively rates SWK as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $26.32 before SWK’s NPV MMA Diff. increases to the $3,000 NPV MMA Diff. I like to see. At that price SWK would yield 4.79%. Given SWK’s current valuation, I will not be purchasing shares anytime soon.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I do not own shares of SWK (0.0% of my Income Portfolio).

What are your thoughts on SWK?

Recent Stock Analyses:

• Stock Analysis: M&T Bank Corporation (MTB)
• Stock Analysis: Sherwin-Williams Co (SHW)
• Stock Analysis: Consolidated Edison, Inc. (ED)
• Stock Analysis: PPG Industries, Inc. (PPG)
• More Stock Analyses

Linked here is a PDF copy of my detailed analysis of Kimberly-Clark Corporation (KMB) (alt.1, alt.2). Below are some highlights from the above linked analysis:

Company Description: This leading consumer products company’s global tissue, personal care and health care brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

KMB is trading at a discount to 1.) and 3.) above. If I exclude the high and low valuation and average the remaining two, KMB is trading at a 5.9% premium. KMB had a Star deducted for trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

KMB earned one Star in this section for 3.) above. KMB has paid a cash dividend to shareholders every year since 1935 and has increased its dividend payments for 36 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA.

KMB earned both available Stars in this section. With a NPV MMA Diff. of $8,952, KMB is well above the $3,000 I look for in a company that is both an Achiever and an Aristocrat. KMB’s current yield of 4.19%, exceeds the 20-year expected MMA rate of 4.61%.

Other: KMB is both an S&P 500 Dividend Aristocrat and a member of The Broad Dividend Achievers™ Index. The generally static demand for household and personal care products are usually not affected by changes in the economy or political events. KMB’s 2008 earnings should benefit from the 2005 strategic cost reduction program, but for the most part, it will be over shadowed by higher commodity costs.

Conclusion: KMB lost a Star in the Fair Value section, earned a Star in the Dividend Analytical Data section and two Stars in the Dividend Income vs. MMA section for a net total of 2 Stars. This quantitatively rates KMB as a 2 Star-Weak stock.

Using my D4L-PreScreen.xls model, I determined the share price could go up to $73.97 before KMB’s NPV MMA Diff. drops to the $3,000 NPV MMA Diff. I like to see. At that price KMP would yield 3.14%. Like the analysis on LLY earlier this month, KMB is a 2 Star-Weak stock that is very close to being a 4 Star-Buy. Given KMB’s strong NPV MMA Diff., I would be very comfortable initiating a position at $55.50, or 5% above the $52.87 calculated fair value. This would be a $0.49 or 0.9% decrease from KMB recent price of $55.99.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I do not own shares of KMB (0.0% of my Income Portfolio).

What are your thoughts on KMB?

Recent Stock Analyses:

• Stock Analysis: Sherwin-Williams Co (SHW)
• Stock Analysis: Consolidated Edison, Inc. (ED)
• Stock Analysis: PPG Industries, Inc. (PPG)
• Stock Analysis: Abbott Laboratories (ABT)
• More Stock Analyses

Linked here is a PDF copy of my detailed analysis of Consolidated Edison, Inc. (ED) (alt.1, alt.2). Below are some highlights from the above linked analysis:

Company Description: Consolidated Edison, Inc., through its subsidiaries, provides electric, gas, and steam utility services in the United States serving parts of New York, New Jersey and Pennsylvania.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

ED is trading at a discount to 1.), 3.) and 4.) above. If I exclude the high and low valuation and average the remaining two, ED is trading at a 14.8% discount. ED earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

ED earned one Star in this section for 3.) above. ED has paid a cash dividend to shareholders every year since 1885 and has increased its cash dividend payment for 35 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA.

ED earned both available Stars in this section. With a NPV MMA Diff. of $4,321, ED is well above the $3,000 I look for in a company that is both an Achiever and an Aristocrat. ED’s current yield of 6.16%, exceeds the 20-year expected MMA rate of 4.61%.

Other: ED is both an S&P 500 Dividend Aristocrat and a member of The Broad Dividend Achievers™ Index. As a regulated electric and gas utility, ED produces a strong and steady cash flows. It has a solid balance sheet, an A- credit rating and operates in a historically supportive regulatory environment.

Conclusion: ED earned a Star in the Fair Value section, earned one Star in the Dividend Analytical Data section and two Stars in the Dividend Income vs. MMA section for a net total of 4 Stars. This quantitatively rates ED as a 4 Star-Buy.

Using my D4L-PreScreen.xls model, I determined the share price could go up to $41.39 before ED’s NPV MMA Diff. drops to the $3,000 NPV MMA Diff. I like to see. At that price ED would yield 5.65%. I would be very comfortable adding to my position at the current price of $38.48 and a 6+% yield.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I own shares of ED (2.9% of my Income Portfolio).

What are your thoughts on ED?

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Linked here is a PDF copy of my analysis of Abbott Laboratories (ABT) (alt.1, alt.2). Below are some highlights from the above linked analysis:

Company Description: Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a diversified line of healthcare products including: drugs, nutritional products, diabetes monitoring devices and diagnostics.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

ABT is trading at a discount to only 3.) above. If I exclude the high and low valuation, and average the remaining two valuations, ABT is trading at an astounding 61.6% premium. A Star is deducted since ABT is trading at a premium in excess of 5%.

Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:

1. Rolling 4-yr Div. > 15%
2. Dividend Growth Rate
3. Years of Div. Growth
4. 1-Yr. > 5-Yr Growth
5. Payout 15% of avg.

ABT earned two Stars in this section for 3.) and 4.) above. It has paid a cash dividend to shareholders every year since 1903 and has increased its quarterly cash dividend payments for 36 consecutive years. The 1-Yr. > 5-Yr Growth metric indicates that dividend growth has been accelerating.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to >MMA.

ABT was deducted one Star in this section for 1.) above. At its current yield of 2.51% and a dividend growth rate of 7.1%, ABT will under-perform a MMA averaging 4.61% by $957 per $1,000 invested over 20 years.

Other: ABT is a member of the S&P 500, is an Achiever and an Aristocrat. Like all drug companies, ABT is facing challenges to their branded patents, drug development and regulatory issues. However, ABT has a relatively strong new product pipeline, with possible significant launches in both the medical device and pharmaceutical areas.

Conclusion: ABT lost a Star in the Fair Value section, earned two Stars in the Dividend Analytical Data section and lost one Stars in the Dividend Income vs. MMA section for a net total of 0 Stars. This quantitatively rates ABT as a 0 Star-Avoid stock.

Using my D4L-PreScreen.xls model, I determined the share price would have to drop to $40.55 for the NPV of MMA Differential to reach the $2,500 minimally acceptable level for from a company that is both an Achiever and an Aristocrat. In short, ABT is overvalued and not a good dividend investment at this time. Thus, I won’t be buying ABT any time soon.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I do not own shares of ABT (0.0% of my Income Portfolio).

What are your thoughts on ABT?

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