ROE Added to Watchlist

December 6, 20173 Comments

Updates

All of the data values on the homepage watchlist have been updated. This includes David Fish’s monthly update of the Dividend Champions spreadsheet data, and the Morningstar fair values estimates. Qualcomm (QCOM) had the highest fair value estimate increase from $68 to $75 per share. Simon Property Group (SPG) had the largest drop in fair value estimate from $191 down to $145 per share. Based on their current price of $162.76 that flipped their fair value to current price difference from 15% undervalued to 12.2% overvalued.  A huge swing!

Normally a down swing in fair value might be attributable to near term competition or a bad quarter. However, this change in Morningstar’s valuation came from the headwinds facing the shopping mall retail industry, as online retail sales are growing at a double-digit rate and lowering brick and mortar sales and in turn rent demand for lease space. Morningstar has downgraded the economic moat rating of all of the shopping mall REIT’s from Narrow to None due to this industry disruption . My watchlist criteria does not allow for companies under disruption (see Watchlist Requirements below the watchlist) that alters a company’s competitive advantages, so I have dropped SPG from my watchlist.

Tracking Return on Equity

ROEI added a new column to the Watchlist. You can never have enough information right? All kidding aside Return on Equity is an excellent business profitability indicator to help evaluate the strength and efficiently of a business. Now you can find it in column 6 under the Strength section, the heading is TTM ROE which stands for trailing twelve month return on equity. Many dividend growth investors evaluate ROE as part of their overall research on a company. ROE varies from industry to industry, the important thing to check is how a company’s ROE compares to their industry average, and that the company ROE trend is stable or rising. 

Filed in: Dividend Growth InvestingWebsite Tools

Comments (3)

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  1. kaliumd1 says:

    Great Job updating the Site and particularly adding in wishlists, which is further broken down per sector. I can’t help but wonder why PII was taken off the CD list?

    Thanks

    • BigGeek says:

      Hi kaliumd1

      PII has gone up so much in the last year that when I ran the numbers dividend yield (1.75%) and average dividend growth rate (9.6%) for the number of years to reach a 10% yield on cost it didn’t make the cutoff. However, after adjusting to a $115 fair value (2.0% yield) PII made the cut, so I have added it. In short, you were right I missed it! Thanks for the good catch, it is now available on the Consumer Discretionary sector wishlist.

      -Dividend Geek

  2. kaliumd1 says:

    Thanks for the great work you do. Much appreciated

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