For conservative dividend investors looking to make investments today, there are probably some internal deliberations about which stock to choose due to the valuations in the market at this time. In the current market, you have to choose between finding a “margin of safety” either in the underlying business models or finding your margin of safety in the “price” of a stock that may not have the best-in-breed dependable earnings quality that you desire.
First, let’s talk about “margin of safety” in terms of business model. When I make an investment with long-term intentions, I would ideally want to own the kinds of stocks with business models that are built to stand the test of time. That means companies like high-quality utilities, consumer staples, select large-cap healthcare companies, and certain conglomerates with limited exposure to the financial sector. Those are the ideal “core stocks” of a buy-and-hold dividend portfolio.
Although