Value in 60 Seconds: Safest Dividend stocks - it's all about cash flow

12 Jul 2023 · 1 min

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1:05

David Trainer explains how to build a safe dividend portfolio. The key: pick stocks with strong underlying cash flows, not just high yields. Valuation matters less than whether the company actually makes money to pay those dividends.

Chapters

Let's look at the safest dividend yields. How should we be thinking about this portfolio? David, can you walk us through it?
With the safest dividends portfolio, what you're getting is someone going through and making sure that these dividend stocks actually have the underlying cash flows needed to pay dividends. Everything in our research is fortified by that approach. Does this company have the underlying cash flows to support its valuation? We like stocks whose valuations imply a meaningful profit decline. That's good risk-reward. At the end of the day, the most important thing for investing is to understand the underlying profitability of the business. If you don't understand that, then how do you understand valuation. There's really no substitute for doing your diligence.