Man, I love Dividend Growth Investing. Just the other day with my last FRIP Buy (Flexible Reinvestment Program) of Teva Pharmaceutical Industries Ltd (TEVA), made my entire holding of TEVA grow organically. What I mean by organically is that my portfolio dividend income built my TEVA holding from nothing. Normally when I make a buy like my last two buys of CVS and QCOM, I would buy about $1,200 worth of shares each time.
However, my portfolio and the dividend that came out of it bought $1,204.15 worth of shares of TEVA. That is 36 shares of TEVA that my portfolio bought organically. Want to hear the best part? The best part is now these 36 shares of TEVA will now start producing dividend every year as well. It will now produce $48.96 a year of extra income. As you just read, the snowball effect is in full effect right here.
Why am I buying TEVA?
Current PE: 282.82
Forward PE: 6.3
2016 EPS: $0.07
2017 Estimate EPS: $4.80
2018 Estimate EPS: $4.76
Dividend Payout: 28.3% (based on 2017 estimated EPS)
Currently, the Divided yield is at 4.55%. The 5-year average is 2.73%
S&P Capital IQ Fair Value: $39.10
Yahoo.com Price Target: $37.05
finbox.io Fair Value: $37.50
My DDM Analysis: $57.26
As you see above, TEVA is very much undervalued right now. I plan to add more at this level using FRIP to buy more shares.
Thanks for reading.
Do you like TEVA at these prices? What have you been buying with your divided money?
Image by Stuart Miles at FreeDigitalPhotos.net