Yield Channel Charts: A Tool For Dividend Growth Investors

This article presents a tool for dividend growth investors (DGIs) called Yield Channel Charts. These charts provide a way to assess market valuation relative to a stock's historical yield patterns.

Yield channel charts are suitable for high-quality dividend growth stocks with long histories of paying higher dividends every year.

Yield channels can be seen as safety zones for stock prices. As long as the stock price remains within the yield channel, the stock can be considered fairly valued. Once the stock price moves outside the yield channel, the stock is either overvalued or undervalued relative to historical yields.

Specifically, if the stock price moves outside the yield channel to the upside, the stock is overvalued and the yield is low relative to historical yields. Conversely, when a stock price moves outside the yield channel to the downside, the stock is undervalued and the yield is low relative to historical yields.

To read more about yield channel charts and why I think they're great for dividend growth investors, please read this article at Seeking Alpha.

---

Thanks for reading! Feel free to leave comments on this article either at Seeking Alpha or here, on my blog. I'll do my best to respond to each comment as quickly as possible.