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3. Hi, My name is Aaron and I‘m with
Dividend Stocks Research, today were
reviewing our recently published article…

4. The Best Dividend Stocks Now On Sale

5. Looking for a deal?
Want to check out the best dividend
stocks on sale right now?

6. I worked for a guy years ago who
hammered home a terrific piece of advice.
“Never pay retail.”

7. Pretty good advice boiled down to just 3
words. And it’s especially good advice for
a smart dividend investor.
It gets you thinking about what you’re
actually paying for...how much you should
pay, and if there’s a better deal someplace
else.

8. In the world of dividend investing, there’s
no need to pay retail. Just look at a
couple of numbers and you can find the
top paying dividend stocks.
Here’s how to know if the price tag you
see means you’re picking up a bargain...

9. Best Dividend Stocks Price Tag #1

10. What is retail? What’s a normal, everyday
price for a stock? How do you know
you’re paying a fair price?
Here’s one way of looking at it.

11. The price of the stock is set by the
market, and only by the market.
Apple $AAPL CEO Tim Cook doesn’t wake
up in the morning and say the stock will
open trading at $125.

12. The market makes this decision. But
here’s something that only a handful of
people understand.
When it comes to setting prices, the
market is basically flakey. It is irrational,
even manic-depressive.

13. This fact is tough to accept. We like to
think that when billions of dollars are at
stake, stock prices are based on
something solid.
That’s not always the case.

14. And the investor who was Warren Buffet’s
#1 teacher knew this strange fact all too
well. He understood that stock prices are
irrational.

15. His name was Benjamin Graham. Here’s
something Graham said that shows how
obsessed he was about buying stocks on
sale...

16. If you are shopping for common stocks,
choose them the way you would buy
groceries, not the way you would buy
perfume.

17. Graham said something else about stock
prices. He told us there is only one thing
the ups and downs really mean...

18. Basically, price fluctuations have only one
significant meaning for the true investor.
They provide him with an opportunity to
buy wisely when prices fall sharply
and to sell wisely when they advance a
great deal.

19. This is why you can always find a good
dividend stock on sale.
The moods of the market can take a good
stock and send its price plunging for no
good reason.

20. It’s like going to a clearance rack and
seeing a coat marked 20% off. It’s the
same coat that cost $100 yesterday...
today, you can get it for $80.

21. Best Dividend Stocks Price Tag #2

22. How do you find these “On Sale”
pricetags?
Start off by knowing the real retail price.
A good way to measure this is with the
Price- Earnings Ratio. (P/E Ratio). Along
with yield, it’s a terrific way to see how
dividend stocks are performing.

23. It’s a simple number, and Warren Buffet’s
teacher, Benjamin Graham, drilled it into
him as a great way to size up the price of
a stock.
The P/E ratio is how much you pay for a
dollar of a company's earnings.

24. If the company earns $4 a share and the
stock sells for $40, the P/E ratio is 10, the
$40 stock price dived by the $2 earnings.

25. But don’t worry about doing the math.
When you look at your favorite finance
site and get a detailed quote for a stock,
you’ll see the P/E ratio.

26. Most of the time, the lower the P/E ratio,
the better the deal you’re getting, because
you’re paying less for earnings.

27. After you’ve done some poking around,
you’ll discover that different kinds of
stocks have different P/E ratios.

28. Here’s an example.
For instance, a stock in an industry sector
where not much growth is expected will
have a lower P/E than a stock in an
industry where there are prospects for
strong growth.

29. This moves in cycles.
The market goes through a stretch where
everybody loves bank stocks. Then, for
whatever reason, banking falls out of
favor. Another industry that wasn’t
considered attractive suddenly looks
more attractive.

30. It happens all the time. Yesterday’s bum
is tomorrow’s hero.
A good way to see how a certain industry
is priced is to check out the P/E ratio for
an ETF that tracks the sector. Then you
can drill into some of the stocks in the
sector.

31. The Technology Select Sector SPDR ETF
$XLK has a P/E ratio of 18.
Apple $AAPL has a P/E ratio of 17.05. The
Oracle $ORCL P/E is 18.55. You pay retail
for each stock.

32. You pay a premium for Google $GOOG
with a P/E at 26.69.
But IBM $IBM has a P/E of 13.69. It’s a
tech dividend stock on sale.

33. Best Dividend Stocks Price Tag #3

34. Make sure the sector you’re looking at
isn’t priced too high compared to the
overall market.
We’ve seen from the ETF that the
technology sector P/E ratio is 18.

35. That P/E mirrors the overall market.
Check out the SPDR S&P 500 ETF
$SPYand you’ll see the P/E ratio for the
S&P 500 is 19.
Tech is a little cheaper, but not by much.

36. Consumer staples... a little more
expensive. The Vanguard Consumer
Staples ETF $VDC has a P/E ratio of 20.

38. More Ways To Use The P/E Ratio to Find
The Best Dividend Stocks

39. Here are a couple of other things to keep
in mind about the P/E Ratio.

40. Just because it’s climbing higher doesn’t
mean you’re taking on more risk. If your
company makes more money this quarter
than it did last quarter, and the number of
shares available is the same, the P/E will
go up.

41. Not a bad thing. We obviously want
profits to rise. But if there’s a sharp and
sudden spike in profits, it’s good to know
why.
Also...

42. If there is a stock buyback program, and
the number of shares available goes
down, the P/E ratio will go up.

43. And there’s a history lesson to keep in
mind. Dividend stocks usually have lower
P/E ratios than stocks that don’t pay
dividends.

44. Knowing your history, and knowing how
the P/E ratios compare for different types
of businesses, can keep you out of
trouble.
It’s a great way to make sure you don’t get
caught in this tricky dividend trap.

45. Now You Know How to Shop For Dividend
Stocks At The Sale Rack

46. Just like Warren Buffet’s mentor,
Benjamin Graham, you can blow off retail
pricing.
You can use the P/E ratio to zero in on
bargains, and find the best stocks that
pay dividends.

47. Why take risks when you don’t have to?
And why pay retail?
Go check out the sale racks before they
get too crowded and prices go up.

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