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For some of you, I am a known commodity. I use numbers to generate my own CAGRs and RRRs that has a decent trend in finding stocks that outperform using the "Yield + CAGR - RRR" formula. What I do for MLPs (energy Master Limited Partnerships) I also do with Health Care stocks.

In this two-part article, I will show the year to date data along with the EPS history and P/E ratios. I will show total returns since 2010 for this coverage universe. I will provide numbers that justify the current valuations. In part two, I will spend a lot of time and text setting five-year forward dividend CAGR (Compound Annual Growth Rate) projections. My risk assessments will come in the form of setting RRRs (Required Rates of Return) that are strongly based on current debt credit ratings, debt to market capitalization ratios and historical earnings projection accuracy. I will then provide a ten stock buy list on this 32 component universe based on the "yield + CAGR - RRR" formula.

Sneak peak at the current buy list - ABBV, ABC, ABT, AMGN, BMY, CAH, GILD, NVO, NVS and RHHBY

CAGR = conservative dividend Compound Annual Growth Rate projections that are in alignment with dividend growth inertia, EPS current and forward growth and the dividend/EPS ratio. The quality of your CAGR matters. I have a record of making better than average CAGRs.

RRR = Required Rate of Return - or a risk assessment that is based on credit ratings, credit metrics, current earnings projection spreads and historical earnings projection accuracy. It is also a needed number to generate the price implied CAGR.
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