Donaldson Capital Management Webcast - Dividend Valuation Model: Greg Donaldson explains the firm’s proprietary Dividend Valuation Model using Procter and Gamble as an example.

Summary:

Earnings continue to surprise to the upside and perhaps even better news: revenues have also now started to grow at a faster rate than expected.

Greg Donaldson of Donaldson Capital Management speaks in an audio blog on the earnings results for the first week of the second quarter 2010.

DCM's Investment Policy Committee continued to examine the data in our meeting this week to try to determine whether we are experiencing a normal stock market correction, or a market that is signalling that something has gone wrong with the consensus view of the economy and corporate earnings.

In recent weeks, the stock market seems to have lost it moorings and found itself thrashing about in heavy seas. US stocks appear to be caught in gale-force fears of all sorts of impending disasters from runaway inflation to a double dip in the economy.

I am a soccer fan, therefore I am aglow with pride over the USA's victory over Algeria to win their group phase in the World Cup in South Africa.

My love for "football" came because both of my sons gave up playing my sports (baseball and basketball) when they were very young to concentrate on soccer. Since I love both of my sons, perhaps it was only natural that I would come to love the game they loved, even though for many years I did not understand the difference between a "corner kick" and a "free kick."

Dividends are alive and well and getting back to normal. At least that is what the data for the first six months of the year would indicate. The following is a brief update on the dividend actions or inaction's of the 500 companies in the Standard and Poors Index for calendar year 2010.

This information is based on announced dividend actions as reported by Bloomberg and is taken from Bloomberg Professional Data.

Anyway you look at it, the jobs report released Friday was flat ugly. Almost all the new jobs created were government census workers. Even though the unemployment rate ticked lower to 9.8%, the lack of new jobs in the private sector was an unpleasant surprise to economists and stock traders. Stocks fell sharply and bond prices rallied.

At our Investment Policy Committee meeting today our discussion focused mainly on three topics.
1) Is the risk discount built into current stock prices excessive?
2) How tightly is the US economy tied to Europe? and
3) How tied are the companies we invest in to either the US or European economies?