When looking at companies such as British American Tobacco (LSE: BATS),GlaxoSmithKline (LSE: GSK), SSE (LSE: SSE) and Diageo (LSE: DGE), the market is looking at the incoming stream, but placing insufficient value on its dependability.
Better still, the market tends to mis-price such companies, seeing them as dull dividend machines, when it should be valuing them as dull, safe dividend machines.
Better still, the market tends to mis-price such companies, seeing them as dull dividend machines, when it should be valuing them as dull, safe dividend machines.
Sage perspective
Warren Buffett, of course, is another investor with an eye for such businesses. If his well-known "economic moat" isn't another way of saying "businesses with high long-run sustainable profitability" then I don't know what is.
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