Investing Experts Value + quality + cash flow is king
Mar 12, 2026
Scott Kaufman, founder of The Dividend Kings and dividend-growth analyst, explains the market rotation into value. He discusses selling overpriced quality names, why cash flow matters, and the software sell-off. He highlights low break-even energy picks, private credit pressures, and comparing bonds versus preferreds.
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Value Rotation Has Overextended Valuations
- The market has rotated from growth to value, pushing value PE ratios up near former growth levels.
- Scott Kaufman notes this overextension means investors must be pickier and ready to exit overbought positions.
Sell When Short Term Return Outlook Is Negative
- Exit holdings when your 12- and 24-month total return outlook is negative.
- Scott Kaufman says they sold positions (e.g., Enbridge) if projected returns to 2026 were negative to avoid holding overpriced quality names.
Enbridge Example Of Quality Becoming Overpriced
- Enbridge is a high-quality company that Scott Kaufman publicly recommended selling because it became overpriced.
- He calculated a negative total return to end of 2026, so they exited rather than risk losses.