An Inflation-Beating, "Old School" Business

High Starting Yield, Solid Returns, Good Dividend Growth...

July 23, 2025

Value Line, Inc. ($VALU) is a little-known company that’s been in business for 94 years, consistently delivers double-digit annual returns, and provides services used by famous investors including Warren Buffett and Peter Lynch.

This is a stock most people have probably never heard of.

And on the surface, Value Line’s business model may look stodgy and outdated.

But, while the company is down significantly year-to-date, Value Line’s 10-year average annual total returns are still roughly in-line with the general market. And, the firm raised its dividend by an inflation-beating 8.3% back in April of this year.

In this special report, we’ll take a look at Value Line’s business fundamentals and investment potential.

Value Line, Inc. ($VALU)

Value Line, Inc. is a financial newsletter service. The company publishes market reports and stock write-ups through a variety of publications, including: The Value Line Investment Survey, The Value Line 600, Value Line Select: Dividend Income & Growth, and The Value Line Information You Should Know Wealth Newsletter

Value Line dates back to the Great Depression, with Arnold Bernhard founding the company in 1931. After seeing the devastating effects of the 1929 market crash, Bernhard set out to develop a new system for analyzing and evaluating stocks.

Bernhard created Value Line, which was the old school gold standard for market research.

Warren Buffett, Charlie Munger, and Peter Lynch all subscribed to Value Line’s services and spoke positively about the firm.

Today, Value Line faces intense competition from other research services like Zacks Investment Research, Morningstar, Seeking Alpha, and even platforms like YouTube and Substack.

Which is why the stock’s long-term performance is surprising.

Value Line, Inc. is down -27.99% year-to-date. But, the company has delivered a 10-year average annual total return of 12.59%. Despite its horrible 2025 performance, Value Line is only slightly lagging the S&P 500.

The company also has very little debt, with roughly $3.9 million borrowed against $75.8 million cash.

Value Line has an inflation-beating 5-year compound annual dividend growth rate of 8.63%. The firm’s starting yield of 3.35% is fairly high compared to the general market. And, the company maintains a payout ratio of 57.01%, meaning the dividend is safe and there’s plenty of room for future raises.

Lastly, Value Line’s price to earnings ratio of 16.53 makes the company relatively inexpensive.

  • Forward PE ratio of 16.53

  • 3.35% starting dividend yield

  • 5-year dividend CAGR of 8.63%

  • Payout ratio of 57.01%

  • 10-year stock performance 12.59%

Although Value Line is a NASDAQ-listed stock, the company gets very little investor attention. On Seeking Alpha, there are only 1,050 investors following this stock. And there aren’t that many write-ups about this company.

Value Line could be a good investment, but the stock market research niche is extremely competitive.

And while Value Line has strong fundamentals, there are other beaten-down stocks with comparable metrics and more predictable business models.

Water utility company H2O America ($HTO), for example, trades at a price to earnings ratio of 17.06 while offering a 3.31% starting dividend yield and payout ratio of 54.36%.

This may be a personal choice, but if I had to pick between buying a financial newsletter provider and buying a company that provides homes with water, I’d choose the water utility because it operates in a stable and predictable niche.

Value Line, Inc. offers a reasonably high starting yield, good long-term returns, and inflation-beating dividend growth. It’s also a stock that’s down significantly year-to-date and gets virtually no investment coverage.

That said, market research is a competitive field. And Value Line’s current dividend metrics are roughly in-line with beaten-down utility firms like H2O America.

Personally, I’d pick a water provider utility stock over Value Line.

Still, Value Line is a well-established company with very little debt, good long-term returns, and a dividend growth rate that outpaces inflation.

This could be an interesting buy-and-hold investment with rebound potential.

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.