Take two S&P/ASX 200 Index (ASX: XJO) shares.
One might have recently shot upwards, and the other may be on a losing run.
But both stocks can be a buy with equal merit and conviction.
That's because shares have no memory. What's happened in the past means absolutely nothing. The only thing that matters is the future prospects.
This is why you keep hearing the investment disclaimer "past performance is no indicator of the future". It is actually true.
Here is a pair of ASX 200 dividend shares the QVE team rates as buys, which are perfect examples of why investors need to be forward-looking:
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'Delivering ahead of expectations'
The Ampol Ltd (ASX: ALD) share price has soared 11.5% since a 10 July trough, all while handing out a massive 8.4% fully franked dividend yield.
In a memo to clients, QVE analysts attributed this gain to "solid second quarter performance across its non-refining businesses".
"Fuel volumes remain strong across both retail and wholesale while margins are expanding, reflecting an improved industry structure."
Ampol's Kiwi petrol distributor Z Energy is "delivering ahead of expectations", the QVE team added.
"We see further upside in convenience retail as Ampol refines its strategy."
And that's why, despite the recent gains, Ampol is set for further gains.
"We believe Ampol is undervalued given its hard-to-replicate fuel distribution footprint, with a healthy balance sheet also providing flexibility."
The majority of QVE's peers are in agreement.
According to CMC Markets, a whopping 10 out of 11 analysts currently rate Ampol as a buy.
Ampol will release its annual results on Monday 21 August.
Higher inflation could actually grow earnings
Freight rail company Aurizon Holdings Ltd (ASX: AZJ) has been going the opposite direction to Ampol, with its share price dropping 7% since a 17 July peak.
The QVE team blamed this on an investor day presentation that revealed financial year 2023 earnings would come in at the lower end of previous guidance.
And just like Ampol, the analysts are not letting this short-term stock price movement detract from its longer-term conviction.
"Aurizon also provided positive guidance for next year, forecasting earnings to grow by ~15% as coal volumes improve and earnings from its regulated network asset in Queensland increase, reflecting the impact of higher inflation on the regulated asset base."
Aurizon is due to deliver its full-year financials on Monday morning.
QVE analysts urged investors to pay attention to one particular growth driver.
"Of particular interest were the details Aurizon provided on its plans to grow the earnings of its bulk rail division by focusing on containerised freight volumes and increasing the utilisation of the recently acquired Tarcoola-toDarwin rail line."
Aurizon currently pays out a dividend yield of 4.8%.
