Seeking Alpha
View as an RSS Feed

Chowder  

View Chowder's Comments BY TICKER:
ABT, AFL, APD, ARCP, ARLP, AT, BDT, BF.B, BMO, BP, BRK.A, BRK.B, C, CBRL, CINF, CL, COP, CTL, CVX, D, DE, DIA, DRI, ED, ENB, EPD, EXC, FSP, FTR, GD, GE, GILD, GIS, GPC, HCBK, HCN, HGIC, IBM, INTC, JNJ, KMB, KMI, KMP, KO, KRFT, LEG, LINE, LNCO, LO, MAA, MCD, MDLZ, MDT, MHR, MKC, MMM, MMP, MO, NFLX, NHI, NLY, NNN, O, OHI, PBI, PEP, PG, PM, PNY, PSX, RIG, RY, SBSI, SDRL, SDY, SNY, SO, SPY, SYY, T, TE, TGT, TIP, TOT, TUP, UHT, UNP, UNS, UTX, VIG, VVC, VZ, WAG, WEC, WM, WMT, WU, XLU, XOM
Latest  |  Highest rated
  • The Real Deal On REITs And Rates [View article]
    Georgiaboy, I was willing to spend less than 35 cents per day (under $10 per month) to have access to S&P Capital IQ's data stream where all of this data is provided to me at the speed of a keystroke.

    I get this information through my subscription to F.A.S.T. Graphs.

    http://bit.ly/t3XFTe
    Nov 28, 2013. 01:10 PM | 2 Likes Like |Link to Comment
  • What's Your (Dividend Growth) Number? [View article]
    Word is that Wes Welker was allowed to go to Denver because Bill convinced him to be a spy. Welker passed along secrets about Peyton to our CB's who relayed the info to Bill.

    Note how Welker was missing in the passing game and it was his error that caused the ball to touch his own player, setting up the winning field goal for the Pats.

    Bill thinks of everything. In Bill we trust!
    Nov 27, 2013. 05:30 PM | 1 Like Like |Link to Comment
  • What's Your (Dividend Growth) Number? [View article]
    Mike, I suppose if push came to shove, the Missus would have put her foot down and I would have had to pay.

    I decided that anything earned would be appreciated more, and having earned that, I thought it would build their self-confidence.

    I understand why parents and especially grandparents want to help.

    BTW, New England - Denver. ... Any questions? ... Heh, heh, heh.
    Nov 27, 2013. 02:30 PM | 2 Likes Like |Link to Comment
  • Does Your Dividend Portfolio Have Room For A Wild Child? [View article]
    DE is a cyclical and being a cyclical, there are times when business isn't as flush as other times. So their cash flows are going to be all over the place.

    I don't "cookie cutter" financial criteria into every company because companies have different criteria on what they have to do with company profits.

    I used to be concerned about debt too, but no longer. There are companies out there that know how to use leverage. CLX and LMT are two that come to mind immediately.

    I decided I would let the credit agencies decide if the debt was a concern or not. I decided that if the company had a credit rating of BBB+ or better by S&P, I would ignore the debt.
    Nov 27, 2013. 02:11 PM | 1 Like Like |Link to Comment
  • Grandma's Money: Giving Her Portfolio A Charge [View article]
    Of your final list of 5 companies, I own 4 of them. PPL is the one I don't own.

    I recently added to SO and WEC.

    SO received their allowed ROE from the State of GA. They are allowed to earn 10.95% which is just under the 11.1% they were allowed previously.

    This is good news for SO. The ROE is good through 2016 and allows SO to make solid financial plans and allow for them to finish building the nuclear plants before the next review.

    In spite of all of the cost overruns that have been accrued by SO, this latest ROE approval shows how utility friendly the regulators are in the State of GA.

    If I may make one suggestion about selecting utilities, it would be this. Use the company's credit rating as your very first criteria in the stock selection process.

    These companies are limited to what they can earn. They must traverse the business cycle like any other company, and they have to fight the interest rate environment as well. The companies that are the most financially stable are the ones that survive and prosper over time.

    A company must have a credit rating of BBB+ or better by S&P for me to even research a company, unless I'm willing to speculate.

    SO has a rating of A- so it qualifies.
    Nov 27, 2013. 01:59 PM | 3 Likes Like |Link to Comment
  • What's Your (Dividend Growth) Number? [View article]
    Speaking of college funds, I told both of my kids when they were young that I wasn't going to pay a nickel towards their college education. I told them if they were smart enough to go to college, they were smart enough to find a way to get someone else to pay for it.

    They knew I was serious too!

    Both of them found a way to use other people's money and they incurred no debt along the way. ... Mission accomplished.
    Nov 27, 2013. 09:34 AM | 2 Likes Like |Link to Comment
  • Icahn's Activism Prompts Transocean To Raise Dividend, But There Are Other Contract Drillers In The Sea [View article]
    >>> That he wants big payouts now because there is a good chance there won't be any later. <<<

    Isn't that the nature of the oil business? Boom or bust?

    JF is doing what he knows best. He's working with his strengths. He's taken the tanker approach to building rigs. JF could never run a PG for example. ... Ha!

    I can't speak for others, but I bought SDRL simply as a speculation play. This isn't a long term hold for me. As long as JF wants to run the scheme, I'll play into the scheme. It should, or I at least hope, it will last a couple of more years.

    My best friend loves to buy and sell businesses. As soon as he gets it going, rather than keep it and build it up, he sells it and moves on to the next business. He told me that to him, it's the challenge of getting it going, not the challenge of keeping it going, that motivates him. I see JF in this same situation getting the big pay out while it's hot.
    Nov 26, 2013. 10:05 PM | 1 Like Like |Link to Comment
  • Realty Income May Be Old School, But The Dividends Are Really Cool [View article]
    His question is easy to answer. Nothing in life is risk free including stuffing his cash under a mattress or the means of transportation he expects to use to get to Colombia.

    The company is investment grade and has long term leases locked in place. It's up to preakness to determine if that's good enough to keep the company in business over the next decade.
    Nov 26, 2013. 04:44 PM | 5 Likes Like |Link to Comment
  • Realty Income May Be Old School, But The Dividends Are Really Cool [View article]
    >>> is dead money along with the REIT sector. <<<

    I think you have to consider what the goals are of the investor before you can call something dead money.

    Brad clearly stated that it's the income derived from the dividend that is his main objective. O's dividend is about as safe as it can be, and he said he wants that safe income. He's getting a 5.6% yield for safety. That's not dead money. That's in the bank money and you can bank that more of it will paid out in the next quarter and the next and the next.

    Now, if your focus is share price, then you have a legitimate concern.

    What we have here are forces between growth and income. You are thinking growth. Brad is thinking income. Opinions have to vary because the goals are different.

    If one is looking for income, now is a good time to buy. I'm looking for income, I added to my position.

    If one is looking to O for growth, there are better options.
    Nov 26, 2013. 12:43 PM | 8 Likes Like |Link to Comment
  • Realty Income May Be Old School, But The Dividends Are Really Cool [View article]
    Buffalo, I'm not sure you know how to analyze REIT's if you are using a 200% payout ratio in your analysis.

    Earnings are not the appropriate criteria for determining the safety of the dividend.
    Nov 26, 2013. 12:37 PM | 2 Likes Like |Link to Comment
  • Retirees: What Is The Best Choice For A Small Income Portfolio? - Part 2 [View article]
    I already closed out Project $3 Million's dividend growth rates since all companies have reported for the year and raised the dividend.

    The dividend growth rate averaged 8.3% per position. The income growth will be more than that due to a few positions being added to during the year and all dividends were reinvested.

    The average yield for all positions is 3.7%. When you add the yield to the dividend growth, you get a 12% total dividend return. The exact number the Chowder Rule seeks!

    Here's how they stand for 2013.

    Dividend Growth Rates:

    O -- 20.1%
    LMT -- 15.7%
    GIS -- 15.2%
    MMP -- 14.9%
    KMI -- 13.9%
    CVX -- 11.1%
    PM -- 10.6%
    ADP -- 10.3%

    KO -- 9.8%
    CL -- 9.7%
    KMB -- 9.5%
    MO -- 9.1%
    JNJ -- 8.2%
    KMP -- 7.1%
    PG -- 7.0%
    D -- 6.6%
    EPD -- 6.2%
    PEP -- 5.6%
    MCD -- 5.2%
    KRFT -- 5.0%

    DEO -- 4.4%
    SYY -- 3.6%
    SO -- 3.6%
    HCN -- 3.4%
    VZ -- 2.9%
    Nov 26, 2013. 12:28 PM | 4 Likes Like |Link to Comment
  • Realty Income May Be Old School, But The Dividends Are Really Cool [View article]
    It's funny how price is coming down for O yet Value Line just raised their Financial Strength Rating to A. Morningstar just raised fair value to $44 and now calls O a 4-Star consider buying.

    Of course if one can get a better price, that would be better.

    In my case I don't play the price game anymore. I've experienced too many times over the years where my stubbornness about price caused me to miss out on owning some excellent companies.

    I look at a company and if it meets my criteria (fundamentally) for purchase, I purchase it. It doesn't matter to me if price keeps declining. Everything I purchased in 2009 kept declining after I bought it, but I continued to focus on the quality of the company and whether I paid a fair price for it. That decision has worked out well.

    O is worth more today than it was over a year ago. The acquisitions they have made have raised the quality of their tenants and improved their balance sheet. What more could you expect from a REIT? It's why Value Line has upgraded them and why M* has raised fair value.

    I added to my position in O within the last two weeks. This caused my cost basis to rise to $34.44. What is important to me, when I average up (for lack of a better term), is that I need for the raised cost basis to provide at least a 15% discount to fair value in order to provide me with a margin of safety. With the additional shares I recently purchased, and the cost basis rising, I still own O at a 27.7% discount to fair value. ... Sweet!

    I am reinvesting the dividends and that makes it even sweeter, regardless of which way price moves.

    My primary objective with O is the safety of the dividend. Any company that advertises itself as The Monthly Dividend Company is going to do everything within their power to see that the dividend is safe. That alone is worth a small premium in my opinion. Therefore, I had no problem adding to O in spite of the price falling of late.
    Nov 26, 2013. 10:10 AM | 13 Likes Like |Link to Comment
  • Icahn's Activism Prompts Transocean To Raise Dividend, But There Are Other Contract Drillers In The Sea [View article]
    elvis, you've been on a crusade ... Ha! ... and I don't wish to beat a dead horse, but if I may, I'd like to go back to your very first statement, which started the crusade on this and in other comment streams.

    >>> The "unique business model" is to spend all their money on new rigs then go to the bank, borrow a pile of money, and hand it out to shareholders. If this isn't a case of borrowing to pay dividends then one wonders when such a thing ever happens. Every dollar of dividends you collect is a dollar extra of debt your stock is carrying. <<<

    Yes, you are correct. SDRL has been what most people could reasonably consider to be recklessly aggressive.

    SDRL isn't interested in paying off debt. They are interested in using a lot of leverage to bet that their vision will pay off big-time as we move forward. They saw the opportunity where high tech rigs would play an important role in our future and they wanted to get a jump start on garnering that market. Hence, the huge amount of leverage and number of drill ships they wanted to build.

    Due to this aggressive strategy, they have to pay share owners to take that risk with them. SDRL isn't your orphan and widow company. It's high risk. It's currently high payout. I think one needs to keep it in perspective and not go crazy with it because if it does go bad, it'll go very bad.

    SDRL generally uses debt to build the rigs rather than cash flow, and then they use leaseback agreements to generate cash immediately. SDRL then uses that cash to pay dividends, make acquisitions or invests in debt or equity instruments. So far it seems to be working.

    The debt is secured by its rigs. The risk here is that if day rates decline, the company is exposed to liquidity issues and this may cause them to start selling off assets.

    So, I guess if one monitors the day rates, that might provide a clue as to when we should start locking in profits.

    SDRL wasn't designed to use cash flows to build their drill ships. It wasn't designed to immediately get a handle of their debt. SDRL was designed to use leverage, lots of it, with the idea that their vision will pay off handsomely down the road. It's "all in" from their perspective and anyone wishing to own SDRL must be comfortable with that strategy.

    Are there safer plays in the drilling market? Oh yeah babee, but this one isn't it. ... Ha!
    Nov 26, 2013. 08:10 AM | 5 Likes Like |Link to Comment
  • Retirees: What Is The Best Choice For A Small Income Portfolio? - Part 2 [View article]
    The foreign tax applies to BMO in taxable accounts. The foreign tax is not applied to BMO in tax deferred accounts.

    I know this from personal experience.

    The only Canadian companies I am aware of, that tax you in tax deferred accounts, are Canadian REIT's.
    Nov 26, 2013. 07:42 AM | 1 Like Like |Link to Comment
  • Realty Income - Scared Money Never Wins [View article]
    >>> a large portion of my monthly Roth IRA contribution comes from whats left over of my non-taxed BAH/BAS (shhh...don't tell the IRS). <<<

    Ha! Ha! ... I can't think of a better way of using "other people's money," what I refer to as the secret to success.
    Nov 25, 2013. 08:35 PM | Likes Like |Link to Comment
COMMENTS STATS
9,348 Comments
34,651 Likes