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Dividend Dynasty

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  • My 2014 Investment Plan And Screening Method [View instapost]
    On August 7, in a major market pullback, I decided to increase the number of holdings in my portfolio. To do this, I needed to lower my credit rating parameter to include A rated companies and a select few BBB rated companies consistent with my strategy presented in the book "The Single Best Investment" by Lowell Miller.

    My portfolio now includes:

    AAA rated: JNJ, XOM

    AA rated: CL, CVX, GE, IBM, KO, MMM, PFE, PG, RDS.b, WMT


    BBB rated: CLX, GIS, K, KRFT, MO, SJM, VZ, WAG
    Note that most of the BBB rated companies are in the consumer staples segment where the increased leverage can be managed because of the stability of their products.

    The portfolio is not equal weighted. Triple and double over-weights include KO, GE, PG, GIS, KRFT, CLX, KMB, UL, XOM, RDS.b, CVX, EMR, LMT and MMM.

    This portfolio was presented for educational purposes only and may not be suitable for all investors. Please do you own due diligence.
    Aug 9 07:46 AM | Likes Like |Link to Comment
  • Retirement Strategy: Preparing For The Unknowns [View article]
    BG, forced early retirement is a big issue. A retirement survey shows only 4% of the population expects to retire by 55, but 20% of employees are retired by 55. Before 60, 9% expect to retire, but 35% become retired. Before 65, 27% expect to be retired, but 67% become retired. Check out the link above about early retirement plan vs. actual. Its eye opening.
    Aug 6 12:24 PM | 3 Likes Like |Link to Comment
  • Wisconsin Energy: Time To Buy The Dip In This Best-In-Class Utility? [View article]
    No mention of the acquisition of TEG? When a $10 billion company (NYSE:WEC) is acquiring a $5 billion company (NYSE:, I think any analysis should at least mention the deal.

    In my opinion, the TEG acquisition will be excellent for both TEG and WEC shareholders. The service territories are contiguous, adding much of the northeastern quarter of Wisconsin to the electric and gas territory in addition to gas in the Chicago area. As a TEG shareholder, I am pleased with the acquisition as I believe it will provide synergies and cost savings which will benefit shareholders of both companies.
    Aug 4 06:50 AM | 5 Likes Like |Link to Comment
  • 3 Core Dividend Growth Stocks For Retirement Income [View article]
    Go to morningstar's website. Click on the "Bonds" tab. Then inside the "Cororate Credit Ratings" box, click on "See All Ratings". Then click on any column heading to sort. I sort by the "Morningstar Credit Rating" column and pick stocks that are rated AA or above with yields above 3% and three year historic dividend growth rates of about 7% or above. The credit rating is my initial screen.
    Jul 30 01:12 PM | 1 Like Like |Link to Comment
  • Why It Can Be Self-Destructive To Compare Yourself To The S&P 500 [View article]
    Bookseller indeed! With well written articles and sound financial planning, many benefit from reading Tim's work and following his plan.

    If all MKEMAC got out of this article is "book seller", he would do well by reading Tim's book.

    Thanks for another great article Tim.
    Jul 30 08:42 AM | 5 Likes Like |Link to Comment
  • 3 Core Dividend Growth Stocks For Retirement Income [View article]
    Welcome back Todd! AAA and AA rated, good yields, good historical growth and reasonable expectations results in two of three in my portfolio. I like the way you think and look forward to more articles.
    Jul 29 02:37 PM | 1 Like Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    P, I don't disagree. But more bad things happen when you own a large number of lower quality companies. My 7 companies represent 12% of the S&P 500. If you own the top 15 companies in the S&P 500, you have 25% of the index. The largest 50 companies represent nearly 50% of the index. One can obtain broad diversification with relatively few companies.
    Jul 29 08:23 AM | 1 Like Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    George, I own a concentrated portfolio of seven stocks and one ETF. If you own the right stocks, you don't need more than a handful. The right stocks have pristine balance sheets with AAA or AA bond ratings and operate in steady markets. My concentrated portfolio includes AAA rated XOM and JNJ and AA rated PG, KO and GE. For added diversification, lets add A rated SO which I do not own. So there I have energy, health care, consumer defensive, beverage, industrial and utility diversification.

    The key to this concentrated portfolio is its credit rating because of the extremely low risk of default. AAA and AA rated companies have a 0.28% actual default rates over a five year period while BBB rated companies have a 2.48% rate. This makes BBB rated companies nearly nine times more likely to default! Therefore, my 6 stock portfolio listed above is equivalent to a 54 position portfolio of BBB rated companies. Here is a whole study that explains this math:

    I don't expect to change your mind as each investor needs to develop their own plan. I'm just offering the reasoning for my concentrated portfolio in contrast to your article which dissed the idea. I agree that a portfolio of lower rated companies with higher yields needs to hold more companies as you suggest.

    The bottom line is the lower the number of companies in your portfolio, the higher the quality should be.
    Jul 29 06:08 AM | 7 Likes Like |Link to Comment
  • Retirement Strategy: Is It Time To Dump Everything? [View article]
    The lowest dividend growth of PG for the past 20 years was a single year at 7%. It has averaged 11% over that time frame. The lowest dividend growth for KO for the past 20 years was 6% in two years. It has averaged 9.8% for the past 20 years. Both stocks buy back large percentages of their shares each year which will support dividend growth.

    PG at below P/E of 13? That happened exactly once in the past 20 years. Guess when, at the bottom in 2008. You are going to wait for 70 more years for another opportunity like that.

    Why are you commenting in this article if you are looking for 20% returns? You are definitely not trying to learn anything here that will meet your goals.
    Jul 28 09:20 PM | 5 Likes Like |Link to Comment
  • Retirement Strategy: Is It Time To Dump Everything? [View article]
    62..., I'm a buyer of stocks with bond ratings of AA or above, yields above 3% and historic growth rates of about 7%. This just happens to describe many of the BTDP stocks. At a minimum, I expect my purchases to grow their dividends (earnings) above the rate of inflation. I don't need to beat the market, chase high yield or seek high growth. Its very unlikely that buying GE, PG or KO at these levels will not exceed my "minimum" expectations and therefore cannot be a "mistake" for me. If one needs above a 3.3% yield and above inflation rate growth, buying these stocks might be a "mistake". If your expectations are for total returns above 10 or 11%, then buying these stocks is definitely a "mistake". It all comes down to one's goals and expectations.
    Jul 28 08:41 PM | 2 Likes Like |Link to Comment
  • Retirement Strategy: Is It Time To Dump Everything? [View article]
    Great article RS. I am buying this fear as I'm seeing value in some BTDP companies with yields near 3.3%. I backed up the truck on GE at $26 with a 3.4% yield. I backed up the truck today on PG at $79 with a 3.25% yield. I topped off my KO at $41 with a 3% yield, and will back up the truck at $38 with a 3.2% yield. Basically, if I can get my BTDP companies at yields above 3.2%, I'm backing up the truck. Since I always stay 100% invested, I needed to sell other stocks to do my buying. I sold out of TEG and reduced CVX and XOM. There's worse things in life than getting stuck with GE, PG and KO at a growing average yield of 3.3% during a correction.
    Jul 28 05:49 PM | 1 Like Like |Link to Comment
  • My 2014 Investment Plan And Screening Method [View instapost]
    Added to PG with 3.25% yield at $79 by taking some profits in XOM currently at a 2.6% yield. This overweights my PG and underweights my XOM due to the yield differentials.
    Jul 28 10:10 AM | Likes Like |Link to Comment
  • Coca-Cola And PepsiCo: Don't Let Short-Term Price Affect Your Long-Term Judgment [View article]
    Great point Eli. "don't allow short-term price movements affect your long-term investing judgments." I wouldn't sell my KO to buy more PEP based on this quarter, especially after the 7% relative market price difference since their earnings releases. I can live with KO's with 6% growth and 3% dividend yield.
    Jul 24 01:47 PM | 3 Likes Like |Link to Comment
  • Coca-Cola And PepsiCo: Don't Let Short-Term Price Affect Your Long-Term Judgment [View article]
    Quotes from earnings release: KO had 3% global volume growth with comparable currency neutral EPS increased 6%.

    Quotes from earnings release: PEP had core constant currency operating profit grew 6 percent and EPS grew 9 percent. PepsiCo Americas Beverages (PAB) organic revenue increased 1 percent in the quarter, reflecting slight organic volume gains and effective net pricing.

    From the above, KO won the beverage battle and PEP won the earnings war. But, I believe PEP did a much better job of positively "spinning" the quarter than KO. KO's conference call was dull, PEP's was optimistic. KO's had no presentation, PEP's presentation was awesome. Again, PEP won the "spin" but I don't see that much difference in the KO quarter versus what the market perceived.

    Since I used to be an investor relations "spinner", I think KO could have done a much better job spinning the 6% growth in the quarter and the stock would have held up better. In the short run, the spin is a voting machine and in the long run the results are the weighing machine.

    Just my opinion. I have equal weighted positions of KO and PEP.
    Jul 24 01:00 PM | 6 Likes Like |Link to Comment
  • Is Colgate Really Considered 'Expensive'? [View article]
    Most the brands displayed in your graphic belong to Kimberly Clark, not Colgate.
    Jul 23 06:34 AM | 2 Likes Like |Link to Comment