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  • Looking For Margin Of Safety In Dividends [View article]
    Thanks for your comment. I have found the income statement to show a better picture on company's claim on resources for a given period than the statement of cash flows.
    Dec 21, 2011. 03:20 PM | 1 Like Like |Link to Comment
  • 4 Important Dates For Dividend Investors [View article]
    Yes, I meant 41 cents. When I first wrote this article, the dividend was 38 cents. I updated it right before publishing it.. But I guess I missed this detail.
    Nov 10, 2011. 08:25 AM | 2 Likes Like |Link to Comment
  • 10 Income Stocks Confident In Their Growth Prospects [View article]
    Total Returns
    Oct 24, 2011. 09:39 PM | 1 Like Like |Link to Comment
  • The Temptation To Chase Past Performance [View article]
    I think this is good article. I disagree on certain aspects, mostly comparing the grossly overvalued tech stocks from the 1990's to the current valuation of MLPs. DCF is a useful tool for valuing MLPs, just like FFO is useful for valuing REITs. The mere fact that you suggest using P/E ratios for valuing flow-through entities however, make your claims of having experience in the oil and gas industry highly suspect in my book. Even if you look at P/E's several MLPs for which I looked at P/Es are not that expensive.

    Anyway, if DCF was not useful, then how did all of these MLPs manage to keep distributions for 15 years? If DCF is not useful, what is the difference between pipeline useful lives for accounting purposes, versus useful lives for service/operational services?

    I find it funny when someone tells me that dividend stocks or mlp stocks are in a bubble.I was very actively involved in the dot-com bubble, and could tell you the analogy to income stocks is nonsensical. Just because there are a few articles written on dividend investing on the web, doesn't mean that "everyone" is doing it. If you bother to read WSJ, Y! Finance or Marketwatch, you would notice that very few articles have been written on dividend stocks, relative to other retirement strategies that emphasize working as long as possible or putting all of your money in annuities.

    I agree that MLPs are risky due to interest rates and the fact that they need to access the capital markets. Another risk which you failed to mention is the potential that the MLP structure is phased out. Taxing income at the entity level, and then at the shareholder level will result in lower dividends..
    Oct 22, 2011. 11:33 PM | 1 Like Like |Link to Comment
  • AT&T And Coca-Cola: More Expensive Than You Think [View article]
    Dave,

    What exactly did I miss?

    Did you even read the comment i made to Michael Connellan?
    Oct 13, 2011. 08:37 AM | 1 Like Like |Link to Comment
  • AT&T And Coca-Cola: More Expensive Than You Think [View article]
    Michael,

    Yes, but your 15.46 billion include the special items of 1.53/share, which times 5.938 bln shares come up to $9 bln.

    Cash from Operations includes "Net Income". Net income would have to decreased by the "special items" in order to have comparability. A similar event of such magnitude is very unlikely to repeat in the next few years.

    Now run the numbers - AT&T barely has enough cash to pay the dividend.

    Qualitatively, AT&T is also a company in a highly competitive industry, marked with rapid product obsolescence , low consumer quality, and a service which is basically a commodity and is similar between the majors - ATT, Verizon, Sprint and T-Mobile. Many consumers are looking after the "cool" phone, which several years ago ( in 2004 i believe) was the Razr, now it is the iPhone. Unfortunately, all major carriers have the iPhone now... In addition, it is very easy to switch carriers. So unfortunately, the high level competition, high capital requirements, low consumer loyalty show me that there is no wide moat...

    In addition, telecom companies MUST invest in Capex every year just so that they maintain their network. If you look at the numbers, AT&T spends for Capex roughly equivalent amounts to its Depreciation expense. The useful lives for network equipment for example is only a few years ( The number 4 yrs is somewhat imprinted in my memory per my previous telecom client).

    That is why telecom companies should be valued based upon earnings, not cash flows. Unlike REITs, where depreciation on a building doesn't really affect the real value of the building, and it is added as FFO, for telecom, depreciation erodes the capital asset base.

    I am not a buyer of telecom companies in general. However, everyone makes their own decisions.
    Oct 12, 2011. 11:26 PM | 2 Likes Like |Link to Comment
  • Best Dividend Stocks of 2011, Q3 Update [View article]
    Actually I have been running in this contest in 2009 and 2010 as well.

    In 2010, I outperformed S&P 500 by 11.50% :

    http://bit.ly/nSqOZO

    In 2009 the returns matched the return of S&P 500:

    http://bit.ly/mPwTpD
    Oct 3, 2011. 08:32 PM | 1 Like Like |Link to Comment
  • Dividend Income Plans' Major Flaw [View article]
    Ron,

    What happened in 2008 with stocks that cut dividends, and ETF's holding overweight positions in them, since they were "accidental; high yielders"?

    Here's what happened:

    http://bit.ly/pSYLCw

    Enjoy!
    Oct 2, 2011. 04:42 PM | 3 Likes Like |Link to Comment
  • Dividend Income Plans' Major Flaw [View article]
    David,

    I find it interesting that it is ok for a dividend ETF to hold on to stocks that have cut or eliminated dividends. Then this is used as a reason to avoid dividend stocks. What real, stay at home "dividend zealots" did in this situation was to sell at the cut, and then buy something else that produces income. The professional ETF investors however, who weighted the portfolio based off yield, simply kept the stocks. Why would they care - they are getting 0.50% of your money in fees no matter what.

    It is also interesting that most stocks that cut dividends in 2008 went under, whereas most stocks that cut dividends in 2009 doubled in price. On average, stocks that cut dividends should be sold any way I look at it.

    Here's another awesome article on dividend cuts for Ron Rowland:

    http://bit.ly/pSYLCw

    Enjoy!
    Oct 2, 2011. 04:39 PM | 2 Likes Like |Link to Comment
  • Dividend Income Plans' Major Flaw [View article]
    Dividend Stocks or Dividend ETF's?

    http://bit.ly/qeSYMh

    Enjoy!
    Oct 2, 2011. 11:00 AM | 3 Likes Like |Link to Comment
  • Eaton Vance: Dividend Stock Analysis [View article]
    This is a very high initial yield, which is guaranteed to weed out some of the best dividend stocks out there. Overall however, it is possible to have a portfolio yield close to your target percent, by mixing low yield/high div growth, with high yield/low div growth as well as stocks in the sweet spot:

    http://bit.ly/n9Y8NX

    Investors should invest based on a 30 year horizon, not because they NEED a high yield today. Even if you are 65-70, there is a chance one still has 30 years ahead of them. A high yielder today which doesn't grow distributions will deliver an income stream whose purchasing power declines over time. How much did a can of soda cost 30 years ago? How much does it cost today?
    Oct 2, 2011. 10:57 AM | 2 Likes Like |Link to Comment
  • 'Dividends' Have Become A National Anthem [View article]
    Dave,

    I also find it interesting how always the worst dividend stocks such as Eastman Kodak or the financials are always used, while the best non dividend stocks such as Berkshire or Apple are used against dividends.

    It also amuses me that "traders" fail to mention that with an active strategy a market participant can compound their losses really quickly and lose their capital.. Add in inexperience, low capital amounts, leverage and slippage - you got yourself a pretty poor edge against the "Wall Street computers" selling the stock to you.
    Oct 1, 2011. 06:24 PM | 5 Likes Like |Link to Comment
  • 'Dividends' Have Become A National Anthem [View article]
    It is none of my business, but if you are a trader, why write articles concerning buy and hold dividend investors?

    Why not write about the dangers of active trading? Did you know that 85%-90% of traders lose the equity in their accounts within one year?

    As far as EK - it would have stopped being attractive for dividend growth investors in 1981 when it froze its distributions. It would have been a clear "sell" since the company cut dividends in 2003. So was EK the "worst" example you could use to "frame" dividend investing as a risky strategy?

    It would have taken an investor in EK several decades to enjoy a stream of rising dividends. An active trader would have lost their account 20 times in 20 years...

    Capisce?
    Oct 1, 2011. 05:16 PM | 7 Likes Like |Link to Comment
  • 'Dividends' Have Become A National Anthem [View article]
    Actually studies have shown that 85%-90% of "traders" lose almost everything within one year of commencing trading.
    Oct 1, 2011. 05:09 PM | 1 Like Like |Link to Comment
  • 'Dividends' Have Become A National Anthem [View article]
    Carlos,

    I choose to purchase companies with wide moats, strong brands, and the ability to increase earnings over time. These companies happen to pay dividends to shareholders, and have a culture of raising these dividend every year. The companies I buy have been around for decades, and will be around for decades after I am gone.

    Now if you want to be a contrarian to my strategy - go for it. But when your growth stocks plummet because their growth dissipates your net worth will suffer. And if you decide to go short of my dividend stocks, then you will essentially be paying ME a higher dividend while my stocks appreciate over time. ( you will probably also have to pay margin to your broker).

    Any takers?
    Oct 1, 2011. 01:25 PM | 6 Likes Like |Link to Comment
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