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  • When to Sell Dividend Stocks [View article]
    The problem with a dividend cut is that the current yield looks exceptionally good, but it is the yield on cost that is cut. For BAC if you bought it at 50 your yield on cost dropped from just over 5% to 2.5%. Once a company cut its dividend once, what stops it from cutting again? Some stocks like KEY or Citi cut their payment twice. Others completely eliminated it. The investors who held the stock after the cut were HOPING that the worst is over. In investing, the worst thing you could do is to hope - you have to decide your pain point and sell and have a clear mind.

    As for BAC or Citi, i would much rather sell ( I never owned any) after a dividend cut and end up with something left, instead of hoping it will go up someday or that I should invest in something that should be generating a 10% current dividend yield just to maintain my dividend income.

    Now if BAC and Citi were to resume increasing their dividends and I believed that there is a strong fundamental ability in their business models to support such a move, I would gladly buy back as soon as the stocks are not too expensive. If the dividend increases could be supported from the business, then I should be ok in the long run.

    I don't consider selling when there is a doubt that a dividend will be cut, because I doubt that anyone can predict what will happen with above average certainty.

    Jan 6, 2009. 01:25 PM | 1 Like Like |Link to Comment
  • Four Stocks for 2009 [View article]
    Thanks for the link to the Best High Yield Stocks for 2009!
    Jan 2, 2009. 12:34 PM | Likes Like |Link to Comment
  • Best High Yield Dividend Stocks for 2009 [View article]

    I have never seen any stock that is not risky. The riskiest stock of the four is Realty Income. KMP and ED are pretty much utility like investments, while PM should do fine in a crisis, as smokers find it tough to quit and the tough life makes more people smoke.
    Dec 30, 2008. 03:21 PM | 1 Like Like |Link to Comment
  • 4 Major Corporations Increasing Dividends [View article]
    50% or less payout ratio, or if over not too over its 10 year average

    3% dividend yield

    At least 5% dividend growth

    Consecutive increases for 25 years in a row ( or 10 years but that would be a reduced position most probably)

    On Dec 23 08:51 AM BlueOkie wrote:

    > What is your entry criteria?
    Dec 23, 2008. 06:20 PM | 1 Like Like |Link to Comment
  • Dividend Paying Stocks: You Only Have to Be Lucky Once [View article]

    That's a great original and thought provoking article. Without dividends, stock markets do look like a giant ponzi scheme, where the greater foll theory is in full effect. With dividends and reinvestment however, stock market look like a sound investing practice for long-term wealth accumulation.
    Dec 22, 2008. 07:19 PM | Likes Like |Link to Comment
  • High Yields with REITs and Junk Bond Funds [View article]
    I am fine with having an exposure to REITs. Do not count on REITs paying you a 20% yield however - most of them pay out all of their earnings plus depreciation expense as dividends.. So in order to grow they keep selling stock and bonds.. In the current credit market freeze.. Bonds are tougher to sell. Then they could sell stock, yielding 20%, which sounds like a very high cost of capital..
    Dec 22, 2008. 07:17 PM | 1 Like Like |Link to Comment
  • The Dogs of the Dow Can Keep You Out of the Doghouse [View article]
    Didn't Dogs of the Dow significantly underperform major indexes by 20% in 2008?

    The only period for which Dogs of the Dow made any more money than a simple buy and hold index funds strategy, was when the DOD strategy was being backtested.
    Dec 11, 2008. 01:57 PM | Likes Like |Link to Comment
  • Why Would Anyone Buy T-Bills at 0%? [View article]
    I wonder if there are alternatives to large companies to open hundreds of CD's in hundreds of Banks instead of purchasing 0% yielding products..
    Dec 11, 2008. 01:53 PM | 1 Like Like |Link to Comment
  • Five Solid Dividend Companies [View article]
    That's a very good article D4L. I need to look into TEG, I have ED as an alternative.
    Dec 11, 2008. 01:48 PM | Likes Like |Link to Comment
  • Altria: One of the Best Run Companies [View article]
    I own MO as I like the company and its ability to increase dividends and buy back stock consistently. The current MO however is different than the Altria that Siegel discusses, as it doesn't include international operations. However If you also own PM you should do just fine ( I own that one too)

    The high payout for MO is a warning sign.. The thing however is that the tobacco industry is in a decline and there should be little in capital investment for the future. Furthermore the company doesn't have a lot of options to reinvest in its business other than acquisitons..
    Dec 10, 2008. 10:55 AM | Likes Like |Link to Comment
  • Playing the Auto Bailout With Yields as High as 45% [View article]
    The securities do yield a lot.. But buying them just because they yield so much is not a reason to enter a position. I view them more as a long-term investment. In the worst possible situation you will get equity in the "new" GM and "new" Ford, and this equity will have much more appreciation potential than the current one.
    Dec 10, 2008. 10:46 AM | 1 Like Like |Link to Comment
  • My Take on Year End Investing [View article]
    The funds definitely make it easy for you during tax time, as they report it in a 1099, as opposed to K1.
    Dec 9, 2008. 02:38 PM | 2 Likes Like |Link to Comment
  • My Take on Year End Investing [View article]
    If you are looking to purchase an MLP fund, check out TYY or TYG.
    Another thing to check is the annual management fee that will come out of your pocket every year..

    Dec 9, 2008. 12:15 PM | Likes Like |Link to Comment
  • Country Default Risk Rises Across the Board [View article]

    Argentina's bonds are pretty likely to default, so I wouldn't be surprised if someone paid 4400 in order to get $10,000 back.. I think that Argentine bonds trade well below par right now..
    Dec 4, 2008. 04:40 PM | Likes Like |Link to Comment
  • Star Bulk Carriers: Interesting Dividend Payout [View article]
    The problem is not with dividend payments - the problem is that companies didn't allocate their cashflows wisely in order to be more competitive compared to their competitors. What is the guarantee that a company that doesn't pay any dividends will allocate the funds wisely?

    How else are shareholders expected to earn some real cash from the companies they invest in? Sure, stock prices could rise and fall based off fundamentals, but there always is a disconnect between those. When a company shares a portion of its profits with shareholders, it proves that these profits are real, and not made by manipulating the books.
    In the corporate america of the 21st century the shareholder is the last one to get paid. Companies that cannot afford to pay dividends are always suspect. If they cut or suspend dividends they show you zero confidence in the short-term ability to compete in the markets. If management doesn't think that the company will earn enough cash to support the dividend it has been paying for some time, then why should you hold the stock?

    Google never paid a dividend, yet they had the funds to pay millions for a space challenge.. That's a missapropriation of shareholders money if you ask me!

    Dec 3, 2008. 03:59 PM | 2 Likes Like |Link to Comment