Dividend Aristocrats Handily Outperforming Main Indexes in 2008 [View article]
Great resource David! It's great to see that dividends are cushioning the losses for investors this year. To everyone else who believes that this is a short term phenomenon, please check this link out:
Currency ETFs: Consider the Commissions [View article]
Ray,
Thanks for your input. Commission free brokerages like Zecco and BAC are something I should have mentioned. Another problem however is that you are still paying 0.35%-.55% annually which would lead to you undeperforming the underlying over a 10, 20 year period. So if you really want to invest in currencies, wouldn't it be easier to just open a forex account?
My idea is to buy stocks which are growing their EPS and DPS nicely and are trading attractively for me. In addition I check for whether the DPR is above 50% or not in order to minimize the risk of dividend cuts. I don't think that BAC fits this criteria yet. I have a plan and I do not want to deviate from it in order to blindly speculate that BAC's stock price will go up. Sure, the stock is up over 50% off its mid july lows, but that doesn't mean it can't go back to teen's or even single digits. The high payout also shows that the dividend is at risk at least for now, untill annual EPS picks up steam next year. But where will future EPS growth come from?
If financials recover, then so be it I am ok missing the boat on BAC. But in the meantime I am allocating my assets towards other stocks which have shown some greater resilience to the bear market than BAC.
In my honest opinion, anyone that's purchasing financials right now is speculating. Years from now you have two possible extreme scenarios: 1) the crisis is over by now and BAC hits 70 by 2010 for example. The dividend was never cut but actually raised in 2009, which helped BAC stay a dividend aristocrat. Anyone who gambled and bought BAC now talks about how much greater than Buffett they are at finding value plays. 2) The financial crisis continues. CFC's acquisition turns out to be a bad bet, which almost costs BAC its independence. The dividend is cut by 50%, which still causes the stock to yield above average yields. The stock finally bottoms around single digits, at which point everyone is bearish and proclaims the end of the world. That's when the smart moeny will be buying..:-)
Of course there is a middle ground but let's stick with the extremes for now,should we?:-)
BTW i don't hold any BAC but I do hold some financials :-(. If you hold BAC i wouldn't sell. I would keep reinvesting my dividends and forget about it. Several decades down the road BAC would have turned out to be a wise investment..
The beauty of dividend paying stocks is that they allow you to compound your returns by getting money over fixed periods of time and then reinvesting them back. Dividends also give investors much more visibility than share buybacks.
By the way, AAPL used to pay dividends from 1987 untill 1995. After the company stopped paying dividends, the stock tanked from 31.87 at year end 1995 to 13.13 by the end of 1997.
The stock could bounce, but unless any major acquisitions are made or new drugs come throught PFe's pipeline, the longer term picture is bleak for PFE.
In my opinion the billions of dollars which PFE spent buying back stocks should have been spent acquiring other companies and new products. PFE has spent about 20 billion in total over the past 4-5 years buying back stock- if it had bought another company for 10-15 bln in cash and then bought back 5-10 bln in PFE's stock back, shareholders would have had a brighter future ahead.
They are a cash machine right now, but where will the cash come from after most of its current drugs start facing more generic competition?
Unfortunately the highest yielding stock lists these days contain stocks with a higher risk of cutting their payment. In this difficult environment, no one could tell you if any financial company will keep its dividend payment stable. Maybe that's why dividend investors need to be diversified across many sectors and not chase yield blindly. I really hope ACAS could keep paying its rich dividend. But as the stock goes lower it seems to me that raising capital through share offers will be pretty expensive in the future..
Attractively Valued International Dividend Stocks [View article]
Actually BLX didn't make the cut because of its erratic dividend history, it wasn't included in the Mergent's International Dividend Achievers list.
Dividend Analysis: Automatic Data Processing [View article]
I believe I hadn't looked into PAYX because it hasn't been raising its dividends for over 25 years like ADP has.
Dividend Aristocrats Handily Outperforming Main Indexes in 2008 [View article]
It's great to see that dividends are cushioning the losses for investors this year. To everyone else who believes that this is a short term phenomenon, please check this link out:
dividendgrowth.blogspo...
Currency ETFs: Consider the Commissions [View article]
Thanks for your input. Commission free brokerages like Zecco and BAC are something I should have mentioned.
Another problem however is that you are still paying 0.35%-.55% annually which would lead to you undeperforming the underlying over a 10, 20 year period. So if you really want to invest in currencies, wouldn't it be easier to just open a forex account?
Just my 2 cents
Bank of America: Dividend Analysis [View article]
My idea is to buy stocks which are growing their EPS and DPS nicely and are trading attractively for me. In addition I check for whether the DPR is above 50% or not in order to minimize the risk of dividend cuts.
I don't think that BAC fits this criteria yet. I have a plan and I do not want to deviate from it in order to blindly speculate that BAC's stock price will go up. Sure, the stock is up over 50% off its mid july lows, but that doesn't mean it can't go back to teen's or even single digits. The high payout also shows that the dividend is at risk at least for now, untill annual EPS picks up steam next year. But where will future EPS growth come from?
If financials recover, then so be it I am ok missing the boat on BAC. But in the meantime I am allocating my assets towards other stocks which have shown some greater resilience to the bear market than BAC.
The Long Case for Bank of America [View article]
1) the crisis is over by now and BAC hits 70 by 2010 for example. The dividend was never cut but actually raised in 2009, which helped BAC stay a dividend aristocrat.
Anyone who gambled and bought BAC now talks about how much greater than Buffett they are at finding value plays.
2) The financial crisis continues. CFC's acquisition turns out to be a bad bet, which almost costs BAC its independence. The dividend is cut by 50%, which still causes the stock to yield above average yields. The stock finally bottoms around single digits, at which point everyone is bearish and proclaims the end of the world. That's when the smart moeny will be buying..:-)
Of course there is a middle ground but let's stick with the extremes for now,should we?:-)
BTW i don't hold any BAC but I do hold some financials :-(. If you hold BAC i wouldn't sell. I would keep reinvesting my dividends and forget about it. Several decades down the road BAC would have turned out to be a wise investment..
Dividend Paying Stocks: Don't Discount Them Just Yet [View article]
dividendgrowth.blogspo...
The beauty of dividend paying stocks is that they allow you to compound your returns by getting money over fixed periods of time and then reinvesting them back. Dividends also give investors much more visibility than share buybacks.
By the way, AAPL used to pay dividends from 1987 untill 1995. After the company stopped paying dividends, the stock tanked from 31.87 at year end 1995 to 13.13 by the end of 1997.
Earnings Preview: Pfizer [View article]
dividendgrowth.blogspo...
The stock could bounce, but unless any major acquisitions are made or new drugs come throught PFe's pipeline, the longer term picture is bleak for PFE.
Earnings Preview: Yahoo [View article]
LEt's see if I am correct!
Realty Income: Solid Yield, Diversified Portfolio [View article]
www.tickerspy.com/go.p...
Later on however, I turned bullish and even bought some after reading 2007 and 2006 annual reports.
Be Wary Of High Dividend Yields [View article]
seekingalpha.com/artic...
Always do your homework first however.
Abbott: Too Overvalued to Make a Good Dividend Investment? [View article]
I also concluded that ABT is a little overvalued in my analysis previously:
seekingalpha.com/artic...
I believe that ABT is a long on dips below $46.
Exxon Mobil: An Unwise Investment For Now [View article]
www.tickerspy.com/go.p...
Pfizer Stock: Value Trap? [View article]
They are a cash machine right now, but where will the cash come from after most of its current drugs start facing more generic competition?
Dividend Yields Soar [View article]
I really hope ACAS could keep paying its rich dividend. But as the stock goes lower it seems to me that raising capital through share offers will be pretty expensive in the future..