Abbott Laboratories: Quality Dividend Aristocrat For Long-Term Dividends [View article]
I stand by my analysis. We can agree to disagree on that. I recently added ABT to my portfolio, as I think that the sum of parts will do well. We cannot do an analysis of Abbvie or new abbott until the spin-off actually occurs. When it does, let's circle up again this time in 2013, ok ;-)
Why Am I Obsessed With Dividend Growth Stocks? [View article]
PDR,
Your comment is right on the money. I agree with you 100%, and typically reiterate the fact that without rising EPS, your growth in DPS is limited. I do link to a few articles that mention that though.
8 Income Stocks Bringing Joy To Their Investors [View article]
Hi smlaker,
These income stocks are bringing joy to the investors who purchased them at attractive valuations, since they all increased distributions. I am really confused about your comment, since several of the companies mentioned were cited as either attractively valued or that I am interested in researching them further before potentially including them in the portfolio. That is as close to "investable information" as you can get. I am not your advisor, so I can't really tell you what to buy or not. It is ultimately up to the individual to decide what to do.
The moral of the article is that investors can benefit from passive dividend income that is rising, but they need to do homework before buying anything.
I also think that a quarter of portfolio could be invested in fixed income. Not during your accumulation years, but try to have that allocation at or around your retirement date.
Ouch, I need to calculate better. I apologize for this.
On a lighter note, I think I was probably calculating using the dividend payment Altria will be paying by Sep 2013 of 47 cents/share.
Cig volumes keep declining, but the price hikes have more than offset declines, leading to higher profitability. 20% of US population smokes, which is not a small number of users. Yes it's down from like 40% which was 50 years ago, but the population is larger now than 50 years ago as well..
I apologize for the mix-up. That paragraph should actually read the following:
Investing $1000/month in a portfolio of dividend stocks yielding 3% today, which has a dividend growth of 12% per year, would generate over $26,300 in annual dividend income in 24 years. If dividends are reinvested, chances are that this investment would generate much more than $39,600 per year in 24 years. As a result, for every dollar that you save in your 20s and put in dividend stocks, you would generate one dollar in dividend income in your 50s or 60s.
Warren Buffett Sure Knows How To Plant A Tree [View article]
Hi Tim,
While I appreciate the article you are writing, and I find it very inspiring, I found a few items that might need some additional clarification. When you commented on the Bank of America warrants that Berkshire owns, you mentioned that if dividends are increased, Berkshire would earn $1 billion in annual distributions. The problem with this statement is that dividends are not paid to warrants or options.
If Berkshire were to purchase BAC stock outright, then yes, they could earn dividends from it. But they need to essentially spend money to buy 700 mln shares, which would cost approximately $5 billion. The 5 billion is already earning them 300 million in distributions. When the preferred stock is retired in 9 years, BRKA would stop receiving 300 million in annual dividends but would get 5 billion in cash. It can then use these proceeds to exercise BAC warrants. But, in order for them to replace the income from the preferred, they would need an annual dividend of at least 43 cents/share in 2021...
17 Cheap Dividend Aristocrats On Sale [View article]
At 62 years, you might have 20 more years of active living. With advancement in medicine and if you lived a reasonable lifestyle, I don't see a reason why you cannot even have a chance of living for 30 more years.
So if your investing horizon is 20 - 30 years, how do you think you should invest your money?
17 Cheap Dividend Aristocrats On Sale [View article]
Compounding,
Great question. I used Zecco for a very long time, since they had $0 trades until early 2011. Then I simply increased the size of new investments. I would say that individual investors should buy stocks in $1000 increments at a minimum. If you use Zecco, that's 4.95 or 0.50%. If you wait untill you accumulate $2000 before you purchase a stock, that decreases expense to 0.25%. Of course unlike an index mutual fund where they charge you 0.10% every year, unless you sell, you would never have to pay another dime. For dividend mutual funds and ETFs, they typically charge you 0.50%/year at the minimum..
Commissions are really low. In the late 1980s, early 1990s they have been pretty steep.
This is a very good article indeed. I often ask myself what to do when a DG stock I own goes up a lot. However, I typically keep holding onto that stock while re-investing the dividends in a stock that is attractively valued at the moment.
In my research of dividend growth stocks, I have uncovered that many have stayed "overvalued" for DECADES. For these lucky investors who were able to purchase them at attractive valuations, that meant that the stocks they owned were overvalued for long periods of time. However, it is typically those companies that generate strong total returns.
I do agree that utilities have gone a little bit ahead of themselves. I purchased ED when its yield was close to 6%.. A few days ago it was below 4%... My yield on cost is close to 6%. If I sell a utility, I would reduce exposure to the sector. I would also have to worry about what to re-invest the money in.. Most utilities are overvalued, similar to ED..
So .. my decision is to keep it for the time being.. I haven't put any money at ED since 2010...
Technically however, using Standard & Poor's classifications, Wal-Mart, Walgreen's are Consumer Staples, while Lowe's, Family Dollar and Target are examples of Consumer Discretionary stocks.
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.
Abbott Laboratories: Quality Dividend Aristocrat For Long-Term Dividends [View article]
Abbott Laboratories: Quality Dividend Aristocrat For Long-Term Dividends [View article]
New Abbott will pay 14 cents/quarter, equivalent to 56 cents/year.
AbbVie will likely pay 40 cents/quarter, equivalent to 160 cents/year.
For shareholders of "old" Abbott, which combined New Abbott and Abbvie, the quarterly distribution will be (14+40)=54 cents/share.
Abbott Laboratories: Quality Dividend Aristocrat For Long-Term Dividends [View article]
Why Am I Obsessed With Dividend Growth Stocks? [View article]
Your comment is right on the money. I agree with you 100%, and typically reiterate the fact that without rising EPS, your growth in DPS is limited. I do link to a few articles that mention that though.
Best Regards,
DGI
8 Income Stocks Bringing Joy To Their Investors [View article]
These income stocks are bringing joy to the investors who purchased them at attractive valuations, since they all increased distributions. I am really confused about your comment, since several of the companies mentioned were cited as either attractively valued or that I am interested in researching them further before potentially including them in the portfolio. That is as close to "investable information" as you can get. I am not your advisor, so I can't really tell you what to buy or not. It is ultimately up to the individual to decide what to do.
The moral of the article is that investors can benefit from passive dividend income that is rising, but they need to do homework before buying anything.
Dividend Investors Are Getting Paid To Hold These Dividend Stocks [View article]
http://bit.ly/PpriIv
I also think that a quarter of portfolio could be invested in fixed income. Not during your accumulation years, but try to have that allocation at or around your retirement date.
3 High-Dividend Stocks Raising Distributions [View article]
On a lighter note, I think I was probably calculating using the dividend payment Altria will be paying by Sep 2013 of 47 cents/share.
Cig volumes keep declining, but the price hikes have more than offset declines, leading to higher profitability. 20% of US population smokes, which is not a small number of users. Yes it's down from like 40% which was 50 years ago, but the population is larger now than 50 years ago as well..
How To Retire With Dividend Stocks [View article]
Investing $1000/month in a portfolio of dividend stocks yielding 3% today, which has a dividend growth of 12% per year, would generate over $26,300 in annual dividend income in 24 years. If dividends are reinvested, chances are that this investment would generate much more than $39,600 per year in 24 years. As a result, for every dollar that you save in your 20s and put in dividend stocks, you would generate one dollar in dividend income in your 50s or 60s.
Warren Buffett Sure Knows How To Plant A Tree [View article]
While I appreciate the article you are writing, and I find it very inspiring, I found a few items that might need some additional clarification. When you commented on the Bank of America warrants that Berkshire owns, you mentioned that if dividends are increased, Berkshire would earn $1 billion in annual distributions. The problem with this statement is that dividends are not paid to warrants or options.
If Berkshire were to purchase BAC stock outright, then yes, they could earn dividends from it. But they need to essentially spend money to buy 700 mln shares, which would cost approximately $5 billion. The 5 billion is already earning them 300 million in distributions. When the preferred stock is retired in 9 years, BRKA would stop receiving 300 million in annual dividends but would get 5 billion in cash. It can then use these proceeds to exercise BAC warrants. But, in order for them to replace the income from the preferred, they would need an annual dividend of at least 43 cents/share in 2021...
7 Dividend Stocks For An Inflation-Adjusted Income Stream [View article]
17 Cheap Dividend Aristocrats On Sale [View article]
So if your investing horizon is 20 - 30 years, how do you think you should invest your money?
17 Cheap Dividend Aristocrats On Sale [View article]
Great question. I used Zecco for a very long time, since they had $0 trades until early 2011. Then I simply increased the size of new investments. I would say that individual investors should buy stocks in $1000 increments at a minimum. If you use Zecco, that's 4.95 or 0.50%. If you wait untill you accumulate $2000 before you purchase a stock, that decreases expense to 0.25%. Of course unlike an index mutual fund where they charge you 0.10% every year, unless you sell, you would never have to pay another dime. For dividend mutual funds and ETFs, they typically charge you 0.50%/year at the minimum..
Commissions are really low. In the late 1980s, early 1990s they have been pretty steep.
Buy Low, Sell High: A Dividend Investment Strategy Contradiction? [View article]
In my research of dividend growth stocks, I have uncovered that many have stayed "overvalued" for DECADES. For these lucky investors who were able to purchase them at attractive valuations, that meant that the stocks they owned were overvalued for long periods of time. However, it is typically those companies that generate strong total returns.
I do agree that utilities have gone a little bit ahead of themselves. I purchased ED when its yield was close to 6%.. A few days ago it was below 4%... My yield on cost is close to 6%. If I sell a utility, I would reduce exposure to the sector. I would also have to worry about what to re-invest the money in.. Most utilities are overvalued, similar to ED..
So .. my decision is to keep it for the time being.. I haven't put any money at ED since 2010...
Tech Dividends Are On The Rise [View article]
I guess I am using the term "sector" very loosely.
If you look at some US retailers, some are actually consumer staples while others are consumer discretionary.
http://bit.ly/vf9U9w
Technically however, using Standard & Poor's classifications, Wal-Mart, Walgreen's are Consumer Staples, while Lowe's, Family Dollar and Target are examples of Consumer Discretionary stocks.
Looking For Margin Of Safety In Dividends [View article]