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  • Opportunity Costs For Dividend Investors [View article]
    Readers, please refer to the table listing Coca Cola's (KO) EPS, DPS, P/E from 1984 - 2003

    For whatever reason it didn't post here.
    Apr 24 06:33 PM | 1 Like Like |Link to Comment
  • The Right Time To Sell Dividend Stocks [View article]
    Haha, I like the company's business model, growth and although the price is overvalued now, I do not see myself selling for a long time. I like the quality of the company. If it declined, below 54 I would add to it. Thanks!
    Apr 23 10:39 PM | 1 Like Like |Link to Comment
  • The Right Time To Sell Dividend Stocks [View article]
    Chowder, what is your opinion on BF.B?
    Apr 23 07:26 PM | Likes Like |Link to Comment
  • Why Yield On Cost Matters To Long Term Investors [View article]
    Yes, your point makes sense. Canadian trusts and MLPs can buy new assets, and operate forever. However, I think that the large ones like XOM,CVX, COP, RDS/B, TOT, BP etc have the capital, expertise, technology and scale to find oil and gas in places where the little guys cannot do it, and do it cheaply. In an oil presentation I went to once they discussed how these majors are able to "increase the odds" of finding oil and gas in exploration projects to something like 3 or 4 out of 6 ( it could have been 5 out of 6, but since the figure is not in front of me I am afraid it is too optimistic).

    However on a personal note, I just do not like fluctuating dividends. My personal expenses fluctuate, but they fluctuate within a range ( unless I get a lethal and expensive disease tomorrow, know on wood). I like some stability.. If the companies I own cut dividends, I know that something is wrong ( if I hadn't figured that one out already based on declining fundamentals prior).

    However, if O&G trusts/MLPs work for you, thats great. You have your strategy and it works for you, and as such you are way ahead of other investors, most of which depend on tips. Anytime I mention I invest in stocks, people always ask me for tips.
    Apr 23 07:22 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan Rewards Both General And Limited Partners With Higher Income [View article]
    In the example above, I used the term i-units/i-shares as a substitute for term KMR shares.

    The investor relations website calls KMR shares individual units and shares:

    KMR) are not taxable upon receipt to the stockholder. However, the stock dividend does affect the basis of each individual unit held by the stockholder. "

    And then

    "Example 1: A owned 100 units of ( on July 1, 2010 with a basis of $65/share, or $6,500 total. A received an additional 1.8336 shares (100 x 0.018336) of KMR shares on August 13, 2010, giving A a total of 101.8336 shares."

    The following resource describes it well:

    "We are a limited partner in Kinder Morgan Energy Partners, L.P. through our ownership of its i-units, and manage and control its business and affairs pursuant to the delegation of control agreement."

    I guess if KMR referes to their investment in KMP as owning i-units, and I referred to the KMR investment itself as i-units, then I see where the confusion comes from.
    Apr 23 07:25 AM | Likes Like |Link to Comment
  • Why Yield On Cost Matters To Long Term Investors [View article]
    I have not looked at the oil companies you mentioned, but the are not trusts, but partnerships. I also hope to have more than 10 years (and for you too).

    The issue with trusts is that they expire at some point in the future. For example for BPT it would likely result in no money for distributions by the late 2020's. A very high portion of distributions is a return of capital, as the carbons are pumped out of the ground they would not be replenished. The trust investors need to reinvest a significant portion of distributions simply to maintain the asset productive base of their portfolio. With oil companies like CVX, they reinvest 50-60% of profits back in the business to find oil. And they are pretty good at discovering it. I can bet you that trust investors are simply spending all the distributions today " because they need the income".

    Unfortunately, I have worked with oil and gas trusts clients, and the one thing I hated about their prospectuses was the eventual decline in production ( as wells are depleted), distributions, while the expenses to operate the well increase over time.

    Now, if the companies you mentioned bought new wells, or developed new wells, then that should be fine for investors.
    Apr 22 07:46 AM | Likes Like |Link to Comment
  • Why Yield On Cost Matters To Long Term Investors [View article]
    Yield on cost matters, because it shows an increase in the dividend income relative to the amount invested. Dividend yield only shows what you have today, but does not put in perspective where you came from. Many people see CVX yielding 3% today and say, oh it is a much worse investment than an oil and gas trust high yield bonds or preferred stocks. In ten years, the CVX investment will be yielding 3%, and the other companies might still yield the same they did a decade ago. Hence a new breed of investors would be dismissing dividend growth investing as pure nonsense.

    However, what they fail to see is that in those 10 years, the YOC for the initial investment is 6% now. In contrast the yield on cost on the oil and gas trust is now half of what it was ten years ago, while the yield is the same as what it was ten years ago. The CVX investor has doubled his income, and his stake is worth more. Of course, this is an overgeneralization, as markets do not move in a linear fashion.

    As a dividend investor, I want to see rising YOC over the course of my investment. A decrease ( from a dividend cut) would not be good. When i decide to sell however, I do not look at YOC - i look for cuts in divs for example or something else I don't like

    On a side note, does anyone find Return on Equity to be a useful indicator in evaluating companies?
    Apr 20 07:37 PM | 4 Likes Like |Link to Comment
  • The Right Time To Sell Dividend Stocks [View article]
    Hi everyone, thank you for commenting. I just wanted to clarify that I used YOC in my example above for illustrative purposes meaning that the overvalued stock I owned will keep raising dividends and keep being a great company. I might not have done a good job in explaining that. YOC does not really come in my buy/sell decisions. My example with PG shows what I meant - a decent quality DG stock is close to fully valued/overvalued for a very long period of time, and investors who simply held on did very well. They might be sitting on 1000% gains, but they could reasonably expect the company to keep boosting EPS and DPS over the next 20 - 30 years.

    I am surprised that noone brought Buffett and his purchase of KO, which has delivered more than 1000% for BRK.B. Why should he sell the holding? This was pretty much the premise behind the article. If I butchered it, then I guess that makes me an excellent author ;-)

    I am going to write up another piece to try to clarify some comments.
    Apr 19 07:09 PM | 3 Likes Like |Link to Comment
  • The 'Retire Young' Portfolio [View article]
    " For example, we all know that companies like Exxon Mobil (XOM) and Coca Cola (KO) are well-managed and successful companies with strong margins and a great history of dividends, but these companies will not really help you retire early unless you buy them soon after a market crash. "

    This is simply incorrect. Actually, if you allocate a certain amount of funds every month in quality companies like KO, PG, MCD, WMT etc when prices are fairly valued and you create a diversified portfolio, you reinvest dividends, you should be able to retire earlier that most other people.

    Taking shortcuts by purchasing speculative companies is the surest way to Retire Old. Another strategy to guarantee that you retire old is taking small profits and never letting the company you purchased deliver the outstanding performance that your analysis identifies.
    Apr 18 07:40 AM | 1 Like Like |Link to Comment
  • Omega Healthcare Investors: A High Dividend Yield REIT [View article]
    Well, if your goal is to actively time the market then this article is not for you.

    I have put my money where my mouth is, and I am a long-term investor. Where is your money invested in Brad Thomas? Certainly not in your recommendations.
    Apr 14 10:31 AM | 3 Likes Like |Link to Comment
  • Omega Healthcare Investors: A High Dividend Yield REIT [View article]
    I replaced UHT with DLR and OHI at the end of March.

    If you think the FFO/share will increase, then it is fine to sit tight, and get paid 6% to collect the dividends.
    Apr 13 12:20 PM | 1 Like Like |Link to Comment
  • Are These High-Yield Dividends Sustainable? [View article]
    Thank you everyone for commenting. I usually try to read comments, and see if I had missed anything and whether I can learn something new.

    On WIN, the company's dividend is not sustainable. I did not see any factual evidence from the comments. And no, VZ, T and S are not going to rely on WIN's wireline network for their wireless service.. They are investing in that next generation LTE. Wireline is a dying business, and a company cannot afford to pay a high dividend and reinvent itself at the same time.

    As far as PBI is concerned, they are trying to restructure themselves, and I truly hope for all you long PBI that this is successful. Unfortunately, I looked at the 2011 vs 2012 revenues, EBIT etc in the 2012 10-K, and was unable to see any revenue gains by segment. Can the company's new businesses generate enough profit growth to offset the decline in the legacy businesses? Is it reasonable to expect that a can company invest in its turnaround, and keep paying a 10% dividend?

    One of greatest sins of investing is emotional attraction to one's investments. I would not buy these companies, so whether they go up or down is irrelevant to me. I am just trying to educate invesstors to better research stocks before they purchase them, and not buy them solely because they had a high yield.

    Oh, and last but not least anyone who thinks that as an author I am writing articles in order to manipulate stock prices is completely out of touch with the real world.
    Mar 22 07:55 PM | 2 Likes Like |Link to Comment
  • 3 High Yielding Dividend Machines Boosting Distributions [View article]
    If you had bothered to read the two articles I linked to for Realty Income, you would have gotten the reason behind my opinion.

    Also, avoid being rude to people you do not know, especially if you haven't bothered to do much digging around. Nobody will take a person with a bad attitude seriously.
    Mar 21 08:07 PM | 2 Likes Like |Link to Comment
  • S&P Dividend Aristocrats Index - An Incomplete List For Dividend Growth Investors [View article]
    No David Fish,

    Thank you for your efforts to compile this complete list of income stocks for the past 5 years. I calculated the total returns, and it seemed that the champions index has outperformed the S&P 500 during this tumultuous period:

    I am surprised that noone has come up with the idea to create a mutual fund/etf that would track this fine list of companies.
    Feb 27 07:23 PM | Likes Like |Link to Comment
  • S&P Dividend Aristocrats Index - An Incomplete List For Dividend Growth Investors [View article]

    Thank you for commenting. I have been a long and loyal supporter of the work of David Fish. I uncovered this article from May 2008, where I first discuss him:

    For many income investors, Dave is in the Dividend Hall of Fame.
    Feb 27 07:21 PM | 3 Likes Like |Link to Comment