Dividend Growth Investor

Good Debt Coverage for Sustainable Dividends

LTW,

Did you actually read the article?

Here are some highlights for you:

Some investors typically focus on debt to total assets to gain a perspective on the amount of the leverage the company has. While this method is widely accepted by some investors, I believe that it has some shortcomings, which might prevent investors from seeing the bigger picture. Most importantly comparing debt to total assets does not tell whether a company could service its debt obligations or not.


Dividend investors should generally look for a higher coverage ratio of interest payments. A lower coverage indicates that a decline in earnings could generally make it difficult for the company to service its debt, which could not only jeopardize its dividend payments but also could lead to bankruptcy down the road.


On Oct 14 09:27 PM long term wag holder wrote:

> I don'tunderstand this article. I understand a lot about debt, but
> the numbers in this chart are not explained very well

ADP: Dividend Stock Analysis

Well during times of recession neither should do well.. But the thing is that markets are forward looking, so probably that's why price of oil has gone up so much year to date; ADP is flat to slightly down this year.. While payrolls are lagging the rebound in the economy, I am sure they would pick up soon. So the market might be discounting this with ADP stock..

The issue with Canroys is the year 2011, which would mark a lot of canroy conversions into corporations with lower payments to sharehodlers; also some of them also produce nat gas, which hasn't been doing that well..

While current yield is important yield on cost is important as well.

On Sep 13 12:56 PM casey00001 wrote:

> I am aware of the information you reference, thank you. However
> even if the dividend gets cut by 50% which recently happened, the
> yield is still higher. Also over the course of time which of these
> two is more likely to go up? The price of oil or the price/volume
> of outsourced payroll processing (ADP's primary business) during
> times of a recession?

ADP: Dividend Stock Analysis

Of course I listed the yield on the stock - read carefully.

I think that you are the one missing the point here - you are buying a stock which has a high current yield, but you have no idea whether this yield is sustainable or not.

ADP's yield is sustainable, its dividend payment is growing, and thus there's a big chance your yield on cost would increase over time, well ahead of the rate of inflation.

Oh yeah, and read this on Canroy's:

www.dividendgrowthinve...

www.dividendgrowthinve...


On Sep 12 01:34 PM casey00001 wrote:

> You list yourself as Dividend Growth Investor, yet each time you
> post you go through a complicated analysis and always fail to tell
> what the current yield is on the stock. In this case ADP pays a
> crummy dividend of 3.44% based on the current stock price of $38.40.
> The Canadian Royalty Trusts (PVX,PGH,PWE) pay four times this dividend
> and do it on monthly basis. This is a much better investment.

Should You Still Buy and Hold Stocks?

I would say buy them on dips. Diversify your holdings, build your positions over time, and re-invest your dividends selectively.

These 47 S&P 500 Dividend Aristocrats Are Good Investment Opportunities

THofler,

Most Aristocrats would generate very good inflation adjusted streams of dividend income. For example some investors who purchased JNJ, PG, MCD, MO 15-20 years ago are now generating double digit yields on cost. MLPs are great for now, but what happens if the US government decides to abolish the MLP structure ( just like the canadian government decided to abolish the income tax structure iby 2011)? chances are yields on MLPs would drop..

In addition to that, when interest rates start increasing,MLPs might be affected negatively in the process.


On Jul 15 11:40 PM THofler wrote:

> I happily own 4 of the above, as well as a few Master Limited Partnerships.
> The more I learn about the MLPs the more I wonder why I should own
> anything else? They are tax advantaged & pay high distribution
> yields. Check out the info at the web site below, especially the
> presentations and publications page,
>
> naptp.org
>
> Why own the aristocrats? For diversification, of course, since MLPs
> are entirely in the energy space.
>
> I also like most any foreign high dividend stock with a good future.
> Since the dollar has recovered some of its value in the FX markets
> in recent months, now is a good time to move some of one's portfolio
> out of the dollar and into these foreign stocks ahead of the next
> dollar decline. I like the Euro integrated oils (BP, E, TOT) and
> recently picked up some of the Brazilian utility CPFL Energia (seekingalpha.com/symbo...).

These 47 S&P 500 Dividend Aristocrats Are Good Investment Opportunities

Avy,

There are several companies on your " list", which have cut dividends in 2009 several months ago.Ganett (GCI) and Legg Mason (LM) are such examples.

Rohm and Haas(ROH) which is also on your list, has been bought out by Dow Chemical several months ago as well.

Check these articles below for an up-to date list of the dividend aristocrats to avoid in 2009:

www.dividendgrowthinve...

www.dividendgrowthinve...

Best Regards,

Dividend Growth Investor

Ten Companies Who Increased Dividends

Notsosmart,

What are the odds that FRO and NAT will cut or suspend their dividend payments just like DSX, ESEA and FREE did last week?

Attractive Dividend Stocks in the Buy Zone

Rich,

You might also want to check this article out.

seekingalpha.com/artic...

Attractive Dividend Stocks in the Buy Zone

For those investors who don't have any funds to invest now, they could re-invest their dividend payments or hold tight.

The hammer, actually most of the P/E's on the stocks in the list are below 15.

20 Top High-Dividend Growth Stocks

NTS and JET1C,

Thanks for your suggestions. While the tanker stocks do offer high current yields, their management is not committed to paying a consistent dividend check from quarter to quarter.

The 20 stocks above (with some exceptions) have been raising their payouts to shareholders for more than 25 consecutive years each. The dividend yields are above the market dividend rates. The growth in dividends in most of the stocks in my list above is above average; this will lead to most of them doubling their payment in 5-10 years.

What would you rather have a high dividend yield now which is erratic or a smaller dividend yield now which is growing rapidly?

I have found for myself that chasing high yields doesn't work for me. Thus I tend to stay away from tanker stocks and canadian trusts ( which doesn't mean they should be avoided).

Dividend Analysis: Automatic Data Processing

Steve,

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

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:

dividendgrowth.blogspo...

16 High-Quality Dividend Stocks

Thanks for sharing this list with us. I am long several of these stocks mentioned above, and I really believe that they would be providing increasing dividend streams over the next few decades.