Dividend Growth Investor

Dividend Aristocrats Strike Back

Marcap,

You are looking at only one side of the story - tangible book value. I look at stocks as an asset that generates cash flows. EPS has almost doubled since 1999. Revenues have increased from 13 bln to 29 bln.

You are not understanding ABT's business. Here is the description: This diversified life science company is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics.

Intangibles such as patents are important for this company to innovate and sell new products and generate revenues. Once you have created a medical product like a drug, your variable cost is pretty small. How do you account for that in your valuation?

You are not going to make any $$$ no matter what the balance sheet says, unless the financial situation is directly monetized for you as a shareholder of ABT. Even if the company had $60/share in cash unless ABT distributes them back to you as a dividend, what good is it for the stock price?

Axelrod,

It is highly suspicious that HTE will keep paying out $.24/share every month. What would happen in 2011 when canadian trusts begin getting taxed less favorably?
Other trusts such as AAV, PGH and PWE have recently cut their distributions. If HTE maintains their distributions that's good for you. If

Anyways, I do like some MLPs, but I would caution you not to chase high yielding stocks. Look for sustainable dividend payments/distributions... Concentrating all of your portfolio in MLPs and Canadian Trusts is a recipe for disasterin the making. I am a big fan of diversification.




On Feb 24 11:41 AM Marcap wrote:

> "ABT,KO, TEG and SHW are indeed dividend aristocrats. They are amoung
> the few that have consistently raised dividends every year for more
> than a quarter of a century. That's not a small achievement"
>
> You are joking, right? Take Abbott Laboratories (seekingalpha.com/symbo...)
> for just one example. While Abbott's stated book value is $12.47
> per share, remove the huge amount of stated Goodwill and other Intangible
> crap totaling more than $15.8B from its Balance Sheet, and net book
> value plunges to a mere $1.35 per share. Now if anyone thinks that
> paying $54.42 (current market) for a stock with a net book value
> of only $1.35 is justified simply because of a current 2.7% dividend,
> boy do I have a deal for them.

Dividend Aristocrats Strike Back

Market Ace,

ABT,KO, TEG and SHW are indeed dividend aristocrats. They are amoung the few that have consistently raised dividends every year for more than a quarter of a century. That's not a small achievement

Marcap,

It is true that some companies raise dividends when they cannot afford to. But most companies that have raised their payments for more than a decade and can keep doing that are sending fundamentally strong signals. If you can keep raising your dividend in a recession, you must have a wide moat business. If you check the dividend aristocrats list in 2009, there have been 12 increases and only 2 cuts. The business models of most aristocrats and achievers are pretty anticyclical. You don't get to raise dividends for more than 25 years just by accident.
In a bear market, when your stock loses 50%, but your dividend check is the same and even gets increased, what do you care?

Dividends have accounted for the majority of total returns over the past few decades. Stock prices go up and down and few if any investors could take advantage of market timing. Thus a simple buy and hold with a dividend reinvestment could do miracles for you no matter where the stock market goes. As long as your dividend is stable and/or going up.






On Feb 23 10:33 AM market ace wrote:

> If you call these aristocrat dividend stocks you are a joke. There
> are many many much better dividend stocks out there compared to your
> pathetic list.

Highest Yielding Stocks Going Ex-Dividend in December

I wrote an article on the dividend capture strategy:

www.dividendgrowthinve...

Basically this strategy assumes that markets are inefficient and that there is free lunch. Even the author of the article doesn't do what he preaches - then why should you risk a large capital loss for a small dividend?