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  • Dividend Contenders: 16 Increases Expected By The End Of July [View article]
    It's nice to see an above-average increase, especially from a company in a cyclical industry.
    Jun 13, 2012. 01:26 PM | 3 Likes Like |Link to Comment
  • McDonald's Below $60? Don't Hold Your Breath [View article]
    If MCD hit $60, then it would have a P/E of 11.2 and a yield of 4.7%. I would be backing up the truck! However, I just don't see it getting there, either.
    Jun 7, 2012. 05:51 PM | 2 Likes Like |Link to Comment
  • Energize The Growth Component Of Your Portfolio With Chicago Bridge & Iron [View article]
    Larry: While the monotonically increasing earnings trends shown in the graphs are unlikely to be realized for highly cyclical companies, one could view them as more coarse-grained, multi-year forecasts regarding the overall direction of earnings growth.

    The analogy that comes to mind involves stock prices and moving averages. A stock price that is going up can nonetheless show great fluctuation, but a long-range moving average (e.g., 200 day) shows the overall direction of the stock price change that glosses over the shorter-term changes. One can view the earnings forecasts for cyclical companies in an analogous manner but at an even longer time scale: Earnings might fluctuate from year to year, but the overall direction of the earnings change over a 5- or 10-year period (a multi-year moving average, so to speak) might be positive while glossing over the year-to-year fluctuations.

    Thus, while the earnings forecasts in the graphs are unlikely to match up with the future year-to-year changes in earnings, the multi-year trend might be estimated reasonably well.
    Jun 7, 2012. 11:32 AM | Likes Like |Link to Comment
  • Best Practices For Dividend Growth Investors [View article]
    Miz: I love the idea of the "cha-ching" emails. A good motivational tactic.

    My approach to maintaining self-motivation involves my blog. Every month I report the dividends I received and post a snapshot of a table that tracks all my dividends for the year. I also post about dividend increases when they are announced -- those are among my favorite posts.
    Jun 6, 2012. 08:00 PM | 5 Likes Like |Link to Comment
  • Best Practices For Dividend Growth Investors [View article]
    A related way to handle emotions is to force yourself to wait, maybe a day or a week, before taking action. It gives you more time to think about your decision (i.e., to ask "why?") and avoid making a panic-induced knee-jerk reaction that you might regret later.
    Jun 6, 2012. 07:53 PM | 7 Likes Like |Link to Comment
  • Dividend Contenders: 16 Increases Expected By The End Of July [View article]
    I think you're right -- I'm not sure why I was expecting the announcement in July.
    Jun 6, 2012. 07:45 PM | 1 Like Like |Link to Comment
  • Best Practices For Dividend Growth Investors [View article]
    I also make "thank-you" comments to be polite and because I appreciate readers taking the time to provide feedback. However, whenever possible, I try to add something more substantive based on the comment to which I'm replying.
    Jun 6, 2012. 04:19 PM | 10 Likes Like |Link to Comment
  • Best Practices For Dividend Growth Investors [View article]
    David: This is a great list of best practices for dividend growth investors. An overarching point that touches on several of your points is that investors should make rational and informed decisions rather than emotional and careless ones. Having a clearly defined goal, a strategy to achieve that goal, and discipline to follow that strategy are all important aspects of good investment decision-making. In addition, having a long-term horizon and not obsessing about short-term fluctuations in principal can help an investor stay focused on the big picture. Thanks for articulating these points and many others.
    Jun 6, 2012. 09:47 AM | 7 Likes Like |Link to Comment
  • A Longevity Dividend For Long-Term Investors [View article]
    Indeed. It would be a miracle if Congress ever passed a dividend policy similar to what I suggested.
    May 30, 2012. 03:46 PM | Likes Like |Link to Comment
  • A Longevity Dividend For Long-Term Investors [View article]
    To keep it simple, buying more shares (over and above reinvesting dividends) would not reset the clock. Thus, the investor is rewarded with a lower tax rate not only for maintaining the original investment, but for increasing his investment.

    Conversely, one could imagine restoring a higher tax rate (or partially resetting the clock; e.g., by knocking it back a year or two) whenever an investor decreases his position but does not close it. This would prevent someone from trying to game the system by selling all but one share, then rebuilding the position later.

    I will admit that I have not given this idea a great deal of thought, so there are undoubtedly some issues that would need to be ironed out.
    May 30, 2012. 03:41 PM | Likes Like |Link to Comment
  • A Longevity Dividend For Long-Term Investors [View article]
    Interesting idea, although I do wonder about its feasibility and how many companies would be willing to do the necessary record-keeping.

    A while ago I thought of an alternative approach to rewarding shareholders for longevity (or one could say, rewarding shareholders for being *investors* rather than traders). It would be a variable tax rate on dividends held in taxable accounts, based on the number of years the stock had been held by an individual. The tax rate would decrease by some percentage for every year an individual remains a shareholder. For example, dividend tax rates might change as follows:

    Year 1: 15%
    Year 2: 13%
    Year 3: 11%
    Year 4: 9%
    ...
    and from Year 9 onward, the dividend tax rate would be 0%. (This is just an example -- one could come up with a different set of numbers over a different time span.) Thus, long-term investors would be rewarded for continuous investment in companies by eventually having no taxation of dividends, even in a so-called taxable account. However, this would apply on an individual-stock basis; i.e., a stock held for 9+ years would have no dividend tax, but a stock held for 3 years would have an 11% tax.

    The only thing one would need to keep track of is the date on which the position in the stock was initiated. Additions to the position would not reset the clock, so to speak, although closing out the position and then re-initiating it would. An advantage over the approach described in the article is that companies would not have to keep track of anything. It would be up to the individual shareholder when filing his tax return with the IRS (which, of course, means I am suggesting a change to the tax code).
    May 30, 2012. 08:28 AM | 1 Like Like |Link to Comment
  • Sysco: Building A Case For A Return To Growth [View article]
    Chuck: Thanks for this article on SYY. You make a compelling case for it as a good long-term investment. It does indeed look like there are plenty of opportunities for acquisitions and a greater likelihood of consolidation in the industry going forward.
    May 25, 2012. 06:56 PM | 6 Likes Like |Link to Comment
  • Dividend Growth: Kellogg Vs. General Mills Is A Tie [View article]
    I think GIS is a better investment than K. It has fairly stable earnings growth and good long-term prospects. I consider it to be fairly valued at the current price, which is consistent with the F.A.S.T. Graph article on GIS that also appears today:

    http://seekingalpha.co...
    May 25, 2012. 10:39 AM | 1 Like Like |Link to Comment
  • Dividend Growth: Kellogg Vs. General Mills Is A Tie [View article]
    Indeed, GIS has outperformed K over the past 5 years.
    May 25, 2012. 10:31 AM | Likes Like |Link to Comment
  • Dividend Growth: Kellogg Vs. General Mills Is A Tie [View article]
    The dividend increases from K might be mediocre for the next few years (this year's increase was just 2%), in part due to the Pringles deal. The company is issuing $2 billion in debt to fund the $2.7 billion deal and suspending share buybacks for about two years in an effort to reduce debt levels. Thus, I don't consider K to be attractive at the moment.
    May 25, 2012. 10:29 AM | Likes Like |Link to Comment
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