Dividend Inc

Monsanto: Within Striking Distance

Agreed Van Knapp...I'll try to include charts for each concept that I refer to so that it is much more clearer. Thanks for the comment.

Monsanto: Within Striking Distance

Dow Theory is based on the writings of Charles H. Dow (founder WSJ and Dow Industrial and Dow Transport Index) as interpreted by S.A. Nelson, William Peter Hamilton (editor WSJ), Robert Rhea, E. George Schaefer, and Richard Russell.

The Dow Theory observes that stocks will retrace 1/3, 2/3, or 3/3 of a increase or decline of a previous movement. However, unlike the manner in which you mentioned that you use Fibonacci numbers, Dow Theorists wait until the turn takes place before calculating the upside and downside targets. Obviously, both methods are more art than science and therefore are only worth what you get out of them.

I suspect that those who apply upside target to a falling stock or index aren't appreciating the value of the current declining trend. When a stock is falling, I calculate the downside targets. When a stock is rising, to be cautious, I calculate the downside targets. The upside always takes care of itself.

There is a lot more on the topic of Dow's Theory on my blog at dividendinc.blogspot.c.... I think that you'll appreciate the fact that while Fibonacci numbers reflect nature, Dow Theory reflects the nature of markets specifically. I think that the most effective use of Fibonacciss is when they are applied to the Wave Principle.


On Nov 04 10:36 AM manuel wrote:

>
> Relative Strenght Index is also around 20, a verY Good entrY point,
> sorrY can you explain me how you came up with the 4 levels mentioned
> above, is it some kind of fibonacci? But fibonacci retraces highs
> with actual lows, not past lows with past highs......

Stock Market Projections

Greetings Untrusting,

I will have to reply to your thoughts at another time. However, I hope that what I say will be constructive and useful. I appreciate you patience on the matter.

Touc

Stock Market Projections

Thanks for your comments AlbertaRocks.

Also, I appreciate that you've added a summary about yourself in your profile section. It was very entertaining.

-Touc

On Oct 18 11:31 AM Albertarocks wrote:

> Thanks for the clarification of the true meaning of the word "capitulate".
> I think another word the banksters should get clarification on is
> "decapitate".
>

Dow Theory: Party While It Lasts

Greetings Untrusting,

Thanks for the great questions.

Your questions are answered in full detail on my blog at dividendinc.blogspot.c.... I hope you find the article entertaining and enlightening.

-Touc

10 Dividend Stocks to Buy Now

Greetings Shishir,

If you get a chance, take a look at the research and sell recommendations on my blog. Using my approach did not come up with the names of GE, Dow Chemicals, Textron, Motorola and Pfizer as prospective investment candidates. As noted on my research recommendation list, none of the stocks appeared as candidate to buy. In fact, I have been fairly outspoken about GE in particular as part of the due diligence that is necessary.

Your critical analysis my research recommendations will conclude that a history of dividend increases is only the first of many parameters in determining the quality of a stock. In that regard we are in perfect agreement.

Again, the list that I generated was solely for the purpose of responding to Dividend4Life article asking for my own list. Ordinarily, I do not provide a wholesale list of "buy" recommendations.

-Touc


On Oct 10 11:44 PM Shishir Nigam wrote:

> As I have commented on Dividend4Life's approach, I don't believe
> the approach to selecting dividend stocks should be merely to choose
> the ones with the longest history of dividend increases along with
> a conservative payout ratio.
>
> Over this cycle, we have seen so many big/stable companies cut their
> dividends that the selection methodology itself needs looking at.
> If you had come up with this list in Oct, 08...you would most likely
> have GE, Dow Chemicals, Textron, Motorola and Pfizer all on your
> list - they were most definitely at their 52 week low and had been
> providing stable/increasing dividends for years. As you might know,
> since then, each one of those companies has slashed their dividends.
>
>
> Doing some "stress testing" or just simple analysis of how a company's
> business model may fare under adverse conditions can shed some light
> on what was to come for these companies. Something along those lines
> needs to be incorporated into any sort of dividend stock analysis.
>
>
> For more analysis, check out my blog: youngandinvested.com

10 Dividend Stocks to Buy Now

Greetings Jrham,

I'm going on the data provided to me by Mergent's Dividend Achievers Summer edition 2009.

-Touc


On Oct 10 12:39 PM jrham wrote:

> I noticed you indicated that WMT has paid a dividend for 33 years.
> When did Sam Walton take Walmart public? I see to recall it was 1972.

10 Dividend Stocks to Buy Now

Greetings Walt17,

Thanks for your thoughts on my work.

Since I don't control the title of the articles that are posted on Seeking Alpha, I have to take what they give me. Therefore, the exuberant title may be completely misleading. My Research Recommendations go to only those stocks that are compelling to me personally and that are within 10% of the 52-week low. However, this does not bar me from reviewing or buying any and all the companies that are approaching the 10% parameter.

As an example, my most recent research recommendation was NWN. As the stock was getting closer to the low I was ramping up the research. Data and analysis was coming from my site indicating that I was running the numbers. It wasn't until I had enough compelling factors to hold this stock for the "long term," if forced to, was I able to commit to issuing a research recommendation.

Although I have 10% as a parameter, your comments and evidence suggests that I widening the range to 20% as a means to cast my net wider. I have accounted for this fact on another investment blog that I'm currently co-authoring at New Low Observer www.newlowobserver.blo.... Based on your point, I may actually make the change from 10% to 20%. However, the current article was a response to Dividend4Life's seekingalpha.com/artic... request of my top ten dividend picks.

Regarding your comment that 10 year dividend history might not be so important if I'm swing trading. History means everything when investing in stocks. The purpose of investing with these stocks is to have a backstop provision in case I have to hold the stock longer than anticipated. By using this approach, I'm assuming that whenever I enter into a position, the stock price is going to fall. From this perspective, I better have plan to account for such a reality and likelihood. In this case, I must be compensated for the wait otherwise I'm not investing. I say this even though conventional wisdom suggests that I'm trading instead of investing.

As I've said numerous times before, this approach has provided outstanding results after transaction costs (in a tax deferred account) since 2004.

Thanks for your thoughtful comments Walt17. You may have made the difference in changing my mind on the 10% parameter.

-Touc

On Oct 10 10:21 AM Walt17 wrote:

> I find your methodology interesting. And am considering some of your
> points for incorporating into my own strategy. But it seems that
> some of your picks violate your rules. Specifically, "A stock is
> only considered a "Research Recommendation" when it has fallen within
> 10% of the 1-year low."
>
> Also, since you are essentially swing trading, it would seem that
> a 10 year dividend history is less important than current yield.
>
>
> Thanks for your ideas.

10 Dividend Stocks to Buy Now

Greetings David Van Knapp,

Thank you for reading and commenting on my article.

The virture of such a method to investing is that it eliminates much of the guesswork associated with the stocks of interest. Dividend Achievers and Dividend Aristocrats are both part of the the mix of stocks that I invest in. This leaves me with approximately 300 companies to focus on.

Additionally, I'm focused on relative values rather than absolute values. In the books Relative Dividend Yield by Anthony Spare and Dividends Don't Lie by Geraldine Weiss, the emphasis is on the importance of selling when a stock is at a historical high end of the range and to buy when a stock is at a historical low end of the range. I have pre-empted this process by buying at or near the low end of the range while not selling until a better alternative presents itself. This is in contrast to the idea of selling at some arbitrary point in the future. This concept is drawn out even further when we consided Edson Gould's altimeter which I have presented on my site with various stocks and the Dow Industrials.

Another issue that I've tried to deal with is the matter of the "long term." In my opinion, the long term has been maligned though discussions of what a person could make when investing. All examples of the long term exceed the investment time frame of each individual investor. This means that, in reality, the long term is probably a period of 10 to 15 years. Few people have the ability to 1) have a method that they'll stick to and 2) that can be applied over 30 to 100 years.

Even Warren Buffett is no longer the investor he was back in the 60's. Buffett's massive wealth doesn't allow him to get the same mileage out of his investments. In fact, the recent 10% yielding deals that he was able to work out with JPM and Goldman Sach demonstrates his inabilty to invest the way he really wants to. In a matter of 20-30 years Warren Buffett is no longer a player in the investment arena, albeit a stupendously wealthy non-participant.

Finally, the issue of seeking high current yield often masks the amount of time that you'll wait for the equivalent return from an equally undervalued stock with a low dividend yield. As mentioned before, the low yield might actually be, on a relative basis, a better value than a company with a high yield.

The tendancy is that a high yield acts like a fishhook, it draws you in with the lure of a high dividend yield and keeps you in with the anticipation of the next payment. This could be in direct contrast to the relative value component of the stock you're holding and more logical investment opportunities that are present at any given time.

Again, thanks for your contribution.

-Touc

10 Dividend Stocks to Buy Now

Thanks for the question...I respect the work that you generate on your site.

I just bought NWN (25%) and CEPH (25%) today. In addition, I'm holding BOH (50%)... a dividend achiever of 31 years. As outlined in my blog, I only hold a maximum of 5 stocks at a time, however I prefer to hold 3 stocks at a time.

At this point, it is a close race between CAH and WMT right now. CAH and other healthcare stocks, as an industry group, are severely underpriced. How I would fund my next transaction is by selling either my 25% in CEPH (considered a speculation) or half of my position in BOH. BOH is in the positive column for me right now, so the transactional costs are easily offset. Of course, I'm hoping for further declines in any one of the stocks above.

I tend to rotate in and out of gains versus the best alternative that is hitting a new low. I have already rotated in and out of CAH and BCR profitably (10% in less than 5 months each) this year. Last year and prior years were quite profitable using this approach as noted in my sell recommendation page. I was able to exceed the annual dividend yields by a wide margin while compounding the profits into new, less expensive alternatives.

My approach sounds inconsistent with the staid dividend approach but my battle scars have been relatively few since 2004.

Your thoughts are appreciated.

-Touc


On Oct 09 07:19 PM Dividend Growth Investor wrote:

> So are you planning on purchasing these stocks in the future? I noticed
> you only owned NWN...

The 10 Best U.S. Dividend Stocks

From bottom to top, my Dividend companies are:


10. Exxon Mobil (XOM): XOM has increased its dividend every year for 26 years in a row. Additionally, the company is within 23% of 52-week low with a dividend payout ratio of 41%.


9. Abbott Laboratories (ABT): ABT has increased its dividend every year for 36 years in a row. ABT is within 22% of the 52-week low with a dividend payout ratio of 41%. I have written about ABT on September 21, 2009 displaying the altimeter for ABT on a long term basis.


8. McCormick & Co. (MKC): MKC has increased its dividend every year for 22 years in a row. Also, MKC is within 20% of the 52-week low with dividend payout ratio of 42%.


7. Becton Dickinson (BDX): BDX has increased its dividend every year for 36 years in a row. BDX is within 19% of the 52-week low with a dividend payout ratio of 27%. I mentioned BDX on May 4, 2009, suggesting that this stock should be bought. On August 19, 2009, I reiterated my claim that BDX was worthy of consideration, especially after Warren Buffett himself had jumped on board after our May 4th posting.


6. Piedmont Natural Gas (PNY): PNY has increased its dividend every year for 29 years in a row. PNY is within 16% of the 52-week low with a dividend payout ratio of 69%.


5. Northwest Natural Gas (NWN): NWN has increased its dividend every year for 54 years in a row. NWN is within 16% of the 52-week low with a dividend payout ratio of 59%. NWN has been presented by me on September 22, 2009 and finally on October 3, 2009.


4. Bard Inc. (BCR): BCR has increased its dividend every year for 54 years in a row. BCR is within 14% of the 52-week low with a dividend payout ratio of 13%. Bard Inc. was first mentioned on Dividend Inc. on April 23, 2009. At the time, I mentioned that BCR has a very low debt level which allows the company to weather further economic declines. On August 26, 2009, after gaining 10.11% in 4 months, I recommended selling this stock.


3. Weyco Group (WEYS): WEYS has increased its dividend every year for 28 years in a row. WEYS is within 13% of the 52-week low with a dividend payout ratio of 54%. Weyco, the maker of Florsheim shoes, was featured on Dividend Inc. on July 6, 2009. Two negatives for this company are that there payout ratio is so high and stock is not very liquid.


2. Cardinal Health (CAH): CAH has increased its dividend every year for 16 years in a row. CAH is within 10% of the 52-week low with a dividend payout ratio of 32%. CAH was featured on June 4, 2009 and is considered, in my opinion, one of the most underpriced healthcare stocks out there. The current low price of CAH is due to the spinoff of the CareFusion (CFN) unit. However, the upside projections of CAH are, at minimum, in the $40 range.


1. Wal-Mart (WMT): WMT has increased its dividend every year for 33 years in a row. WMT is within 8% of the 52-week low with a dividend payout ratio of 30%. WMT was first mentioned on June 18, 2009 when I pointed out the fact that with such an extended range bound price for the stock there has to be value accruing in the stock. A further examination of WMT was done on September 19, 2009, in that assessment I determined that, on a price-to-dividend basis, WMT is poised in increase in value. One significant downside for this stock is the large increase in shares outstanding in the last few years. Touc.

Northwest Natural Gas: Worth Considering

Greetings Zorro,

Thanks for reading and commenting on my article.

Although it may be myopic on my part, I believe that any company can make a payout the produces a high dividend yield. However, I'm seeking companies that have a proven history of increasing their dividend, regardless of yield, over an extended period of time.

Realistic growth in the dividend is all that I have to gauge the management team's ability to actually grow while demonstrating a commitment to the shareholder. I admit that NWN hasn't materially grown for a while, however, the stock price has managed to beat inflation without the dividend at the same time that they dominate the region which they operate.

If you can show me a MLP that has increased their dividend payment without sacrificing their longevity as long as NWN has, then let me know. I'm definitely open to new ideas and information.

Thanks in advance for your contribution.

-Touc

Fannie and Freddie: Sticking it to the Taxpayers

Greetings IMiss,

I appreciate that you have read my article and my comments.

As an investor, I can appreciate a well run banking institution. Golden West Financial had a history of increasing its dividend every year for 22 years in a row at a compounded annual rate of 14% before it was bought by Wachovia. On a per employee basis, Golden West Financial had the highest net income of any banking institution (national or regional) in the nation.

Golden West Financial was able to do what few other banking institutions could in California, offer adjustable rate mortgages with the lowest default rate of any bank in the nation for over 30 years. Golden West Financial's success led to mortgage companies to attempt to replicate the process with disasterous results. Finally, when real estate prices were clearly in the stratosphere, the apparent success of banks (after acquiring mortgage companies) to offer adjustable rate mortgages led to the tsunami of variable rate mortgage products in an overpriced real estate market. Even before the known "mortgage" crisis, the major banks and mortgage companies could not offer the same products with the similar low default rates as was done with Golden West Financial.

Golden West Financial was railing against the dangerous position that the other banks were putting the financial system in long before the collapse came. When it became obvious that there was no way out of the situation, Golden West Financial submitted to the offer to be bought by Wachovia.

When you see that a train is coming down the tracks two miles away and you can't get your car off the tracks, you get out and watch from the sidelines. Golden West Financial did what was the most prudent thing to do considering the environment that we were in. For the reasons mentioned above, I think Golden West Financial should be considered the best run banks in the nation.

In regards to the other issues that you mentioned, I don't play the politics card very well so I can't say much for who they contributed their money to. While I don't think much of either side of the same coin, I figure that when I have the money I will divy it up as I please. Until then, I could care less who the Sandlers gave their money to. I'm certain that before the idiotic buyout by Wachovia, the Sandlers had enough money to make smoothies with $100 bills in them.

It seems that even a valuable lesson on how to run a bank for over 30 years with the lowest default rate in the nation can be obscured by politics. It is this kind of politiking that will blind much of the public as to the solutions future banking crisis. C'est la vie!

Thanks for reading my article IMiss. Visit my blog for more thoughts on great investments.

Regards,

Touc


On Sep 22 03:24 PM IMissJefferson wrote:

> Are you serious about Golden West being your favorite financial institution?
> I hope not.
>
> mortgagestats.blogspot...
>
>
> Herb and Marion Sandler sold Golden West before the bubble burst
> because they knew what they had done and profited 2.4 BILLION dollars.
> They are major contributors to MoveOn.Org, ACORN, and Center for
> American Progress....all radical left wing groups.

It's Time to Sell Equities and Look to These 3 Areas

Greetings Mr. Harrison,

Gold only rose during the "great" depression because governments had gold propped at a fixed rate. If governments didn't have the gold standard then the price would have fallen like all other commodities.

This also explains why gold fell from $1000 to $850 in 2008 and gold stocks fell, as reflected in the XAU index, from the level of 200 to 63 in 2008.

Although this fact may seem like blasphemy to gold bugs the reality should be acknowledge. I say this despite that fact that I have owned gold and silver bullion since 1996.

On Sep 18 08:56 AM Edward Harrison wrote:

> One other thing. There has been no correlation between inflation
> and gold over the past twenty-five years.
>
> news.goldseek.com/Mill...;br/>
>
> While inflation is generally thought to be an inflationary hedge,
> it is also a safe haven when there is currency revulsion. During
> the Depression, gold rose while deflation was everywhere.

South African Gold Stocks: No Margin of Safety

Greetings JudeJin,

As I have said in my prior commentary on gold, I bought gold and silver bullion in 1996 in anticipation of the conditions that we're experiencing right now. I don't have to worry about actually participating in rise in the commodity. I've been in it when gold was below $400 an ounce.

Additionally, on my blog I have listed many dividend paying stocks that beat out gold and silver stocks from the period of 1970 to 1980. I specifically compared quality dividend paying stocks to gold and silver stocks during a gold bull market to show that you don't need to follow the crowd and take on excessive risk in order to benefit from high inflation periods.

I'll give you an example of what I'm talking about. On a total return basis, Sysco Foods (SYY) crushed Newmont Mining (NEM) and Couer D'Alene (CDE) from the period of 1970 to 1982. 1982 being the very beginning of the bull market in stocks. From the period of 1972 to 1980, SYY matched the performance of gold and silver stocks.

There are so many stocks that fit this pattern during a gold bull market that you don't need to be in gold and silver stocks to benefit from inflationary periods (link to article at: dividendinc.blogspot.c....) Remember, gold and silver stocks are supposed to exceed by a wide margin the performance of the actual metal. Therefore, it would almost seem stunning that there are many companies that beat gold and silver stocks during the biggest gold bull market in history.

Finally, my discussion about being compensated for the wait demonstrates clarity on the matter of risk/reward. I address a matter that needs to be raised whenever considering any investment "opportunity." Not addressing this issue of compensation ignores the risk that an investor faces. While you call my focus on dividends obsessive, I call it a calculated approach. We're probably talking about the same thing...assessment of risk.

In a shameless self-promoting fashion, I ask that you please poke around my blog and review the points that I have previously made. I'm hopeful that you'll find convincing evidence on the points that I have made and maybe something of value.

Thanks for reading my article.

-Touc


On Sep 15 02:13 AM JudeJin wrote:

> "While I understand that the value of gold and silver mining companies
> is miniscule compared to say J.P. Morgan, there is the issue of compensation
> during the time that you wait for the industry to be recognized for
> its true value. This is where I'm interested in the dividend for
> gold and silver companies. Simply being "low priced" isn't enough
> to get me to throw caution to the wind."
>
> so i guess you do believe in the value in the gold/silver mines.
> but your obssessive concern with dividends prevents you from buying
> them right now.
>
> i predict that they'll start to pay handsome dividends several years
> down the road when the gold price is much higher and their stock
> prices are much higher too. if you insists on seeing dividends before
> buying, you'll probably miss the whole show. i guess you'll insist
> that you'd rather miss it than violate your principles.
>
> investing is not about principles. it is about risk and return.<br/>
>
> currently, the upside in gold/silver mines is far outweighing the
> downside.
>
>