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Dividend Math Guy

 
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  • Beware These Dividend Growth Stocks With Historically Low Yields [View article]
    Bob,

    I didn't know that! That's a nice resource.
    Nov 14 11:02 PM | 1 Like Like |Link to Comment
  • Beware These Dividend Growth Stocks With Historically Low Yields [View article]
    Hi LB,

    Thanks for reading! I computed the trailing yields from the price and dividend information from Yahoo Finance. I had to take splits into account to get the historical yield right. I used getsplithistory, Yahoo Finance, and company webpages as needed to get the historical split information. I think Yahoo's recent data is pretty reliable, but I did have to clean some of it up by hand (special dividends, spinoffs, things like that).
    Nov 14 11:00 PM | 1 Like Like |Link to Comment
  • What Are The Real Earnings Of These Premium Companies? [View article]
    I was one of the people who asked the question on your previous article. Thanks for the answer!

    So let me see if I've got this straight.

    For MCD, WMT, and PG, price per owner earnings is approximately p/e, which is around 15-20 or so. For oil companies the p/e is very low compared to the price per owner earnings, which might be as high as the 20-30 range. So, despite the apparent low p/e of oil companies, their price/owner earnings ratio is actually in line if not a little higher than the price/owner earnings ratio for the stocks in this article.
    Nov 14 10:53 PM | Likes Like |Link to Comment
  • These Dividend Growth Stocks Have Historically High Yields [View article]
    The price under-performance of DE in the last couple of years is entirely due to p/e compression. Their earnings are up 30% in the last two years but the price has gone nowhere since then. Their earnings are up nearly 100% in the last 3 years and the stock has only gone up 20% since then. You can check out their 10-year financial history here

    http://bit.ly/1j7eghb

    Even if we hit another recession tomorrow and their earnings were forecast to drop 50% next year, you'd still only be looking at a forward p/e of 20.
    Nov 14 11:44 AM | Likes Like |Link to Comment
  • I Will Be All Over Dunkin' Donuts Like Sprinkles On A Chocolate Donut Very Soon [View article]
    Best of luck. Their margins are outstanding and their upcoming growth looks good, but they're still too pricey for me.
    Nov 14 02:01 AM | Likes Like |Link to Comment
  • New Money Is Coming Into The Market: Don't Miss The Boat [View article]
    I recently published a scan meant to help find such stocks.

    http://seekingalpha.co...

    In addition to those listed there and by Eric, check out AAPL and LMT as possibly undervalued stocks.

    Also, GIS, JNJ, and SO are reasonably-valued right now in my opinion.
    Nov 14 01:31 AM | 1 Like Like |Link to Comment
  • 2 New Investments I'm Considering At Today's Prices [View article]
    (TGT) recently came up in a scan I did for dividend growth stocks with historically high yields. Its current yield is about 2 standard deviations above its historical yield, its forward p/e is a reasonable 13.59, and I think it's one of the best buys the market is offering right now.

    The full article is here, if anyone is interested.

    http://seekingalpha.co...

    Long TGT.
    Nov 14 12:26 AM | Likes Like |Link to Comment
  • Allowing For The Possibility Of Risk [View article]
    I like the discussion of risk this article has spawned.

    >>>There are tools to quantify risk (as I'm sure you, as a math guy, are well aware).<<<

    Indeed, I am! For my own personal situation most of them fall short.

    The MPT definition of risk as volatility makes a lot of sense for live-forever total-return-focused institutional investors like pension funds.

    That doesn't make sense for me because how much my investments fluctuate doesn't affect the probability that I will reach my investment goals. My goal is to own a portfolio that throws off $40k (in current dollars) in stable dividends per year and that is expected to grow its dividends each year at a rate exceeding inflation. My definition of risk for my investment strategy is the probability that my strategy will fail to achieve this goal in the next 30 years. That's it! Every single investment decision I make for myself is based on this definition of risk.

    Others will have different goals, so their definitions of risk should vary.
    Nov 13 07:29 PM | 2 Likes Like |Link to Comment
  • Allowing For The Possibility Of Risk [View article]
    >>>Of course a 4% portfolio has higher risk than a 3% portfolio. Common sense says that. Even if the risk can't be quantified or pinpointed, it's inherently there.<<<

    But presumably a 1%-yield or all-growth (0%-yield) portfolio would also have "higher" risk than a 3%-yield portfolio, right?

    I don't think these kinds of portfolios---provided they are constructed reasonably well---really tend to have quantifiably higher or lower risks than one another. I think they have different *kinds* of risks, some of which matter more than others to different people. There is no one-size-fits-all approach here.
    Nov 12 01:42 PM | 2 Likes Like |Link to Comment
  • Leap Secured Options Writing - The Ultimate Safe Investment Strategy [View article]
    >>>there's not a doubt in my mind that the majority of options never get exercised. What this means is that call writing strategies - as opposed to call buying strategies - have a statistical, systematic bias in their favor.<<<

    Not necessarily. Whether or not there is a bias depends on both the frequency of exercise as well as on the gain/loss when the options are not/are exercised. If I insure 10 cars for a premium of $500 each and one of them gets wrecked and I have to pay out $10000, I've lost money even though 9 out of my 10 policies were never exercised. I know your strategy is not that simple but the point stands.

    Also, unless you have actually been using this strategy for several years or have accurate option prices over the course of several years, I find the touted results to be suspect. What evidence do you have that your option prices in your simulation are accurate, and what evidence do you have that this works well in all market conditions? I am genuinely curious.

    In addition, that 24% gain from this strategy is over the course of the last 3 years, right? The gain of SPY in that time is 54.5%. I know this strategy is meant to limit your downside, but consider another strategy: Invest in dividend growth stocks that haven't suffered downturns as large as SPY's during market crashes. See Chuck Carnevale's article here:

    http://seekingalpha.co...

    for an example of a dividend growth portfolio that suffered a maximum yearly drawdown of -12.63% during the last 20 years, versus -37% for SPY. I know that nothing is guaranteed if you just buy stocks without using options as well, but if KO drops 50% during a market crash (at that point it would yield 6%), buying pressure is going to show up soon and push the price back up.
    Nov 11 11:40 PM | Likes Like |Link to Comment
  • Allowing For The Possibility Of Risk [View article]
    Holding a 4%-yield portfolio carries the risk that its income will grow slower than the income from a 3%-yield portfolio.

    Without theorizing about black swan-type events, this is the best I can come up with.
    Nov 11 07:44 PM | 2 Likes Like |Link to Comment
  • These Dividend Growth Stocks Have Historically High Yields [View article]
    Great comment. QCOM looks really good to me right now. I've set a limit order on it but it hasn't been hit yet. Hopefully the stock will fall a bit more tomorrow on account of the recent earnings miss.
    Nov 11 04:20 PM | Likes Like |Link to Comment
  • These Dividend Growth Stocks Have Historically High Yields [View article]
    Thanks Mike! I'm a big fan of your articles. I think those are some of the top picks that came out of this screen.
    Nov 11 04:16 PM | Likes Like |Link to Comment
  • These Dividend Growth Stocks Have Historically High Yields [View article]
    Thanks! I added to my TGT last month, slightly overweighting it. I was pleasantly surprised to see it come up in this screen, and I'm glad to hear that fast graphs shows it as a good value too. I also had a limit order go through on DE today, establishing a starter position.
    Nov 11 04:13 PM | Likes Like |Link to Comment
  • Insiders Are Selling Google [View article]
    The housing market collapsed and we had a global financial crisis?
    Nov 11 04:06 PM | 6 Likes Like |Link to Comment
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