Seeking Alpha
View as an RSS Feed

Dividend Sleuth  

View Dividend Sleuth's Comments BY TICKER:
Latest  |  Highest rated
  • Mr. Market Is Not Thrilled With This Net Lease Merger, Neither Am I [View article]
    Thanks, Brad, for a fascinating article. I hold no position in either REIT, although I held CSG shares from the beginning and I think I exited about the time you did.

    I was intrigued by your original thought that CSG would make a good target for WPC. Gordon DuGan was the CEO of WPC during some of their growth in Europe, until he and Mr. Carey--the founder--differed on some things.

    In the triple-net universe, I'm long WPC, O, and NNN. At the moment, I'd rather add to those positions than jump into the new GPT.

    As always, I appreciate your good work.
    Jul 4, 2015. 09:54 PM | Likes Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    HVAC, I'm pleased to know you're willing to invest in an outfit you do business with. That's encouraging! Thanks for sharing your opinion and experience. I hope EMR continues to treat you well as a shareholder. Enjoy your weekend!
    Jul 4, 2015. 05:24 PM | Likes Like |Link to Comment
  • Why Has Enterprise Products Partners Fallen? [View article]
    Thank you, Factoids, for a well-reasoned and well-presented complement to Albert's article. Currently, I have no MLPs in the portfolio but I have three MLPs on my watch list: EPD, MMP and PAA.

    I'll give further study to your article and the data presented.

    This is the type of gentlemanly, open dialogue about commerce and free choice that I believe Mr. Jefferson and his colleagues had in mind 239 years ago. Well done!
    Jul 4, 2015. 09:17 AM | 12 Likes Like |Link to Comment
  • Enterprise Products Partners: A High Quality Midstream Now On Sale [View article]
    Excellent article, Albert. Excellent comments, all!
    Jul 3, 2015. 10:43 PM | 1 Like Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Thank you, Joni. We live in an era of much information, instant computations, precise mathematical measurements, etc. Even with all our data and number crunching, investing remains (I believe) at least as much art as science. So, it shouldn't be surprising that there is divergence in the fair value opinions about such a large and complex enterprise as EMR. If every investor service agreed about a definitive valuation, it would (in my opinion) be a bit scary and an illusion because there are so many variables and so many moving parts. Besides that, Mr. Market is fickle and subject to some rather extreme mood swings that are difficult to comprehend, much less quantify. Happy investing!
    Jul 3, 2015. 09:02 PM | Likes Like |Link to Comment
  • W.P. Carey: A Real Estate Investment For All Seasons [View article]
    Thank you for reading and responding, Toll-Collection. I agree with your assessment completely.

    Did you know that there's a special adhesive designed to repair broken toll booths?

    It's called Tollgate Boothpaste.

    Have a great weekend!
    Jul 3, 2015. 02:15 PM | 1 Like Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Fergen, thank you very much for sharing these good data points. I'm glad the signs are confirming that EMR is now in at least a fair value zone, and maybe a sweet spot! Have a great weekend!
    Jul 3, 2015. 02:13 PM | Likes Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Thank you for reading and commenting, Nathan. I believe it's important for us to be dispassionate about the market and to avoid reacting emotionally to price fluctuations. For me, this means living with a constant awareness that each of my stocks--and the market as a whole--could drop or rise 20-40% at any time. I'm developing a new appreciation for assessing the fair value of each portfolio stock. This good conversation about EMR has prompted me to add a column on my spreadsheet to indicate FV of each stock. I think EMR is in fair value range now. Here's a simple way to determine a fair value for Emerson:

    Look at EMR's high yield for the past five years. We've been in a strong bull market, so the high yield number will be depressed. Ordinarily, I would say that when a stock is near its 5-year high yield, it is in bargain territory, but a bull market tends to inflate prices and deflate yields.

    Here are the high yields for EMR for 2010-2014: 3.6%, 3.3%, 4.1%, 3.5%, and 2.8%. If you remove the two most extreme numbers (4.1% and 2.8%), you're left with 3.6%, 3.3% and 3.5%. A fair value for EMR would be anywhere between a 3.3% to a 3.6% yield.

    The current dividend is $1.88. Divide that by .033 and you get $57.00 Divide $1.88 by .036 and you get $52.20. So, a fair value range could be $52.20 to $57.00, and the mid-point is $54.60. Just for fun, I'm going to give EMR a fair value of $54.60.

    Each investor should find his or her own method of determining a stock's fair value. The conversation about underperformance begun by LDranch has been very helpful to me. It's made me think about many things. It's caused me to add a column to my spreadsheet. It's given me a new tool for analyzing the relative value of a stock. This should help me with my performance as a portfolio manager.

    I think there is much merit to this concept that in the short-term, a stock's performance is more about the stock picker than the company. In the long-term, it's more about the company and less about the stock picker.

    Our task as stock pickers is much like weather observation. I wouldn't call it weather forecasting, although some writers claim to have skills in predicting short term market price action. I believe at our disposal are all the necessary tools to determine whether a stock is in fair value range to make a purchase that has the potential to be a good long-term investment.

    When I bought my first "smart phone," I was driving from one city to another one about 200 miles away. There was a strong thunderstorm front moving through the area. I consulted the weather app on my phone and pulled up the radar screen that showed the track of the thunderstorm. Rather than going my normal route, which would have kept me in the midst of the thunderstorm for well over an hour, I took another route that enabled me to "follow" behind the storm, allowing me to drive virtually the entire distance with no rain.

    In the days before that phone and app were available, it's likely that I would have taken my normal route and would have been in hazardous conditions for more than an hour. I could have responded emotionally and "blamed" God or Mother Nature for my misfortune. If an accident had occurred, I could have asked, "Why have I been singled out for punishment or for bad luck (or whatever)?"

    Fortunately, technology had progressed to the point that I had tools available to help me make a better decision about the weather.

    Fortunately, the same is true for stocks. Tools (such as Seeking Alpha) are now available to improve my performance as a stock picker. The stock market fluctuates, just as weather is variable. Stock picking means finding the right stock and the right time to make a purchase. This is like finding the right route and right time to proceed through potentially stormy weather.

    Please excuse my rambling. May you find fair value in your stock picks and fair weather in your travels!
    Jul 3, 2015. 07:13 AM | 4 Likes Like |Link to Comment
  • PepsiCo's 22 Brands With $1 Billion+ In Annual Sales Analyzed [View article]
    Long PEP. Thanks for a very helpful article. To paraphrase Ms. Nooyi, it was good for me, better for me and fun for me. :-)
    Jul 2, 2015. 10:48 PM | 2 Likes Like |Link to Comment
  • EPR Properties Can Add Yield To Your Portfolio [View article]
    Thanks for a very good article, Dan. I've owned shares of EPR in the past. I like the business model and I believe it's a well-managed REIT. I listened to the most recent quarterly earnings call and I put EPR back on my watch list. Your article is very helpful. The projected casino project was one reason I sold the stock. I kept thinking about Chowder's question, "Is this a business I want to be in?" I'm still pondering that, but from a totally objective perspective, I'm glad to see there's some action going on with that property.
    Jul 2, 2015. 10:44 PM | 1 Like Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Thanks for reading and commenting, wdjax0n.
    Jul 2, 2015. 10:28 PM | Likes Like |Link to Comment
  • My Bet On Seeking Alpha's Future [View article]
    Mazel tov!
    Jul 2, 2015. 09:52 PM | 2 Likes Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Thanks for reading and your good question, Pete. Most people who use the "Chowder Rule," or as Bob Wells calls it, the "total dividend return" number, use the five year dividend growth rate. That would be 5.8%, according to David Fish. So, the classic Chowder Rule computation is 5.8% plus the current yield of 3.4%, which would be 9.2%.

    Some people might use the 3-year growth rate, or the 10-year. Then there are companies like Helmerich & Payne (HP) that increased the dividend in two large increments to get it to the level they sought. That sort of thing makes computations for the Chowder Rule difficult. I think it works best when a company has a steady rate of increase, so that the 10, 5 and 3 year rates of increase are fairly close together.

    I'm helping a friend work on a project to set up IRAs for children. The criteria are: Dividend Champion (25+ years of increases), 3.0% minimum yield, 12.0% Chowder Rule Number, A+ minimum credit rating. The goal is to have one company in each sector.

    Try running a screen like that and you may find several companies that meet all the criteria. You will find some companies that meet every criteria except one. If a company meets the other criteria and has a 9.2% Chowder Rule number, I might be willing to give the company a passing grade. I view all these metrics as guidelines. Some investors are steadfast that if a company doesn't meet one's minimum standards, it is not considered.

    All the best to you!
    Jul 2, 2015. 05:50 PM | 2 Likes Like |Link to Comment
  • Wisconsin Energy's 3.93% Yield: A 5-Year High [View article]
    Thanks, Khen. I hope everyone had a chance to read your article about WEC from last March:
    Jul 2, 2015. 05:37 PM | Likes Like |Link to Comment
  • Emerson Electric: Not A Utility, Not A Radio Company [View article]
    Thank you for your kind words, DJ. You did a much better job than I did in finding an entry point. I EMR that will serve you well. I'm also uneasy when a company makes a major change (either a merger or a spin-off/sale). Maybe it's a sign that I'm getting old!

    I've thought about this at some length in the last two days. Stephen Simpson's article (referenced earlier) says the Network Power unit declined by 17% in 2014. EMR has a long history of deliberate action (rather than acting on a whim). When an executive is Vice President, then Senior Vice President, then Executive Vice President, etc., you know there are well-defined pecking orders and policies and procedures. (Stephen expressed his frustration that the company moved slower to make this change than he wanted. The other side of that coin is that EMR doesn't make hasty decisions!)

    In doing this research I read about company after company that was added to their portfolio as a "bolt on acquisition," and some additions that were transformative. If a company can make good decisions about additions, surely they can make good decisions about divestitures. (I hope Procter & Gamble are making good decisions in this regard, as well.)

    I hope this reinforces your views. I try to help where I can. :-)

    Enjoy your weekend!
    Jul 2, 2015. 05:09 PM | Likes Like |Link to Comment