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  • 3M Co declares $0.855 dividend [View news story]
    An American industrial icon proves its mettle again. Let's hope others take notice.

    Still kicking myself for not buying at $45 in the middle of the last recession.
    Dec 17 11:55 AM | 2 Likes Like |Link to Comment
  • Long-Term Investors Should Use Historic P/E Ratios To Find Hidden Value [View article]
    DGI Guy, good article with points to ponder.

    If I may make a couple comments. Please don't take them as criticism, just something bouncing back and forth in my pea brain.

    You mention that CAT's P/E bounces around as it falls in and out of favor. I'm not sure that is the whole, or even main reason. Could it be that CAT is a cyclical company and the earnings also bounce around in the business cycle hence having an effect on P/E?

    Also, the debt/equity ratio rule may cloud your judgement sometimes. Take CLX for an example. I quickly pulled up the S&P stock sheet for CLX and found the FY13 LT debt at $2170 million and equity at $146 million giving LT Debt/Equity of 14,863%. Egads! Yet CLX has been pumping out higher dividends for 36 years, has a current EPS payout ratio of only 65%, a current ratio (FY13) of 1.3 and is expected to grow EPS around 6-8% annually for the next 5 years.

    I suspect the equity value is skewed because many of their income-producing assets have been fully depreciated. I would imagine if a machine was pumping out the same quantity of Clorox Bleach bottles as it always has and current technology will not bring greater productivity per bottle, that I'd still be using the same machine to continue making profits until it fell apart regardless if it had any value on the books.

    I understand the aversion to debt. However, it's how it's managed that can make or break a company. Don't get trapped into ruling out specific companies just because of a number. Of course, you've got rule #10 to help you out there.

    However, it's your rule. The important thing is you have a plan and trying to stick with it.

    Thanks for making us think.
    Dec 13 02:14 PM | 3 Likes Like |Link to Comment
  • My 5 Simple Rules For Investing Stability [View article]
    Mr. Herring, another great article.

    When I got to the first two sets of graphs, I kept saying to myself "there's not enough information". If I went by gut instinct, I would've picked the orange company. I kept saying the accumulated dividend stream would make up for the volatility but was still uncomfortable. As more details were revealed, I felt much more comfortable with the blue company.

    As an aside, my ESPN must have been on overtime because I had an inkling you were comparing KO with some high-yield mREIT or BDC.

    Looking at cpo111's comment, the total return really was much better for his time frame and glad he did so well. The problem is, as you stated, would you have held on with that volatility? For me, probably not. For someone who is counting on that steady income, it's probably not a good idea.

    In my case, I need the steady dividend paycheck. I don't have a "backup plan" other than Social Security and I couldn't put together a budget nor a projected strategy and not have a reliable estimate of what my investments will return to me. When I look back at required expenses -- property taxes, insurance, heat, electricity and food -- they correlate much more with the blue trend than the orange trend.

    For someone who has extra cash to "play with", I see no problem taking an intelligent risk as long as you recognize the consequences.
    Dec 13 12:30 PM | 1 Like Like |Link to Comment
  • Which Is Best: DRIP Or Collect And Invest? [View article]
    My wife says I'm all thumbs. Do I get to vote?
    Dec 10 11:08 PM | 3 Likes Like |Link to Comment
  • Which Is Best: DRIP Or Collect And Invest? [View article]
    Tadpoles_UK, could those be shares purchased before TD bought out Waterhouse Securities? I know back when I had a taxable account with the now TDAmeritrade, they didn't have any records of my purchases before the buyout. Luckily, I had a drawer full of statements I was able to sort through and find the relevant information.
    Dec 6 10:17 PM | Likes Like |Link to Comment
  • Which Is Best: DRIP Or Collect And Invest? [View article]
    Modicum, I suggest you call and talk to a rep. You can do whatever you want with DRIPs. I used to pick and choose ("old me") what was reinvested. When I transferred wife's IRA, the rep said he could set it up so every position she bought would be automatically enrolled in DRIP. So, I did that with her account and then changed mine also.

    You also don't have to call. You can use the on-site messaging to affect the same changes. At least it's been that way for me.

    Caveat: you have to designate which stocks are DRIP'd before the record date for each company otherwise it won't get reinvested until the next distribution date.
    Dec 6 11:59 AM | 2 Likes Like |Link to Comment
  • Which Is Best: DRIP Or Collect And Invest? [View article]
    I DRIP everything in all our portfolios. I've already proven I'm not good at market timing so why play the game when the odds are against ME. Additionally, the dividend streams are low enough that I wouldn't be able to take a meaningful position for 6 months or more. With sweep account rates at less than 1%, I'm losing money on those small amounts and missing out on the effects of compounding that I see every month I log the dividend reinvestments in my spreadsheet.

    At times I have something wildly overvalued (not often) or I see an opportunity to improve the portfolio. Then I'll either trim below my desired holding or swap out the holding with something "better".

    I think it helps to "know thyself".

    Thanks for writing another interesting article, Mr. Carnevale.
    Dec 6 07:48 AM | 4 Likes Like |Link to Comment
  • Watchlist For Premium Value Stocks On Sale [View article]
    Mr. Nadel, 1/3 position left and watching. I can afford to be patient now since we've already started the compounding machine.
    Dec 1 11:42 PM | Likes Like |Link to Comment
  • Retiree: What Role Should High Yield Play In A Distribution Stage Portfolio? [View article]
    Bob, excellent article. Taking a critical look at your mistakes can be a sobering experience.

    I'll leave the higher interest products to those who can afford it. I don't want to put my sole source of retirement income, outside of Social Security, at that much risk.
    Dec 1 11:28 PM | 1 Like Like |Link to Comment
  • Grandma's Money: Giving Her Portfolio A Charge [View article]
    Mr. DeCamp, thanks for reading and commenting.

    I've shied away from CEF's and BDC's because I really don't understand their business models right now. I need to have a feel for how they operate and make money and confidence in my understanding of the financials before I invest.

    For now, I'm trying to diversify by business sector and still have a way to go.
    Dec 1 04:21 PM | Likes Like |Link to Comment
  • Watchlist For Premium Value Stocks On Sale [View article]
    Dividend Sleuth,

    Thanks for the mention. The comment section is often invaluable here on SA.

    You really made me rethink on this one.

    I don't really keep a watchlist with yield goals although it's been mentioned here on SA before. I think you were the first one I recall bringing the concept up. I agree, many high quality companies do seem to trade at a premium.

    Some I'm actively waiting for are PG less than $77, MCD less than $90, JNJ less than $88 and CL less than $50. Others, which I don't expect to be at a value I'm interested in until we have another bear market, are CHD, MKC, HRL and SJM.

    The only one I've ever watched for yield was KO due to Mr. Crosetti's frequent comments about 3% yield being a good entry point. Did a check on other fundamentals and felt comfortable at that point. Took an opening position in my wife's account recently at 2.95% and counting on the next dividend boost to push us over the starting line.

    It's an interesting idea since P/E and yield are correlated with price so either method should result in buying around a fair price.

    Thanks for the thoughtful article.

    DW
    Dec 1 04:06 PM | Likes Like |Link to Comment
  • Retirees: What Is The Best Choice For A Small Income Portfolio? - Part 2 [View article]
    Mr. Wells, don't know how I missed this article but it was an interesting read.

    Just as I did with BDX and BAX in my wife's portfolio, you had a need to increase the income stream, for whatever reason, and made some intelligent choices. To me, that's just part of the ongoing monitoring.

    Everyone has a different view of risk. I'm not so sure you increased the risk level from my viewpoint but to ScottU's you did. Neither of you are wrong. Now, in my view, if you had sold Proctor & Gamble and bought Pitney Bowes for the increased yield, THEN I would've had to send someone over to give you a good talking to. 8-O

    In the same vein, I don't feel I am at more risk because my portfolio is 95% and my wife's is 98% invested in common stocks. Some would be highly agitated without some bonds, gold, guns and land in the mix. It depends on where you are in your investment life, your goals and your tolerance for price swings.

    I like what you did. Thanks for sharing the thought process and the results in this series. It gives us things to think about.

    Have a great holiday season!
    Nov 30 12:21 PM | Likes Like |Link to Comment
  • Grandma's Money: Giving Her Portfolio A Charge [View article]
    kathyjoe1967, thanks for reading and honoring me with your first comment.

    PPL was an interesting company and I almost chose it. What do you think of the G.B. regulatory system? Have they been at least adequate in rate setting and allowed rates of return? How hard is it to recover costs associated with natural disasters? If I recall, the British isle has had several bigger than normal storms over the last few years. I can see benefits of adding the international exposure.
    Nov 30 08:42 AM | Likes Like |Link to Comment
  • Grandma's Money: Giving Her Portfolio A Charge [View article]
    Thanks for the input, Mr. Herring. It's been tough playing catch up with little prior planning and balancing yield and safety. Your input has helped.

    Thanksgiving was great, despite the white stuff! However, can't wait to get back into the garden again -- our Brussels sprouts were delicious.
    Nov 29 12:40 PM | Likes Like |Link to Comment
  • Grandma's Money: Giving Her Portfolio A Charge [View article]
    auto44,

    If I recall correctly, their larger customers were several large mining operations in the Michigan upper peninsula. Since they don't entirely self-generate, some of that power may be merchant power which can be shed more easily that investments in more plants. I agree, though, it could be a risk over the longer term.

    If I were going to invest in WEC, I'd read that over more carefully.

    Thanks for the information and commenting.
    Nov 29 10:21 AM | Likes Like |Link to Comment
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