Dividends#1

Contrarian, long-term horizon, dividend investing, portfolio strategy
Dividends#1
Contrarian, long-term horizon, dividend investing, portfolio strategy
Contributor since: 2014
Patrick Gunn,
One of my friends has been calling MO, Mighty MO for a long time!!!
Patrick Gunn,
BRAVO!
Excellent!
"The Dividend
Right now MO yields an impressive 3.7% and while that may seem high it is actually rather low for the company. This can be blamed on the year's long run up in share price that has outpaced the dividend growth. The dividend remains covered by both EPS and operating income with payout ratios at 81% and 50% respectively. If you look at a chart that is not adjusted for the Philip Morris/Altria spinoff in 2008 it would seem the dividend was slashed violently in 2008. That simply is not the case. Altria has increased the dividend for 46 years and has a place on David Fish's list of Dividend Champions because of that. The apparent drop in the dividend is attributed to the spinoff of Philip Morris in 2008 and Kraft in 2007. These spinoffs created immense value for MO shareholders and is one of the reasons it is so loved by long-time shareholders. The author of the cited article also expresses concern that if MO exercised a stock split, something they haven't done since 1997, it would effectively double the dividend. Fortunately, or maybe unfortunately, for shareholders, that isn't how that works. If MO did a 1:2 split today it would lower the dividend to $1.085 annually but the 3.7% yield would be maintained."
**********************...
Many new investors do NOT realize that MO did spin offs!
Actually, many financial advisors do NOT know that about the PM/MO spin off, they still think MO sells cigarettes internationally!!!
As far as a split doubling the dividend, that is a rookie mistake I made a long time ago.
We can give the other writer a break, as we all make mistakes. I am sure he will research his next article and it will be a good one like his previous ones.
AAPL is showing a lot strength today.
Looks like AAPL will head into the 80's today or sometime this week.
There will be a lot of cheap stocks in 2016.
We must be patient.
I have some cash on the sidelines.
I am also looking at SBUX.
ranthony1,
Thank you and best of luck to you!
Glad you bought more MO!!!!
SA software is not working well.
Hopefully they will fix all the issues.
The SA software is not working well.
rcook22108,
Thank you.
Sorry you do not like my shouting headlines, but it was a BIG move for me to SELL AGNC the last several weeks and transition into EEQ!!!!
I take my buys and sells in my ROTH IRA very seriously!!!!

Send a message to SA Editor Robyn Conti asking her to stop the e-mail alerts or how to stop them.
link below
http://seekingalpha.co...
20yearnovice,
Not sure what you are complaining about?
I made my Retirement Portfolio public back in *7/24/2014 and as of today's close it is up about 20%!!!
The S&P 500 closed at 1,984 on 7/22/2014, it closed at 1912 today, 2/3/2016. My Retirement Portfolio has outperformed the S&P 500 substantially since I made my portfolio public almost 1 1/2 years ago.
* = 7/24/2014 is the date my Retirement Portfolio was published here at Seeking Alpha; 7/22/2014 is the date used for the closing prices of my Retirement Portfolio.
If you are NOT following me, you should NOT receive any alerts regarding me.
**********************...
I have one question for you 20yearnovice,
What was the point of your comment?
To all my readers:
I SOLD All My AGNC Shares! I Bought More EEQ And I Have Some CASH
Feb 3, 2016 3:41 PM | about stocks: EEQ
My current portfolio allocations are below.
I decided that EEQ is a more stable stock as far as their distribution. They announced a stable distribution last Friday. I feel the stock has bottomed and see much more upside than downside.
The yield was the same for EEQ as AGNC.
1) MO = 77.7%
2) EEQ = 18.7%
3) CASH = 3.6%
EEQ pays a DIVIDEND based on EEP. http://bit.ly/1jZdIkz
EEQ Distributions
Enbridge Energy Management (or EEQ) pays quarterly distributions in the form of additional shares. The distributions are comparable in value to the quarterly cash distributions paid by Enbridge Energy Partners (or EEP).
Specifically, the distribution of additional EEQ shares is determined by dividing the cash value of a distribution declared by Enbridge Energy Partners by the average closing price of EEQ shares for the 10 consecutive trading days prior to the ex-dividend date.
Distributions declared by the Board of Directors are distributed to shareholders of record 45 days after the end of each calendar quarter. The payment date is moved forward if the 45-day mark falls on a weekend or holiday.
Disclosure: I am/we are long MO, EEQ.
Stocks: EEQ
kewgardens,
EEP/EEQ was very strong today considering the big sell off in oil!
I see this as a very positive sign and picked up more shares!!!
I agree with you!
Thanks Fred. L.,
I appreciate your response.
I will listen to their latest investor presentation and next earnings due out on 2/16.
Retired One,
Thank you very much for your detailed answer.
I wanted to answer, but I am very tired as I did not get much sleep last night. I will be watching the Iowa results tonight.
Best of luck to you!
I appreciate your response.
Be well and we will continue to converse.
Maybe one day we can meet at an Altria Shareholders meeting.
I am not planning on going this year, however 2017 is a possibility!
I just picked up more EEQ in my taxable non retirement account!
My yield for AGNC shares I sold was 14.7% and the EEQ shares could be higher depending on the calculation above.
Additionally, the EEQ distribution is safer than AGNC and the share price appreciation is much better in my opinion.
Why do you ask?
http://seekingalpha.co...
I Used ALL My CASH To Buy EEQ
I appologize for not updating my use of my cash last week.
I used all the proceeds from selling AGNC and bought EEQ last week. My cost basis for the new EEQ shares was $16. My cost basis for all my EEQ shares is $20.14. So, I have unrealized losses in EEQ, however EEP announced their dividend after the close on Friday and kept it steady at $0.583.
See
Enbridge Energy Partners declares $0.583 dividend.I posted several comments within that thread!
**** It is becoming more difficult to document all my trades. I have been doing such for the last 18 months and I am going to refrain from doing so going forward.
Thank you for understanding.
Current allocations in my Retirement Portfolio.
1) MO = 78.5%
2) EEQ = 15.5%
3) AGNC = 6%
Disclosure: I am/we are long MO, EEQ, AGNC.
* = EEQ pays a DIVIDEND based on EEP.
EEQ Distributions
Enbridge Energy Management (or EEQ) pays quarterly distributions in the form of additional shares. The distributions are comparable in value to the quarterly cash distributions paid by Enbridge Energy Partners (or EEP).
Specifically, the distribution of additional EEQ shares is determined by dividing the cash value of a distribution declared by Enbridge Energy Partners by the average closing price of EEQ shares for the 10 consecutive trading days prior to the ex-dividend date.
Distributions declared by the Board of Directors are distributed to shareholders of record 45 days after the end of each calendar quarter. The payment date is moved forward if the 45-day mark falls on a weekend or holiday.
Fred. L.,
It appears that EEP/EEQ are in a much better position than KMI.
It seems as though EEP/EEQ have not overextended themselves and are very conservative. They have a good credit rating.
Do you have any thoughts regarding their distributions and earnings for 2016, 2017?
If they{EEP/EEQ} meet their guidance, do you think they could raise their distribution, or will they be conservative in this environment?
Hi Retired One,
I appreciate and respect you.
I have studied the past AAPL selloffs and lived through them during the Steve Jobs years. They are quick and severe. Eventually the Nasdaq will have a big correction and AAPL will be part of the pin action, especially now since sentiment is not strong, this is my opinion.
I wish you the best with AAPL. You might be right and AAPL might turn out to be a very good investment.
You stated:
"Altria has been just a real "Monster" for its' Shareholders in 2015 with close to 20% rate of return (including dividends) and that is My belief that Apple can average 20% going forward if they were to increase the Dividend to the 4% range. "
What I am having trouble understanding is why you would take a chance that AAPL "might" average 20% going forward, when you know MO has a much higher probability to average 20% going forward. You know better than I because you have been a MO shareholder for almost 40 years!
*** I just pulled up a statistic on MO, the average annual total return for MO since 1/1970 is 20.4%, that is for a 46 year period of time. Remarkable!!
{From 1925 through the end of 2003, tobacco company Philip Morris, now called Altria Group, delivered a 17% average annual return, assuming all dividends were reinvested in the company's shares. Since 12/31/2003 to the present the average annual return for MO is exactly 20%!!! THIS IS 90 YEARS OF EXCELLENCE!!!!!!!
I also remember that you were 100% invested in MO for a long time and you reaped the benefits big time. You deserved it! Since you were an employee of MO, I want to thank you!
Questions:
1) What would it take for you to sell AAPL and put the money back into MO?
2) What % of your stock market assets are in MO? AAPL? OTHER?
3) I think I recall you have about 60% of your assets in MO, you used to be at 100%. Would you consider increasing MO back to 75%?
4) Are you trying to diversify? Do you feel even MO can't be 100% of a portfolio and that would be dangerous. I am very interested because of your history with MO. {I currently have 78.5% of MY stock market assets in MO}.
You stated:
" I spent 30 years building Wealth for Shareholders and that was Our sole Mantra. I am not a designer, creator, engineer, or Tech visionary. I am a true Manufacturing Businessman that catered to demanding Shareholders, and they are very glad that I did! I know what is wrong with Apple from an investment standpoint and what could be done to "Enhance Shareholder Value" as well as "Protect Shareholder Value" as well as "Create Shareholder Value". I did it for 30 Years successfully with Altria and You won't find ONE SINGLE SHAREHOLDER that will question or "Bad Mouth" the Management or their investment in the company. End of Story!"
**********************...
Again, I want to personally thank you!! Thank you Retired One!!!
AAPL should have people like you who care more about the shareholders, unfortunately AAPL does not have that type of culture!
"how is it possible that EEP is giving 12.75% dividend with oil this bad?"
The 12.75% yield {actually 12.77%} is a result of the share price decline. When EEP was trading at $33 {6 months ago} the yield was 7%. The yield was about 5.5% when EEQ traded at $41 a year ago!
So, when EEQ trades up to $40, the yield will be about 5.8% { after they raise the distribution to 0.59}.
"what is their BE point and at what oil prices do they maximize their profit?"
I do not know the answer, but I will find out.
Listen to the conference call after earnings are announced.
I will be reading and researching.
We must also include natural gas prices and what % of their earnings are derived from natural gas, etc!
Back up the truck, beep, beep, beep!!!!
kewgardens,
I like most of your points/thoughts and observations in your above comment.
Some of my thoughts and some facts below:
Fact: EEP has a track record of delivering on quarterly distributions, having never cut the distribution in the company’s nearly 25 year history, despite previous downcycles.
**Fact?: Shares of EEQ Held By Institutions 80% { According to Schwab.com}
70% according to http://tinyurl.com/h7v... {appears they are more accurate}
**Not sure who is correct, the point is that institutional ownership is very high, and ONLY 73M shares are outstanding for EEQ
163 Institutional Holders
51,785,805 Total Shares Held { This stat seems to bear out the 70% institutional ownership #}
*** = It appears to me based on the #'s, that the institutions are net buyers of EEQ shares! { SEE MY THOUGHTS BELOW}!
My thoughts: After having a conversation with my brother this afternoon, I changed my mind regarding your initial question "So does EEQ/EEP spike up on Monday?"
Even though EEP has a perfect record regarding its almost 25 years of never reducing their distribution, I was concerned {10% doubt on my part}
that their record could be in jeopardy and was relieved they did not cut.
*** = I believe most of the panic selling the last several months have been by average joe's NOT institutions, the smart money has been waiting on the sidelines while the public has panicked out, I believe most of the sellers have been exhausted and the smart money {Institutional buyers} will come in and YES, EEQ will pop higher soon, probably Monday, or by the end of next week.
Just some of my thoughts.
Good luck!
I have loaded up on EEQ!
kewgardens,
I have been thinking the same thing.
Now it may spike up and it may not, however I think the steady dividend has put in a bottom in this stock! That is important.
The recent bottom is $14.29. I do not see EEQ trading below $16 unless OIL drops down to $25 or less.
Now, if EEQ can rally as OIL drops, that would be a HUGE sign that EEQ has separated itself from the OIL albatross around its neck and that it can't be touched!
Best scenario, EEQ jumps 10-20% as OIL simultaneously drops 10% -20% or more.
Bottom line: The steady dividend announcement for EEP/EEQ is good news for its shareholders as the stocks will eventually go higher and we will receive a nice steady dividend!!!
Retired One,
You are 100% correct, AAPL needs to pay a much higher DIVIDEND!
MO is the best!!!
Glad to know you have owned MO for over 35 years!
I have owned MO since 2011!
I SOLD AAPL when the great Steve Jobs stopped running the ship.
Technology can't be trusted to dominate for decade after decade like MO!
Have you read Scott Kennedy's analysis on MO
http://seekingalpha.co...
The beauty of MO is that we do not need to beg them to raise their DIVIDEND. We know come August 2016, MO will raise their dividend. We know that since their guidance for adjusted diluted earnings per share is $3.00 to $3.05 for 2016, and since they have a stated goal to pay about 80% of that to its shareholders, the raise will be at least $2.42 annual dividend and probably $2.44. Now this does not take into account the SABMILLER-BUD deal, so the dividend can be much higher!!!
"Altria forecasts its 2016 full-year adjusted diluted EPS to be in a range of $3.00 to $3.05, representing a growth rate of 7% to 9% from an adjusted diluted EPS base of $2.80 in 2015."
This is not a good time to buy AAPL.
AAPL will have a much better entry point,
Patience is key when buying AAPL.
$65 (or lower) - $85
The Nasdaq will go much lower and drag AAPL down.
A previous comment of mine:
AAPL was a wall street darling, they are losing that status!
Sentiment is turning negative. To be continued.
It will be a better call after it drops much lower.
I wrote my original article about 18 months ago.
I knew that eventually AAPL would have problems and a sell off. The big sell off has NOT occurred yet! I would recommend that NEW investors stay away and wait for a better entry price, my advise 18 months ago still stands! No time frame, only that AAPL is not a good investment if one wants to own the stock as a buy and hold investment! If they are traders, this advice is not for them!
My $100 magnet theory still applies and as I predicted is an albatross around AAPL's neck!!
Wait for much lower prices to enter AAPL.
http://seekingalpha.co...
http://seekingalpha.co...
So many people, including many so called experts said I was crazy when I made this call 18 months ago when AAPL traded at $95, 18 months later and dead money! Yes, some dividends but not enough, AAPL needs to pay a much higher DIVIDEND, and then they would not drop so much when the NASDAQ goes into a bear market.
Nasdaq is down about 10% this year and will go much lower at some point in time, if not in 2016, then 2017. Sooner or later there will be a huge correction.
This is not a good time to buy AAPL.
AAPL will have a much better entry point,
Patience is key when buying AAPL.
$65 (or lower) - $85
The Nasdaq will go much lower and drag AAPL down.
A previous comment of mine:
AAPL was a wall street darling, they are losing that status!
Sentiment is turning negative. To be continued.
It will be a better call after it drops much lower.
I wrote my original article about 18 months ago.
I knew that eventually AAPL would have problems and a sell off. The big sell off has NOT occurred yet! I would recommend that NEW investors stay away and wait for a better entry price, my advise 18 months ago still stands! No time frame, only that AAPL is not a good investment if one wants to own the stock as a buy and hold investment! If they are traders, this advice is not for them!
My $100 magnet theory still applies and as I predicted is an albatross around AAPL's neck!!
Wait for much lower prices to enter AAPL.
http://seekingalpha.co...
http://seekingalpha.co...
So many people, including many so called experts said I was crazy when I made this call 18 months ago when AAPL traded at $95, 18 months later and dead money! Yes, some dividends but not enough, AAPL needs to pay a much higher DIVIDEND, and then they would not drop so much when the NASDAQ goes into a bear market.
Nasdaq is down about 10% this year and will go much lower at some point in time, if not in 2016, then 2017. Sooner or later there will be a huge correction.
I will send you a private message to continue our conversation.
Very nice. Steady eddie.