Retire In Half The Time With Dividend Growth Investing [View article]
Sorry:
Minor revision to my comment. I said the yield for PAYX would be close to 100% per quarter. The adjusted close for PAYX in March 1990, was $.43 per share. With the current dividend at 32 cents per quarter, the yield on one's ORIGINAL cost of those March 1990 shares would be 74.4% per quarter.
Retire In Half The Time With Dividend Growth Investing [View article]
Jeff:
Great point and I will try and side a little bit with Rodger. I understand his concept and explanation, but this definitely becomes challenging with all the variables that can occur to one stock.
This goes back to Josh Peters book: The Ultimate Dividend Investor, and his equation he uses in the book that I now use as part of my guidelines to buy a stock or not:
EXPECTED return = Current Dividend Yield + Dividend Growth
I know from what DVK said, this equation is bogus. You are combining different metrics (yield vs growth per year), that it doesn't compute, but Rodger shows it gives a rough guide to what to expect if the market was rational. Using Rodger's example, our 4% yield stock announces a 4% increase in the yield, so 4% yield +4% dividend growth = 8% expected return in the next 12 months by the 4% yield plus 4% in capital appreciation. If we increase the yield enough over time and the stock goes nowhere, eventually we have a stock that can be yielding 6, 8, 10%. At some point the market is going to notice, which will bid the shares higher and get back to that 4% yield point.
The greatest example, but very extreme, is PAYX. Look at Yahoo Finance. The dividend was miniscule, but they grew the dividend 30% per year for 20 years. If the stock had zero capital appreciation for 20 years, the yield would be close to 100% per quarter for the last 3 years!! It's not rational for that to occur for a sound, not-going-bankrupt-any... company, so the price of the shares will come up accordingly.
I guess the hardest part, which Rodger did say at the beginning, is that we assume the 4% yield. Most stocks have a dividend yield range, a la Geraldine Weiss, but for the display purpose of this article, it makes total sense.
How To Create a Bullet Proof Dividend Portfolio [View article]
Chowder ( and anyone else who wants to contribute):
You mention your rule of 4% of the value. Is that of the overall value of your portfolio as of the closing price of today OR is it from PMI - personal money invested? I ask because I don't know how I should look at my portfolio. New money that is being put in to a new stock i am looking at my PMI. One company I own is about 8% PMI, but because of such great growth, and a very solid growing dividend, is about 22% of the overall portfolio value. I don't add any more PMI money to it, but do let it DRIP.
When you are trying to stay within certain weights of your overall portfolio, how are people doing it?
6 Must-Buy Justifications To Buy Linn Energy [View article]
Todd:
Maybe I just don't get it. I don't ask this stupidly, but why does LINE exist? They can extract oil for $10 a barrel, sell it for $80, and companies sell them the land that has proven reserves for over 20 years. Why are these companies not keeping this oil for themselves and reaping the profits? What am I missing here?
8 Income Investing Tasks To Complete Before Your Financial Smarts Erode [View article]
RAS:
I think you have proven you already lost it. If you are 55, 55-34 = 21, not 19. I think you need David's attorney for the Revocable Trust now.
In all seriousness, Mr. C is right. I am the same age. I knew dividends were important back in 2003, but just went for Hi-Yield, which were MREITS and thoroughly got destroyed. Then EMH and then it hit me dividends were correct, but just the ones that grow slowly over time.
Not too make an age bias, but how do we do we do different forums: The Silver Sneakers, the Baby Boomers, The Gen X, The Gen Y, and the now I don't know how to talk and can only text someone generation and discuss issues that are more relevant to our age? Me reading about the benefits of Social Security for income is useless when I don't think it will be there.
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
jdhd wrote: "The price is determined from the average of the high and low for the quarter and from there is given a 5% discount."
So let me see if I understand this. UPS in that 3 month time period hits a high of $50, and now at the end of the time period, happens to be at the low of $30. They average the 2 to get $40 and you get 5% off $40, so at $39.20 versus the $30 it is currently selling at? Wow, that's a bargain.
I personally DRIP because I don't want to have the headache of trying to figure out which is the most undervalued at the current time. And Jim is slightly incorrect. The price can go down as long as the fundamentals don't change. Lower price = more shares to get more dividends. My guess is FTR's fundamentals have changed in 5 years, KO has not.
5+, you are right. If an addendum to this article can be done to say in these 5 years, the stock value of FTR is down 22%, but the income provided has gone up X%, then that gives a more complete picture.
Target's Dividend: Not Just Safe But Expecting Nice Growth Ahead [View article]
V:
I don't understand some of your data. Target has raised their dividend for 43(?) years, according to the CCC list. Also, on a conference call in August, the CEO or CFO made the statement that they want their sales to be 100 billion in 2017 from 66 now, their EPS to be $8 in 2017 vs $4 now, and their annual dividend to be $3 by 2017 vs $1.20 now, corresponding to a roughly 17% CAGR of the dividend. There are a bunch of ifs, but how on earth do you get your #s? It's not even close to what they, on the inside, predict.
Diclosure: I don't own TGT because the current yield is too low, but if it dropped about 20%, I would highly consider it.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
One last thing and then I will stop writing. Somoene asked about BAC of C and someone else responded about don't throw all financials out. I looked at the CCC tab titled Changes where Fish talks about cut dividend stocks/merged/unchanged. Now I know this list is not comprehensive and there may be more stocks that were not inclusive, but humor me anyways. Here are the stats:
25+ Year streaks Cut Unchanged Acquire Total 2008 ALL 9 1 3 13 Banks 6 1 0 7
2009 ALL 21 7 2 30 Banks 13 3 0 16
2010-1 ALL 1 5 1 7 Banks 0 2 1 3
All Comp 31 13 6 50 Banks 19 6 1 26
From 8-24 years Cut Unchanged Acquire Total 2008 ALL 0 1 0 1 Banks 0 1 0 1
2009 ALL 7 6 1 14 Banks 4 4 0 8
2010-1 ALL 3 26 1 30 Banks 2 11 0 13
All Comp 10 33 2 45 Banks 6 16 0 22
Quite simply, looking per year or cumulatively, half the dividend problem children are banks. Food for thought.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Rodger:
It's not that hard. On my spreadsheet, I call it PMI: Personal Money Invested. I can see my PMI yield vs current yield, my overall yield based on PMI vs the yield of the current portfolio value, and how many "free" (reinvested dividend) shares vs my original buy.
I think if we go back to David's premise of the article - I don't think most of us are doing this. He said it was his trading platform, not his core platform. The stock zoomed way too fast and he took his PMI out and is letting the rest ride. As long as XOM doesn't have a BP fiasco, he's fine. Kudos, BTW.
From reading enough comments from the usual suspects, I think most of us are similar in concept: We have had enough trying to time the market and worry about the capital gains/losses on a daily basis. To try and time one decision to sell for another to buy is difficult and simply, give enough time, compounding works.
Now don't get me wrong. Between my 5 accounts, I profited nearly 40K from HGIC in 5-6 months. I'll gladly take it, but like David's XOM, it wasn't expected. But I am a holder of stocks at heart. I'm using the chowder idea of seeing month 2010 has more income than same month 2011 and I see no reason for me to sell my Accenture stock when my PMI yield is over 7% and growing at an astonishing dividend rate.
Why Dividend Stock Kinder Morgan Is A Buy And 4 Ancillary Stocks to Sell [View article]
Todd:
Maybe I am not understanding this. As it stands right now, for every penny increase in the ditribution of KMP/KMR, KMI stands to benefit disproportinately. That I get. Eventually it gets to a point that Kinder Morgan the company can't expand. So far so good.
So you mention the structure has to change to benefit not just Kinder, but all shareholders. So wouldn't it make more sense that the value of KMP and KMR would go up if/when they change the IDR structure? Or is it more of - we don't know if they ever will, so if you want Kinder, buy KMI?
As a corollary, I am looking into NGLS/TRGP. I am thinking it is an interesting area. Do you set up like Kinder or is it different. Which company would you choose between the 2 - the parent or the MLP?
Abbott: Still A Dividend Growth Stalwart? [View article]
Why would it not surprise me that come April, in their (expected)next dividend increase, that to keep all the DGers like us, they increase it about 18%, and tell everyone at the time, that our culture has been to reward our loyal shareholders with annual dividend increases and now we have 2 companies to do that with?
I am holding and think I will be holding the 2 companies for a long time. Now, can we please have a few bear days where The PIIGS totally go into the crapper so I can use my sideline money, then it will be all good.
Abbott: Still A Dividend Growth Stalwart? [View article]
Denmark's withholding rate is 28 percent.
What I find interesting is what James K. said a few articles ago. Like five plus, I like the theory and concepts behind his ideas but don't usually react one way or another. Anyway, didn't he say something to the effect of those who rely strictly on the CCC list as "The Dividend Bible" will be disappointed that many of the companies that are Champions now will not be there 25 years from now? I guess he can say now 1 down, 100 to go.
Retire In Half The Time With Dividend Growth Investing [View article]
Minor revision to my comment. I said the yield for PAYX would be close to 100% per quarter. The adjusted close for PAYX in March 1990, was $.43 per share. With the current dividend at 32 cents per quarter, the yield on one's ORIGINAL cost of those March 1990 shares would be 74.4% per quarter.
My apologies if that didn't make sense before.
eyetri2
Retire In Half The Time With Dividend Growth Investing [View article]
Great point and I will try and side a little bit with Rodger. I understand his concept and explanation, but this definitely becomes challenging with all the variables that can occur to one stock.
This goes back to Josh Peters book: The Ultimate Dividend Investor, and his equation he uses in the book that I now use as part of my guidelines to buy a stock or not:
EXPECTED return = Current Dividend Yield + Dividend Growth
I know from what DVK said, this equation is bogus. You are combining different metrics (yield vs growth per year), that it doesn't compute, but Rodger shows it gives a rough guide to what to expect if the market was rational. Using Rodger's example, our 4% yield stock announces a 4% increase in the yield, so 4% yield +4% dividend growth = 8% expected return in the next 12 months by the 4% yield plus 4% in capital appreciation. If we increase the yield enough over time and the stock goes nowhere, eventually we have a stock that can be yielding 6, 8, 10%. At some point the market is going to notice, which will bid the shares higher and get back to that 4% yield point.
The greatest example, but very extreme, is PAYX. Look at Yahoo Finance. The dividend was miniscule, but they grew the dividend 30% per year for 20 years. If the stock had zero capital appreciation for 20 years, the yield would be close to 100% per quarter for the last 3 years!! It's not rational for that to occur for a sound, not-going-bankrupt-any... company, so the price of the shares will come up accordingly.
I guess the hardest part, which Rodger did say at the beginning, is that we assume the 4% yield. Most stocks have a dividend yield range, a la Geraldine Weiss, but for the display purpose of this article, it makes total sense.
My .02 cents, reinvested.
eyetri2
How To Create a Bullet Proof Dividend Portfolio [View article]
You mention your rule of 4% of the value. Is that of the overall value of your portfolio as of the closing price of today OR is it from PMI - personal money invested? I ask because I don't know how I should look at my portfolio. New money that is being put in to a new stock i am looking at my PMI. One company I own is about 8% PMI, but because of such great growth, and a very solid growing dividend, is about 22% of the overall portfolio value. I don't add any more PMI money to it, but do let it DRIP.
When you are trying to stay within certain weights of your overall portfolio, how are people doing it?
Eyetri2
Core Portfolio For The 58 Year Old [View article]
6 Must-Buy Justifications To Buy Linn Energy [View article]
Maybe I just don't get it. I don't ask this stupidly, but why does LINE exist? They can extract oil for $10 a barrel, sell it for $80, and companies sell them the land that has proven reserves for over 20 years. Why are these companies not keeping this oil for themselves and reaping the profits? What am I missing here?
Eyetri2
Thinking about starting a small position.
Targa Resources Partners: A 7% Yielding Natural Gas Liquids Play [View article]
8 Income Investing Tasks To Complete Before Your Financial Smarts Erode [View article]
I think you have proven you already lost it. If you are 55, 55-34 = 21, not 19. I think you need David's attorney for the Revocable Trust now.
In all seriousness, Mr. C is right. I am the same age. I knew dividends were important back in 2003, but just went for Hi-Yield, which were MREITS and thoroughly got destroyed. Then EMH and then it hit me dividends were correct, but just the ones that grow slowly over time.
Not too make an age bias, but how do we do we do different forums: The Silver Sneakers, the Baby Boomers, The Gen X, The Gen Y, and the now I don't know how to talk and can only text someone generation and discuss issues that are more relevant to our age? Me reading about the benefits of Social Security for income is useless when I don't think it will be there.
Just my .02, reinvested.
eyetri2
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
"The price is determined from the average of the high and low for the quarter and from there is given a 5% discount."
So let me see if I understand this. UPS in that 3 month time period hits a high of $50, and now at the end of the time period, happens to be at the low of $30. They average the 2 to get $40 and you get 5% off $40, so at $39.20 versus the $30 it is currently selling at? Wow, that's a bargain.
I personally DRIP because I don't want to have the headache of trying to figure out which is the most undervalued at the current time. And Jim is slightly incorrect. The price can go down as long as the fundamentals don't change. Lower price = more shares to get more dividends. My guess is FTR's fundamentals have changed in 5 years, KO has not.
5+, you are right. If an addendum to this article can be done to say in these 5 years, the stock value of FTR is down 22%, but the income provided has gone up X%, then that gives a more complete picture.
Target's Dividend: Not Just Safe But Expecting Nice Growth Ahead [View article]
I don't understand some of your data. Target has raised their dividend for 43(?) years, according to the CCC list. Also, on a conference call in August, the CEO or CFO made the statement that they want their sales to be 100 billion in 2017 from 66 now, their EPS to be $8 in 2017 vs $4 now, and their annual dividend to be $3 by 2017 vs $1.20 now, corresponding to a roughly 17% CAGR of the dividend. There are a bunch of ifs, but how on earth do you get your #s? It's not even close to what they, on the inside, predict.
Diclosure: I don't own TGT because the current yield is too low, but if it dropped about 20%, I would highly consider it.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
25+ Year streaks
Cut Unchanged Acquire Total
2008 ALL 9 1 3 13
Banks 6 1 0 7
2009 ALL 21 7 2 30
Banks 13 3 0 16
2010-1 ALL 1 5 1 7
Banks 0 2 1 3
All Comp 31 13 6 50
Banks 19 6 1 26
From 8-24 years
Cut Unchanged Acquire Total
2008 ALL 0 1 0 1
Banks 0 1 0 1
2009 ALL 7 6 1 14
Banks 4 4 0 8
2010-1 ALL 3 26 1 30
Banks 2 11 0 13
All Comp 10 33 2 45
Banks 6 16 0 22
Quite simply, looking per year or cumulatively, half the dividend problem children are banks. Food for thought.
eyetri2
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
It's not that hard. On my spreadsheet, I call it PMI: Personal Money Invested. I can see my PMI yield vs current yield, my overall yield based on PMI vs the yield of the current portfolio value, and how many "free" (reinvested dividend) shares vs my original buy.
I think if we go back to David's premise of the article - I don't think most of us are doing this. He said it was his trading platform, not his core platform. The stock zoomed way too fast and he took his PMI out and is letting the rest ride. As long as XOM doesn't have a BP fiasco, he's fine. Kudos, BTW.
From reading enough comments from the usual suspects, I think most of us are similar in concept: We have had enough trying to time the market and worry about the capital gains/losses on a daily basis. To try and time one decision to sell for another to buy is difficult and simply, give enough time, compounding works.
Now don't get me wrong. Between my 5 accounts, I profited nearly 40K from HGIC in 5-6 months. I'll gladly take it, but like David's XOM, it wasn't expected. But I am a holder of stocks at heart. I'm using the chowder idea of seeing month 2010 has more income than same month 2011 and I see no reason for me to sell my Accenture stock when my PMI yield is over 7% and growing at an astonishing dividend rate.
eyetri2
Why Dividend Stock Kinder Morgan Is A Buy And 4 Ancillary Stocks to Sell [View article]
Maybe I am not understanding this. As it stands right now, for every penny increase in the ditribution of KMP/KMR, KMI stands to benefit disproportinately. That I get. Eventually it gets to a point that Kinder Morgan the company can't expand. So far so good.
So you mention the structure has to change to benefit not just Kinder, but all shareholders. So wouldn't it make more sense that the value of KMP and KMR would go up if/when they change the IDR structure? Or is it more of - we don't know if they ever will, so if you want Kinder, buy KMI?
As a corollary, I am looking into NGLS/TRGP. I am thinking it is an interesting area. Do you set up like Kinder or is it different. Which company would you choose between the 2 - the parent or the MLP?
Great stuff.
eyetri2
Abbott: Still A Dividend Growth Stalwart? [View article]
I am holding and think I will be holding the 2 companies for a long time. Now, can we please have a few bear days where The PIIGS totally go into the crapper so I can use my sideline money, then it will be all good.
eyetri2
Abbott: Still A Dividend Growth Stalwart? [View article]
What I find interesting is what James K. said a few articles ago. Like five plus, I like the theory and concepts behind his ideas but don't usually react one way or another. Anyway, didn't he say something to the effect of those who rely strictly on the CCC list as "The Dividend Bible" will be disappointed that many of the companies that are Champions now will not be there 25 years from now? I guess he can say now 1 down, 100 to go.
Eyetri2
Statoil: A Cheap, Stable, Dividend-Paying Bet On Unconventional Oil And Gas [View article]