Doug Meeks

Dividend growth investing, registered investment advisor, macro
Doug Meeks
Dividend growth investing, registered investment advisor, macro
Contributor since: 2012
Company: Pier LLC
Long HAS, huge holding. Very happy with this report, and the next five years of Star Wars, Marvel, et al... rock solid. Getting it right in the toy space.
Bison, Great point. Add JNJ, MMM and GIS to that list and others like BDX. These guys are doing a great job with the FOREX headwinds, when that changes ( who knows when?) it will be a very positive reporting change for them.
16% cash in aggregate over here. 'A' grade (or above) corporate bonds have a mathematical default rate of about 0% under two years, some of those are putting out 3-4% YTM....just a thought.
Doug
Been adding BRO for months, Long BRO. Nice quarter, looking for more like this. Well done!
Nice quarter. Rock solid core holding here. Long MMM, very LONG staying long. Always adding on dips.
Doug
Coverage ratio has improved, but one quarter is not the whole story. If STAG can post a coverage below 90% for a few quarters then I feel like it will decompress some, and get to a better multiple. I have some solid positions in STAG not selling here, but not buying. Still feel like risk and reward are in balance. I do think they are going to put some good quarters ( coverage ratio improvement) together here it will take several more positive reports to help the market forget the deterioration in coverage that took place over most of 2015.
Good read Mr. Brewer, thanks for taking the time to share.
Doug
Brad, thanks again for your work. Now that's the coverage ratio I'm looking for! I have always considered STAG compensated risk. Upside in balance with the risk that was built-in to the discount while they up-sized their overhead costs, it cost them a flat year of bad price returns, but the dividends were great. We have held through and are very happy with Q3 numbers. Compression like this is often justified but in a few cases when the compression in price is no longer valid the market tends to correct back to the proper multiples of earnings. JNJ is my favorite example of this in my portfolio, if STAG can put together three good quarters the market will 'forget' about the flat earnings for most of 2015. I'm thinking P/FFO of 17-18, or $25-27 a share (quick estimates). STAG is cheap.
Long STAG, best regards, best to all,
Doug
HEP has been a solid holding for us in this energy down cycle. This is a case where diversification did not help. I should have maintained a huge overweight position in HEP for the whole MLP sector, adding PAA and KMI did not mitigate risk. LONG HEP, been LONG, staying LONG.
Thanks for your work, good read.
Doug
Thanks Brad, DLR is a good one. I jumped in with both feet on the pull back to about $60 a few months ago. Was watching a long time, finally got a panic sell off. I don't think that waiting is a good idea for high paying REIT's but when it does happen it's nice to be ready for it. Every investors situation is different, but for some waiting was a good thing. Your coverage of DLR made me very comfortable when it was time to start loading up!
good work,
Thanks always.
I have four clients on table 1, two clients on the other tables. And I have one client that will go this year for the first time and looks like table 1 as well. I wonder how many IRA's end up with beneficiaries on table one? Many of these people don't know what to do with the asset and end up with an advisor, in two table 1 cases I simply take the RMD and put it into a cash account and keep with the dividend growth plan, distributing the divs like paychecks. The others just take the RMD.
My custodians actually report and calculate the RMD requirements for me that's Scottrade and Shareholders Service Group, it's pretty nice to have that service from them.
NV_GARY is 100% correct Table 2 and 3 are more favorable, good comment and great point. I was just thinking about the RMD's I'm managing back into div growth, they are more than the divs, so I do build cash from asset sales (principal).
Doug
MSFT and CINF had rock solid quarterly reports, nice choice DC.
Doug
It's a taxable event no matter what comes out of the IRA, it can save trading fees. Rebel, are you saying you carried lose deductions from an IRA? Can't do that, the same protection on cap gains taxes (none), shields the investor from the only advantage of a loss ( the deduction).
A slow migration to a ROTH is good if available, so is a slow migration to taxable accounts if one can do this with out increasing tax brackets. It really is a cloud of decisions that are best handled on an individual basis, sounds like you guys are doing a solid job.
Doug
Rebel, I agree with you fully. I have run many simulations and switching the RMD (even with tax loss as ordinary income) to a taxable account, with a moderated dividend growth level will still provide a growing income. In the case of very low taxes, like 10/15% brackets things very easy as now the qualified divs are taxed at zero, but even in higher tax brackets the taxes are lower for qualified divs and the small tax hit on the RMD does not offset a moderate div growth. But capital withdrawals will happen. It's very manageable and upsets a dividend growth plan a small amount. Each year the income is still higher and does better as more qualified divs build in the tax advantaged situation outside of the IRA. This discussion does not include the minority of individuals that may have high net worth with IRA's with millions of dollars.
Doug
Varan, It's very important to benchmark. It's also important to try one's best to avoid bias, self deception and strong feelings that lead to less clarity. Benchmarking, even in the light of success in income goals, let's an investor evaluate the decision process that was used to that point.
It's not super simple. If one is doubling the S&P yield as a needed usable income stream, even 'price change plus income' does not fully capture how important the income stream is, but you can easily know what a simple strategy would have done and re-group if needed.
Doug
Not sure you can out pace the RMD scale with dividends, principal will be withdrawn. When you turn 80 the RMD is about 10%, when you turn 83 (average life expectancy) it's about 12% and growing.
Doug
Rock solid, nice to see the beat on revs, most beats these days are still YoY negative. LONG ABC.
Alright, I'm out of the discussion. No time for the non-sincere.
DC, Mr. Fish, RAS, gio, ged,Bob, Chowder..... I love you people. Catch you on the next one.
Regards, always get smarter.
Doug
I know DC. I was just expressing my worry about Walmart. It's a great example and a strong organization, an interesting one to watch.
Doug
G, I'm interested in hearing that as well, PM me if you have time.
Doug
Advisor4, you have made some great points here and been part of a lively constructive discussion. You have given me much to think over, as have others here, like Varan (one of my favorites).
Why would you undo your other solid thoughts here with this comment? Odd.
Regards,
Doug
FAST is a good company, I think they are entering a time of maturing valuation, so the growth is losing some of the multiple. I'm writing cash secured puts on FAST at $33/34. Very low debt, but they seem slightly cyclical. I think of FAST as an adjunct or half size position (2% allocation). The div growth for FAST should be slowing down over the next few years so I like them when the yield is solidly over 3% for near term or current income accounts. I don't cover the others, but been trying the get FAST on a strong pull back, but content with the option premiums (large accounts) from the puts as a yield replacement for the cash. Do your own due diligence please, investing involves risk of loss (total loss), invest only if you can bear the risk. I had to say that.
Doug
David, I worry about Walmart. The efficiency of on-line retailing is a tough competitor, and Amazon is content to go on with little profit. The Walmart shopping experience is highly variable (good and bad and neutral) while the shopping on-line is more like being at home, right? It's very tough for me to see the way forward for Walmart. In that case I think the past is losing relevance. Walmart is an amazing company, but I just remain worried about them, sold them out awhile back even though they did not cut the dividends and now I think I'm worried that I might not be the DG Investor that some claim I am ( joking).
Doug
Chowder, good points, very good. I must comment. I focus on both decisions, total portfolio composition is a different choice than each stock in the portfolio, I want to know in all aspects that my decisions are informed. To decide if I'm succeeding I look at the total portfolio, to improve my thought process, I look at each stock. Finally... I do benchmark with the S&P 500 as a real measurement because while charging for my work, I must be truly honest when addressing the question..... "could I have just invested in the S&P500 and done better than my advisor?"
Guraaf,
I like two REIT's here, VTR and OHI. I like BRO (insurance) and I'm baby stepping into ABC. I think Whole Foods is cheap right now, but that's tough to call a DG stock. Time value is important, sitting around does actually cost money (lost dividends), but one must be very careful in times of strong evaluations.
Doug
mlbaril, keep reading. Some good stuff in here, always check facts and don't make assumptions, go read Bob Wells entire series of articles. Never stop learning. Welcome to Seeking Alpha.
I see those as the same, the percentage of the FFO that is needed to pay the divs. It might be an important word choice to describe it as payout ratio, but I think a little different about REIT's (using FFO) than I do about corporation (using EPS). Good point and well taken here.
DVK...... those calls do come in. People are scared when the price changes. I typically pull out the goals we started with, look at the dividends, show them the road map to growing income. I ask them if we are still meeting the goals we set together. It's takes a long time to be able to balance the income goals with the price changes, the price changes cause high anxiety.
Some investors will listen and stay the course, it's not easy. Some will sell at the bottom, I take those calls. They are very serious calls, telling someone to hold through a correction keeps me up at night. Success on the income growth side is doable, and that success eventually changes the thinking, and helps me sleep some.
Doug
Chowder I did too. I calmly asserted that we might have a correction but nothing was telling me that it was going to be a bad one. Least read, no comments, but chillingly correct. ha! Carry on, nothing to see here.
I hope you are well,
Thanks for your work DVK, you remain an important voice here. Well done. I would offer the you could take the sentence " Inflation sucks......... " and just stop there.
Doug
Splinter, I expect JNJ to average a div growth rate of better than 5% over the next 25 years, but the starting yield for JNJ is rarely 4.8%, very rarely. So blending for higher yield typically lowers the dividend growth rate, but a careful look into the numbers quickly reveals that often the higher yields like SO or ED produce a higher total cash flow over the planned withdrawal period. Time frame is important.
Mr. Honig, nice read. It has been interesting as an Investment Advisor that only provides a dividend growth strategy (in all it's variations) to try to bring investors over the point where daily/monthly/weekly market action is not what is looked too for success. After time, I have learned that this is about 2 years, an investor will become fully committed to a dividend growth plan, until that commitment is in place in the investors mind I have found that short term market action is difficult to bear.
That about 89% dividend coverage ratio based on FFO/share of $0.39.
Divs at $0.3475 ( 3 months of $0.115833) at the new higher rate.
0.3475/0.39 = 0.89
I'm more comfortable, and still love that management did not issue shares during the price dip via the ATM. Nicely done, Long STAG. Want the coverage down more but it's better than last quarter.
Doug
Varan, we agree on this and I agree with the author. Look at Amazon and MSFT for what cloud computing and "open" source stuff is growing like. IBM's growth rate is sub par an represents a smaller and smaller piece of a very important (and led by others) change in computing.
They (IBM) can not change fast enough. We sold at $190 (after the second or third time they could not hold that level) never looked back and why own them?, by the time they get changed, they will have missed the next new thing, right?
I worry about IBM, and IBM owners. Prehaps AI will save them, to risky.
Doug