The Type Of Dividend Stocks You Should Put In A Roth IRA [View article]
Mike
Good point and I agree. I also put in my Roth any short term investments/trades that I might enter so that capital gains taxes aren't an issue when considering selling. But that's only with a small portion of my portfolio since the majority of it is long term DGI holdings.
Good first article and has generated some excellent commentary and good food for thought. And who knows, those floppy disks may become collectors items. :) Looking forward to more articles.
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
hwood
I see that, as of July 2nd it'll move over to the MarketWatch.com site. Thanks for the tip. It's still working I suppose until then but you have to enter in the current EPS & EPS growth rate, which is easy enough to do. Once it moves I imagine it'll be under the investing/tools tab on their site. Thanks for letting us know about this.
Very good. I really enjoyed reading this article. And I like your list of 6 questions to ask before selling. Along with Peter Lynch you might want to read "Uncommon Stocks and Uncommon Profits" by Philip A. Fisher. Just a suggestion.
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Rich
Thanks. I guess the way I look at going deep into due-diligence is like a quote I heard years ago, not exactly sure where I heard it, but it said, "you have to sift through a lot of dirt to find gold." And gold can be that nugget of information that says don't buy this as well as that nugget that says do buy this.
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
CDGI
Thanks. I'm glad you enjoy my articles and hope I can keep them coming. See my response to Smallstep above on the REIT question. I hope it helps. Best of luck!
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Hi Small
Thanks. I appreciate your comments and am glad you enjoyed the article.
In regard to the comment about evaluating REIT's such OHI as compared to a C corporation such as McDonalds let me see if this helps.
When we evaluate a company such as McDonalds, we look at financial numbers such as dividend yield, payout ratio's, dividend growth rates, EPS, and so forth. In looking at earnings per share we want to look at operating earnings to make sure that they are growing enough to support the business, the growth of the business, and for paying dividends. The reason we do this is because dividends are ultimately paid from earnings. After expenses are taken out of earnings we can then look at net income and can work on down to cash flow and free cash flow. But the point is that we want to make sure that the company is profitable enough for us to invest in so that we can be assured that the dividends we want to receive are safe.
With REIT's though it is a little different. REIT's have a different tax status and because of that they are not required to pay tax on their income. And since they don't pay tax on the income they are required by law to pay out 90% of their net income as dividends to their investors. That means that when we evaluate them the net income is going to be treated differently on their financial statements than the net income would on McDonalds financial statements, so it doesn't have the same value to us. Because of that we use funds from operations, commonly called FFO, to evaluate them by rather than the measures we use for C corporations (like McDonalds). You want to make sure there is sufficient FFO to meet their payout obligations and that the FFO growth rate can support not only the 90% payout but growth of the REIT.
There are other things to evaluate as well with REIT's such as debt, tenant capacity and tenant turnover, that they have good management, net asset value or NAV, and of course making sure you are getting a good entry price. Of course there are similarities to evaluating REIT's and C corps also.
I suggest reading Brad Thomas' articles in the REIT section of SA since he typically provides a lot of detail in his suggestions. I'm sure there are other authors who do as well. That would help you get familiar with the things they're concerned with. And if you want to get into it in detail you might try a book by Ralph L. Block titled "Investing In REIT's." Be sure to get the latest edition, 4th I think. It's about 400 pages or so and goes in to a lot of detail.
I hope this helps and I appreciate your feedback on my article. Thanks for reading and best of luck with your investing.
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
heglimp
Thanks. I'm glad you enjoyed it. I understand the good days and bad days. I try to take the attitude that every day is a good day if you're on the top side of the grass. I appreciate the kind words and thanks for commenting.
Future Retirees - Build Your Retirement Portfolio On A Firm Foundation [View article]
Angelo
Thanks. I'm glad you enjoyed it. It appears you're at an opportune time to be thinking about retirement, which is young and able to create great long term plans to get there. That's as opposed to too many who wait until almost there and then realize they need to do something. Sometimes circumstances may force that but you're headed in the right direction, which is starting young. Best of luck.
Dividend Growth Stocks Of Tomorrow: Investing For The Next 25 Years [View article]
Justin
Welcome to SA and congratulations on your first article. I think you'll find the D&I forum here a great place to hang out for good information and discussions. Good food for thought in your article as well. Best of luck with your investments.
The Type Of Dividend Stocks You Should Put In A Roth IRA [View article]
Good point and I agree. I also put in my Roth any short term investments/trades that I might enter so that capital gains taxes aren't an issue when considering selling. But that's only with a small portion of my portfolio since the majority of it is long term DGI holdings.
Eddie
Taking Care Of Grandma's Money [View article]
Good first article and has generated some excellent commentary and good food for thought. And who knows, those floppy disks may become collectors items. :) Looking forward to more articles.
Eddie
The Type Of Dividend Stocks You Should Put In A Roth IRA [View article]
Reminds me of what it felt like under the sleeping bag when I used to camp out with my sons when they were young boys.
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
I see that, as of July 2nd it'll move over to the MarketWatch.com site. Thanks for the tip. It's still working I suppose until then but you have to enter in the current EPS & EPS growth rate, which is easy enough to do. Once it moves I imagine it'll be under the investing/tools tab on their site. Thanks for letting us know about this.
Eddie
Chowder Rule Vs. Figure Of Merit [View article]
Is that a typo?
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
You're welcome.
Eddie
Is Now The Time To Sell? [View article]
Very good. I really enjoyed reading this article. And I like your list of 6 questions to ask before selling. Along with Peter Lynch you might want to read "Uncommon Stocks and Uncommon Profits" by Philip A. Fisher. Just a suggestion.
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Thanks. I guess the way I look at going deep into due-diligence is like a quote I heard years ago, not exactly sure where I heard it, but it said, "you have to sift through a lot of dirt to find gold." And gold can be that nugget of information that says don't buy this as well as that nugget that says do buy this.
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Thanks and thanks for following. I hope my articles have been helpful or at least food for thought. Best of luck with your investments.
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Thanks. I'm glad you enjoy my articles and hope I can keep them coming. See my response to Smallstep above on the REIT question. I hope it helps. Best of luck!
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Thanks. I appreciate your comments and am glad you enjoyed the article.
In regard to the comment about evaluating REIT's such OHI as compared to a C corporation such as McDonalds let me see if this helps.
When we evaluate a company such as McDonalds, we look at financial numbers such as dividend yield, payout ratio's, dividend growth rates, EPS, and so forth. In looking at earnings per share we want to look at operating earnings to make sure that they are growing enough to support the business, the growth of the business, and for paying dividends. The reason we do this is because dividends are ultimately paid from earnings. After expenses are taken out of earnings we can then look at net income and can work on down to cash flow and free cash flow. But the point is that we want to make sure that the company is profitable enough for us to invest in so that we can be assured that the dividends we want to receive are safe.
With REIT's though it is a little different. REIT's have a different tax status and because of that they are not required to pay tax on their income. And since they don't pay tax on the income they are required by law to pay out 90% of their net income as dividends to their investors. That means that when we evaluate them the net income is going to be treated differently on their financial statements than the net income would on McDonalds financial statements, so it doesn't have the same value to us. Because of that we use funds from operations, commonly called FFO, to evaluate them by rather than the measures we use for C corporations (like McDonalds). You want to make sure there is sufficient FFO to meet their payout obligations and that the FFO growth rate can support not only the 90% payout but growth of the REIT.
There are other things to evaluate as well with REIT's such as debt, tenant capacity and tenant turnover, that they have good management, net asset value or NAV, and of course making sure you are getting a good entry price. Of course there are similarities to evaluating REIT's and C corps also.
I suggest reading Brad Thomas' articles in the REIT section of SA since he typically provides a lot of detail in his suggestions. I'm sure there are other authors who do as well. That would help you get familiar with the things they're concerned with. And if you want to get into it in detail you might try a book by Ralph L. Block titled "Investing In REIT's." Be sure to get the latest edition, 4th I think. It's about 400 pages or so and goes in to a lot of detail.
I hope this helps and I appreciate your feedback on my article. Thanks for reading and best of luck with your investing.
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
Thanks. I'm glad you enjoyed it. I understand the good days and bad days. I try to take the attitude that every day is a good day if you're on the top side of the grass. I appreciate the kind words and thanks for commenting.
Eddie
Future Retirees - Build Your Retirement Portfolio On A Firm Foundation [View article]
Thanks. I'm glad you enjoyed it. It appears you're at an opportune time to be thinking about retirement, which is young and able to create great long term plans to get there. That's as opposed to too many who wait until almost there and then realize they need to do something. Sometimes circumstances may force that but you're headed in the right direction, which is starting young. Best of luck.
Eddie
Avoiding Tunnel Vision In Your Dividend Growth Investing - Part 2 Retirement [View article]
You're very welcome and I hope the links are of service. Thanks for reading and commenting.
Eddie
Dividend Growth Stocks Of Tomorrow: Investing For The Next 25 Years [View article]
Welcome to SA and congratulations on your first article. I think you'll find the D&I forum here a great place to hang out for good information and discussions. Good food for thought in your article as well. Best of luck with your investments.
Eddie