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When A Higher Yield Leads To Lower Income
- In 2002, McDonald’s had a 1.5% dividend yield as compared to Consolidated Edison’s 5.2% mark.
- As such, it might appear that Consolidated Edison had an overwhelming income advantage.
- This article looks at this “advantage” and provides a cautionary tale for automatically favoring higher yields.
Procter & Gamble Valuation Shortcuts
- Often articles and reports give a single concluding number such as a $98 price target or 9% annual expected returns.
- This is a solid baseline, but lacks the ability to be easily adjusted or tested against varying hypotheses.
- This article tries to create two valuation shortcuts for the reader to independently determine what they believe the future return prospects of Procter & Gamble might be.
Valuation Shortcuts For McDonald's
- Often my articles provide a range of expectations without also including the underlying math.
- This commentary provides three shortcuts to quickly identify whether or not a company is worthy of further research.
- In the end it’s a bit more complicated, but taking a 2-minute high-level view is often more efficient than an in-depth investigation.
Kinder Morgan Inadvertently Names A 'Dividend Growth Starter Kit'
- In a recent article, I detailed Kinder Morgan’s upcoming dividend prospects – which seem quite solid.
- Kinder Morgan’s management provided a comparison of the new entity to nine companies that appear to have similar dividend income prospects.
- This article reviews these nine companies and looks into the possibility of using them as a “dividend growth starter kit”.
AT&T Or Kinder Morgan For Your Retirement Portfolio?
- Kinder Morgan recently announced its dividend plans for the next 6 years or so.
- AT&T is known as a staple among the high-yield, high-consistency dividend payers.
- This article compares the two companies and determines which one might be a better fit for a retirement portfolio.
The High-Yield Vs. Low-Yield Battle
- In two previous articles I reviewed how the highest- and lowest-yielding Dividend Champions got to where they are today.
- This article pits the four highest-yielding companies against the four lowest-yielding companies.
- In the end, it all comes down to the individual company, valuation and expectations.
The Characteristics Of The Highest-Yielding Dividend Champions
- In a previous article, I looked at the lowest-yielding Dividend Champions.
- This article looks at the highest-yielding Dividend Champions.
- It seems that both instances might involve a few trade-offs.
The Characteristics Of The Lowest-Yielding Dividend Champions
- When the “Dividend Champions” are referenced, the higher-yielding securities are frequently the focal point.
- There are 5 Dividend Champions that “currently” yield less than 1%.
- This article looks into the characteristics that these companies share.
Constructing A Monthly Income Portfolio
- When constructing a portfolio investors look at a variety of options including: asset allocation, capitalization size, whether the company pays a dividend and the dynamics of the expected income.
- However, what is often overlooked is the timing of the expected cash flows.
- This article brings this distinction to light and suggests a few methods of dealing with a potential cash flow hiccup.
How Do You Hold Cash When Realty Income Or AT&T Are Available?
- Despite the logical notion that equities tend to be quite profitable over the long-term, many hold cash* and wait for an opportunity.
- *Not only cash, but cash that is above and beyond what one might consider reasonable for an emergency fund.
- Waiting for an opportunity sounds great in theory, but is much harder to accomplish in practice.
- As such, there are many high-yielding alternatives that appear to be a perfectly reasonable alternate to unproductive cash today.
The Comfort In Watching Coca-Cola Decline 25%
- Many take the view that potential price declines far outweigh a company’s dividend yield.
- With a short-term or ephemeral view, this could very well be the case.
- However, as this article indicates, if you have a long-term mindset you should probably be rooting for lower prices.
Ben Graham's Explanation For The Dividend Champions' Premium Valuation
- As a group, longstanding dividend payers routinely demand a premium valuation in the market.
- Conventional wisdom suggests that this is a result of the inherent quality that is involved with owning these companies.
- Ben Graham backs this view up in his book, “The Intelligent Investor”.
- Additionally, this article contends that the higher valuations result from an even more fundamental reason.
Were You Really Owning Walgreen For A Tax Inversion?
- On August 6th Walgreen announced a bevy of news; including acquisition, “tax inversion,” guidance, repurchase and dividend updates.
- The “market” hated the news, sending bids for shares down over 17% from Tuesday’s open.
- However, this seems to be more “hoopla” than a true concern as none of these events appear particularly troubling from a long-term view.
McDonald's Vs. Chevron: All Dividend Yields Are Not Created Equal
- Both McDonald’s and Chevron “currently” yield about 3.4%.
- However, it would be inaccurate to assume that the income produced by each is equivalent.
- This article looks into the idea that all dividend yields are not created equal.
Sherwin-Williams: A Company That's Truly Hard To Buy Today
- In a previous article I demonstrated that the Hershey Company was a solid company that always appeared “overvalued.”.
- The conclusion to that commentary was that shares of Hershey often traded at a premium and thus “paying up for quality” might not be the worst investment thesis.
- At first blush, the Sherwin-Williams Company seems to share a lot of similarities – with a current P/E ratio in the mid-20’s.
- However, this article demonstrates why a bit more caution with Sherwin-Williams could be warranted.
Why It's Hard To Buy The Hershey Company
- The Hershey Company has many iconic brands that regularly demand a solid premium in the marketplace.
- However, by common metrics the business appears to be chronically “overvalued” in comparison to the average firm.
- This article details why this consistent “overvaluation” might not be as large of an obstacle as it seems.
The Day I Held Everything
- A recent SA article detailed how one contributor sold nearly all of his holdings based on fear.
- This article looks at the underlying premise on both a conceptual and mechanical level.
- In the end, once you have a solid group of holdings in place, it appears that “inactivity” can often be a reasonable policy.
Coca-Cola And PepsiCo: Don't Let Short-Term Price Affect Your Long-Term Judgment
- Coca-Cola and PepsiCo recently announced quarterly earnings.
- Afterwards, Coca-Cola shares traded a couple of percent lower while PepsiCo shares traded a couple of percent higher.
- Many might see these moves as indicative of future results.
- However, it’s likely that these short-term movements can cloud your long-term judgment.
Can Dividends Be More Tax-Efficient Than Capital Gains?
Tue, Jul. 22 • 33 Comments
- Long-term capital gains trigger taxes only at the investor’s discretion while dividends must face the taxman every year.
- As such, it could be argued that capital gains are more “tax-efficient” than dividend payouts.
- However, this ideology might be too generalized, as an individual investor’s situation is multi-faceted.
- In this article, I provide an illustration where dividends could be more tax-efficient than capital gains.
Becoming Financially Independent With PepsiCo Dividends
- Upon researching insider rosters, I came across the group at PepsiCo.
- After viewing the holdings, it seems most of the insiders could be financially independent based on their dividend payments alone.
- Seeing this, one might believe this type of cash flow is reserved for the top.
- Yet this article demonstrates how most lasting benefits are merely the result of time and effort.
The 4 Types Of 'Dead Money'
- The phrase 'dead money' is routinely used to describe a poor investment.
- Yet this portrayal is often misguided or at the very least lacking description.
- This article details the 4 types of 'dead money' – simultaneously demonstrating that each can have very different implications.
The Risks Of Being Out Of The Game
- I have previously demonstrated the idea that “all time highs” necessitate neither high valuations nor immediate price declines.
- In the prior commentaries I used specific examples to illustrate this concept.
- This article takes a more generalized approach to reach a similar conclusion.
- In the end, regardless of what you “believe” might happen, the risks of being out of the investing game are far greater than the risks of being in it.
IBM's Future: 4.6% Dividend Yield Or 100% Upside
- IBM has gotten quite a bit of media flack for its lack of revenue growth in recent years.
- However, static revenue growth does not translate to stagnant earnings or per share growth; and it certainly does not automatically stifle dividend growth.
- As a consequence, this article details the power of IBM’s dividend on the company’s future: either a much higher current yield or solid capital appreciation will result.
Take A Profit, Lose Out On The 'Ultimate Bonanza'
- Many are suggesting that the market is too high right now and you can’t go broke taking a profit.
- While it might be rational to expect lower returns in the future, this is certainly not the same thing as negative returns.
- In this article I detail past examples and future possibilities to realign one’s perspective.
Preferred Shares: The Answer To Inconsistent Dividends
- Seeking Alpha contributor Tim McAleenan Jr. has written two first-rate articles on the prospects of holding Annaly Capital over a business cycle.
- His theses are sound; however, some investors might not have the stomach or inclination to be surprised by their yearly investment income.
- As a result, an alternative option might include considering preferred shares in both this security and others.
Why The Dow Hitting 17,000 Doesn't Matter
- The Dow Jones Industrial Average's venture over the 17,000 mark has been well publicized.
- Many go on to suggest that the crossing of this "psychological barrier" has some significance - even indicating it could spur buying behavior.
- This article details why those views might be logically misguided.
Wal-Mart: The Largest Private Company Of The 21st Century
- Wal-Mart is the largest and perhaps most well-known retailer in the world.
- Likewise, the Walton family’s extensive wealth is also well documented.
- What’s not readily apparent is the idea that Wal-Mart could become a private company without doing anything all that spectacular.
Wells Fargo: Revisiting A 'Triple Threat' Investment
- In a previous article, I detailed that WFC had three investing “threats” in its favor: a low dividend payout ratio, earnings growth and a diminished P/E ratio.
- Since that time, shares have advanced steadily – seemingly indicating that the investor of today is “late to the party.”.
- However, the investing benefits of last year remain largely intact today.
Why This Dividend Aristocrat ETF Isn't So Noble
- At first glance, the ProShares S&P 500 Aristocrats ETF appears to be a reasonable fund.
- Yet an investor can likely achieve the same results, while paying less in fees, by owning the individual companies.
- In turn, this "noble" ETF should come with the following cautionary points:
- Target Is The Only 'Above Average' Dividend Champion
- PepsiCo Yields 3.24%, But That's Not The Important Part
- 3 Stocks Near The Dividend Growth Sweet Spot?