The Dividend Cut And Run - Or Should You Stay? [View article]
What percentage of that 37% were financial stocks and what % were actual cuts? Historically (last 15 years or so), only about 2% of non-financials ($500MM+ cap, 7+ yrs DG) cut divs annually on average. More in recessions, sometimes none is good years. I'm guessing a large chunk were financials, and many were freezes, which in the scheme of things could be considered "good" given the economics of the time. In other research I've done, on average DG stocks that cut their div tended to outperform over the next 2 years, so holding for total return may not be a bad plan. Of course, selling before the cut would be better!
Dividend Growth Models Update: Smaller-Cap Gainers And Decliners [View article]
Yes, I going to be working for a wealth management firm, and will need to curtail my online writing for compliance reasons. Thanks for the positive comments though!
NV Energy Bought By Buffett - Replaced With SCANA In HYLP Model Portfolio [View instapost]
Well, compared to NEE and SRE, it's PE is lower, yield is higher and they all have similar projected earnings growth rates. So based on those numbers, it seems like a better value at the moment.
Are Dividend Investors Concentrating Too Much On Consumer Staples? [View article]
Hi Bruce7b, Your question seems to make the assumption that accepting a dividend implies getting a lower return than a non-dividend stock. There is a lot of research, which I have written about, that shows dividend stocks outperforming the market and non-dividend stocks over the long-term. Based on that, DGI investors can have their dividend and still get a great total return over the long run. The challenge for individuals is picking good companies, as the research bought all stocks within the parameters, something most of us probably can't afford. But that is no different than choosing good non-dividend stocks. Returns always vary due to market timing and selection choices.
I think the main difference for many DGI investors is their objective. They seek the income stream, so are less concerned about the total return (though they would like it to go up!). From that standpoint, yes, they might buy a stock for the current yield and div growth versus the total return potential.
NV Energy Bought By Buffett - Replaced With SCANA In HYLP Model Portfolio [View instapost]
Under the scoring system that I used for the HYLP portfolio, SCG was the next highest utility. Others with close scores were NEE and PPL. NEE has run up and has a lower yield (disclosure: I own shares of it). I've been debating selling it and swapping for another utility. AVA looks interesting and is in a couple of the models.
Are Dividend Investors Concentrating Too Much On Consumer Staples? [View article]
Hi Bruce7b,
I have several DG-based model portfolios that you can read about. While they generally yield over 3.5% (so good for income investors), I am more interested in the total return, as the research I used to create them showed DG stocks outperform over the long run. I published monthly updates that include comparisons to the SPY, beta, max drawdown, and relative performance (volatility adjusted).
After The Dividend Cut: To Buy Or To Sell [View article]
Thanks, Elle. The trick, of course, is to sell BEFORE the dividend cut and pre-cut price drop. Then perhaps buy it back after, at least if one is trying to maximize total return. Since that is easier said than done, assuming one already owns the stock at the time of the cut, holding on or even adding to the position may be appropriate based on the examined data, if one is pursuing total return. For income investors, it will depend on what the new current yield is (versus alternatives), and how confident they feel about that dividend level and the business (could another cut occur?). In either case, I would classify the stock as more speculative until its DG trend is restored.
Thanks, everyone! I appreciate your comments and wishes! I'm planning to work with Phillips & Co, a wealth mgmt firm in Portland. I believe the firm has clients nationwide. Should anyone ever contact the firm, please mention SA. I would be interested in knowing to what extent we are meeting an unserved need for income investors, and if there would be significant value in having an SA presence.
Thanks, Chris. I'm not totally sure what will happen yet, but based on previous conversations, if I do indeed start working for this firm, then sadly, I will probably have to discontinue writing. I appreciate your comments! On the plus side, I will get to further develop the DG models and have access to more research, so that will be good.
More On SDY: Better Than A Mutual Fund? [View article]
Hi Alan,
I track the SPY and SDY against my model portfolios. I only have data since Aug 2011, but SDY has outperformed SPY and with much lower beta and max drawdown. Over the last 3 months, beta has been higher (calculated off of weekly returns).
Why Yield On Cost Matters To Long Term Investors [View article]
Hi Dave,
I agree that both camps tend to be reluctant to change their minds. As I've written about in the past, I fall into the "don't find it useful" for decision-making group. My biggest complaint is the lack of a time component. Having a 20% YOC sounds great, but if it took 20 years to get there, your growth rate wasn't so hot. Also, maybe the dividend grew quickly, then slowed down. Looking at current yield and the DGR would provide better decision making info, in terms of historical metrics, and can be compared against alternative investment opportunities.
An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
Thanks, djrryan. Glad you find the list helpful. I owned BP previously, and sold right when the offshore incident occurred. My gripe with BP is that while the yield has been good, price appreciation lags compared to other major oil companies.
The Dividend Cut And Run - Or Should You Stay? [View article]
Dividend Growth Models Update: Smaller-Cap Gainers And Decliners [View article]
NV Energy Bought By Buffett - Replaced With SCANA In HYLP Model Portfolio [View instapost]
Are Dividend Investors Concentrating Too Much On Consumer Staples? [View article]
Your question seems to make the assumption that accepting a dividend implies getting a lower return than a non-dividend stock. There is a lot of research, which I have written about, that shows dividend stocks outperforming the market and non-dividend stocks over the long-term. Based on that, DGI investors can have their dividend and still get a great total return over the long run. The challenge for individuals is picking good companies, as the research bought all stocks within the parameters, something most of us probably can't afford. But that is no different than choosing good non-dividend stocks. Returns always vary due to market timing and selection choices.
I think the main difference for many DGI investors is their objective. They seek the income stream, so are less concerned about the total return (though they would like it to go up!). From that standpoint, yes, they might buy a stock for the current yield and div growth versus the total return potential.
NV Energy Bought By Buffett - Replaced With SCANA In HYLP Model Portfolio [View instapost]
Are Dividend Investors Concentrating Too Much On Consumer Staples? [View article]
I have several DG-based model portfolios that you can read about. While they generally yield over 3.5% (so good for income investors), I am more interested in the total return, as the research I used to create them showed DG stocks outperform over the long run. I published monthly updates that include comparisons to the SPY, beta, max drawdown, and relative performance (volatility adjusted).
Jeff
After The Dividend Cut: To Buy Or To Sell [View article]
Dividend Growth Models Update: Dividend Aristocrat+ Gainers And Decliners [View article]
Dividend Growth Models Update: Dividend Aristocrat+ Gainers And Decliners [View article]
Dividend Growth Models Update: Dividend Aristocrat+ Gainers And Decliners [View article]
Dividend Growth Models Update: Dividend Aristocrat+ Gainers And Decliners [View article]
Dividend Growth Models Update: Dividend Aristocrat+ Gainers And Decliners [View article]
More On SDY: Better Than A Mutual Fund? [View article]
I track the SPY and SDY against my model portfolios. I only have data since Aug 2011, but SDY has outperformed SPY and with much lower beta and max drawdown. Over the last 3 months, beta has been higher (calculated off of weekly returns).
http://seekingalpha.co...
Why Yield On Cost Matters To Long Term Investors [View article]
I agree that both camps tend to be reluctant to change their minds. As I've written about in the past, I fall into the "don't find it useful" for decision-making group. My biggest complaint is the lack of a time component. Having a 20% YOC sounds great, but if it took 20 years to get there, your growth rate wasn't so hot. Also, maybe the dividend grew quickly, then slowed down. Looking at current yield and the DGR would provide better decision making info, in terms of historical metrics, and can be compared against alternative investment opportunities.
An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]