Retirement Income For Life: Annuities Or Dividends? [View article]
Thanks for providing actual numbers. That helps to quantify the value of the annuity, though obviously it depends on one's lifespan too. At the end of the day, I think does come down to how well a person can manage their investments and how much risk s/he is willing to take. Yes there is a cost to the annuity, but you are buying the security of a guaranteed inflation-adjusted income stream without any worries of market fluctuations that could erode your principal and possibly impact the stream (i.e. div cuts, dipping into principal during down markets). There is probably some value in having some funds in an annuity, though in my parents' case, they have a corporate pension and Soc Security, so that is their annuity component.
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Thanks. One correction…the 25+ stocks are the Champions, and the 0-9's are the Challengers.
Comparing your last list (Contenders/Champions) to my Income Growth screen, most of those stocks made my list as well. The exceptions were MXIM and MCHP due to low 1-yr DGR (I screened for more consistent payers in the 6-12% range), and CWCO for low 5-yr DGR. All the rest made the cut, though the final portfolio of 30 opted for those with higher yields and weighted sectors based on market cap and representation in the screened universe. I focused on stocks with 10+ yrs of DG, so can't speak to the Challengers, though I do own INTC. Nice to know that two different systems can produce the same list. :-) Hopefully that bodes well for us!
Retirement Income For Life: Annuities Or Dividends? [View article]
A 10% annual return would probably be considered on the high side, and certainly involve more risk-taking. The more typical expectation I've seen is between 7-8%, which is what many pension funds assume. With the current low interest/bond rates though, even this is falling. I would go with 7.5%, and if you get 10%, bonus. Plan conservatively to ensure you get where you want to be by retirement. If you do better, then you could retire earlier! :-)
I think FivePlus Investor follows Canadian REITS/MLPs, not sure about stocks.
Lorillard and Chubb: When Stock Buybacks Work [View article]
I don't know if you can blame the buyback for the company's issues. Had they paid it as a dividend, any investors who re-invested the money would have suffered the same loss from the price decline. Those who just take the cash at least would have had the cash plus whatever the stock was worth. It is accurate to say that many companies do not time their buybacks well, hence the value from such actions is questionable. EPS will still increase due to fewer shares, but if they are overpaying for the shares, it's likely still a net negative.
In terms of the flexibility issue, buybacks provide more flexibility for the firms. If they paid much higher dividends instead, there would be an expectation for them to maintain that level. Investors punish stocks that cut divs. Therefore it is safer to have a lower dividend and use some of the excess cash for buybacks. The buyback amount will fluctuate each quarter, but the dividend is constant and hopefully is raised each year.
Retirement Income For Life: Annuities Or Dividends? [View article]
There may be some truth to that, Robert, but I think it also has to do with the lack of financial education in this country, a large percentage of the population being in low-paying (under $50K) jobs (hard to cover a family's bills on that and save), and perhaps mostly, due to our society's short-term thinking. By this I mean the "need" to buy every latest gizmo and other stuff we don't really need, and doing so on credit to boot. I've known many people living month-to-month…seriously need to get priorities in the right order. Now, the fact that there is Social Security may be part of the reason some people feel they can ignore saving for the future. I'd like to think that education could help overcome this, but advertisers and credit card firms seem to be winning…maybe should buy Visa and MC?
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Hi DM,
I did a writeup on LMT this summer. The debt load and pension costs were two concerns, as was reduced defense spending and a preference by the govt for LMT to assume more overrun costs. Recent news headlines mentioned the pension and cost-plus contract concerns. However, despite these issues, the dividend seemed safe (low payout), though now they just raised it by $1. Defense spending won't disappear, and there are just a handful of firms that do this business (oligopoly). However, I don't see significant growth for the stock. If you just want a place to park some money for a 5% yield, it may be fine. Though if the Stockholder Equity goes negative, it could possibly impact the dividend. As I recall, the pension cost is part of the cause of the low equity value. I know others on SA have mentioned RTN, and I like UTX and BA.
Dogs Of The Dow Vs. Dividend Aristocrats [View article]
I'm not big on the Dogs strategy. Looking at the list of 10, half of those stocks are either in Pharma or Telecom. I need more diversity than that. I'm tracking four model portfolios based on the CCC list (Aristocrats, Small Cap CC, IncGrowth, and then an active mgmt version of the IncGrowth). Since mid-August, all but the small cap are beating the S&P by 2 to 3.5 percentage points. Small cap got hit by ORRF cutting its div today, and the passive IncGro got hit by AVP having issues. Dogs is a little simpler than my screens, so I can see the appeal, but you can also just buy SDY.
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
And right on AVP, though more so because they are now under SEC investigation (20% drop today). The article does note the concern of FCF not covering dividends though.
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
Looks like the model was right on ORRF, but wrong on MDP (they just raised it 50%!). The signal for MDP was actually back in Aug though, and the price did fall another 12-15% before the recent upswing. A question then becomes is there a signal for getting back in before the upswing, though this system wasn't meant to be a market timing tool in both directions. It's more for avoiding losses. SFG has also rebounded, though it dropped 10% after the signal before heading up upon its earnings report. SFG and MDP had low payout ratios, so again, additional factors might help to improve this model.
Bushes And Birds: A Different Perspective On Stocks And Dividends [View article]
When I taught middle school math, I always included a two-month unit on finance and consumer math. I think it's a crime that schools don't teach children more about money, savings, credit, taxes, investing, etc. The students loved doing one of those stock market simulations, and actually, they uncovered a lot of good long-term buys (like Google when it was under $100). Great discussions about what makes a company "good", why to diversify, and they got an eye-opener about how much of one's hard earned money goes to government. Funny how some of the socialist-types suddenly changed sides. They also started watching the news and reading the finance section; parents said they had interesting dinner conversations. Of course, a few went off the deep-end and became day-traders, but they tended to lose a lot and that made for a good discussion too!
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Hi investor952:
If you look at a prior article of mine, I listed some MLPs/Financials/REITs that passed similar criteria (10+ yrs, 6-12% DGR, 3%+ Yield, payout covered by CF/Earnings). If you're looking for a few specific picks, it might be of interest.
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Interesting method. A couple observations…the Top 12 has a bit of a slant toward Defense firms, which may be in for some headwinds, hence the previous high DGR (during war times) may not apply going forward. I would be curious to see the sector percentages for the entire 50-stock universe.
Also, with one exception, the Top 12 are all Dividend Challengers (under 10 yrs of DG), so less history for these names. How many on the list of 50 are Challengers vs Contender/Champions? I wonder what names would be the Top 12 if you exclude the Challengers and focus on the other two groups. I wrote about some research that showed DG stocks with 10+ yrs of growth outperformed the market over time, so I have concentrated more on those groups, though I own some Challengers. Disclosure: Long INTC.
Ingersoll-Rand Offering Generous Total Return Potential [View article]
IR could be an interesting play, though I'd like to hear more about the company's story, not just the numbers. I like competitor Gardner Denver more…compelling story/strategies, and they continue to execute it very well. Record earnings and backlog, and another quarter with higher margins. See my article from July with the details:
Retirement Income For Life: Annuities Or Dividends? [View article]
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Comparing your last list (Contenders/Champions) to my Income Growth screen, most of those stocks made my list as well. The exceptions were MXIM and MCHP due to low 1-yr DGR (I screened for more consistent payers in the 6-12% range), and CWCO for low 5-yr DGR. All the rest made the cut, though the final portfolio of 30 opted for those with higher yields and weighted sectors based on market cap and representation in the screened universe. I focused on stocks with 10+ yrs of DG, so can't speak to the Challengers, though I do own INTC. Nice to know that two different systems can produce the same list. :-) Hopefully that bodes well for us!
Retirement Income For Life: Annuities Or Dividends? [View article]
I think FivePlus Investor follows Canadian REITS/MLPs, not sure about stocks.
Lorillard and Chubb: When Stock Buybacks Work [View article]
In terms of the flexibility issue, buybacks provide more flexibility for the firms. If they paid much higher dividends instead, there would be an expectation for them to maintain that level. Investors punish stocks that cut divs. Therefore it is safer to have a lower dividend and use some of the excess cash for buybacks. The buyback amount will fluctuate each quarter, but the dividend is constant and hopefully is raised each year.
Retirement Income For Life: Annuities Or Dividends? [View article]
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
I did a writeup on LMT this summer. The debt load and pension costs were two concerns, as was reduced defense spending and a preference by the govt for LMT to assume more overrun costs. Recent news headlines mentioned the pension and cost-plus contract concerns. However, despite these issues, the dividend seemed safe (low payout), though now they just raised it by $1. Defense spending won't disappear, and there are just a handful of firms that do this business (oligopoly). However, I don't see significant growth for the stock. If you just want a place to park some money for a 5% yield, it may be fine. Though if the Stockholder Equity goes negative, it could possibly impact the dividend. As I recall, the pension cost is part of the cause of the low equity value. I know others on SA have mentioned RTN, and I like UTX and BA.
http://seekingalpha.co...
Dogs Of The Dow Vs. Dividend Aristocrats [View article]
http://seekingalpha.co...
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
Bushes And Birds: A Different Perspective On Stocks And Dividends [View article]
Bushes And Birds: A Different Perspective On Stocks And Dividends [View article]
Meredith Corporation: Dividend Stock Analysis [View article]
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
If you look at a prior article of mine, I listed some MLPs/Financials/REITs that passed similar criteria (10+ yrs, 6-12% DGR, 3%+ Yield, payout covered by CF/Earnings). If you're looking for a few specific picks, it might be of interest.
http://seekingalpha.co...
Improved Quantitative Strategy For Selecting The Best Dividend Growth Stocks [View article]
Also, with one exception, the Top 12 are all Dividend Challengers (under 10 yrs of DG), so less history for these names. How many on the list of 50 are Challengers vs Contender/Champions? I wonder what names would be the Top 12 if you exclude the Challengers and focus on the other two groups. I wrote about some research that showed DG stocks with 10+ yrs of growth outperformed the market over time, so I have concentrated more on those groups, though I own some Challengers. Disclosure: Long INTC.
Ingersoll-Rand Offering Generous Total Return Potential [View article]
http://seekingalpha.co...