The Best Utilities For Dividends, Part 2 [View article]
Potentially yes. Utility equity will often look similar to a bond. However, there are several key points to note in that utility equity - there is no obligation to pay a dividend (just very strong tradition). Utility equity should provide some inflation protection. Other aspects that contribute to the bond like nature are the regulated returns of utility equity (note that you should check how much of the business is regulated and how much is not regulated - some utilities have rather sizeable commercial (not regulated) divisions that might engage in wholesale power transactions, retail businesses, etc..).
In a broader point of view rising interest rates should lower the value of most to all instruments as it raises the discount rate that you should use to value the future cash flows. However, there numerous interconnected factors that drive the result. For example, rising interest rates are often associated with an expanding economy which helps on the growth part of the analysis. A growing economy helps equity much more so than bonds (depends on seniority position in the capital structure) since equity gets all the residual profits after obligations to bondholders in rank preference have been met.
I think this is a good comment - to invest in FTR requires the recognition of its challenges and "slow bleed." Upside is the difference between what you pay and the potential, assuming it is realized. A declining company that is appropriately priced could be a good investment. Its just a question of how well are they harvesting the remaining opportunity. However, there is a larger margin for error on growing companies in growing industries.
Cashing In With Dividend Stock ETFs [View article]
Interesting ETF - should note that it has limited assets under management <$200 million and not very much volume traded. It also does not have very much history - but based on the holdings, one should be able to construct the expected dividend growth rate, yields, and other metrics.
I calculated the yield at 3.75% based on 4 x of the last quarterly distribution.
The PC Industry's Powerful New Weapon Against Tablets Is About To Be Unleashed [View article]
This is an interesting article. But I'm not sure I see how fundamental technology improvements will help the PC surpass the tablet? pass the tablet back. It seems like technology has evolved enough so tablets offer sufficient performance and quality graphics to meet needs and desires. Hence the tablet with a smaller footprint is simply better. It seems like a disruptive technology concept. Fundamental technology improvements should also ultimately benefit tablets. Clearly the PC has its purposes and will continue to play a large (but declining) role. Will this technology really convert someone away from using a tablet to using a PC?
Frontier Communications Reaches An Inflection Point [View article]
Seems like its been a great move for Verizon. Albeit one could argue otherwise since they only got $1,800 per access line and FTR is valued above that. albeit, i still can't figure out how it was 4.8 million access lines that were in the announcement. Looking at the actual change in access lines it looks more like 3.8 million which is then valued at $2,263 per access line, which is just below what FTR is valued at today. Note VZ had less broadband and other services so their access lines should be discount. Looks like they got a pretty fair monetization for a diminishing asset in a challenged industry.
Frontier Communications Reaches An Inflection Point [View article]
I would agree. I thought there might have been some cost reductions, but the analysis didn't really show that. The rest of the items are pretty much negatives.
Picking Stocks And Printing Profits [View article]
Investing is a long term game. Losers can turn to winners. Timing matters - this analysis looked at exactly the 11 month holding period. Something that was a winner in that timeframe, might have been a loser over another time period.
Part of my reason to do this type of analysis is to ask the question of which things might be becoming overvalued and which things might be becoming undervalued. I was most interested to see if there was any trend among dividend paying stocks and if correlated to yield.
Picking Stocks And Printing Profits [View article]
I'm a more cautious investor right now. In terms of taking profits, I try to do it within tax advantage accounts.
I see taking profits as more for specific issues (as opposed to broad ETFs, general market) that have had extraordinary returns. An example for me would be back in 2007, I sold half my position in FXI (china ETF) which at the time had more than tripled from my purchase price. While I could have had more profits, it turned out to be a good sale. I had held the position for more than a year too so it wasn't like I was chasing a short term trade.
In contrast, I've been holding SPY in taxed accounts and try to add during downturns. It would take a lot for me to sell that position on notion that the market might decline a bit. Triggers taxes and I'm not necessary going to be right about the decline and then you have decide at some point to re-enter.
If I had enjoyed the run up in NFLX, I would definitely look to take profits. Not a bull on that one.
Picking Stocks And Printing Profits [View article]
These are some great points on the tax considerations. However, the number of MLPs and REITs within this analysis is relatively small. I'm used to counting around 100 MLPs typically in the group. I've not tried to tally the REITs.
You're correct on the 0-1%, I could have labeled that more clearly, but figured since there was a "No dividend" bucket readers would make that assumption.
Your comment on the bankruptcy issue is probably correct. I believe that I mentioned in the article that many of the no dividend stocks were also the very low market cap stocks ($10-100 million).
It would probably be interesting to look at some more metrics - e.g., valuation, revenue growth
Dividend Stock ETFs: Trading Growth For Yield [View article]
Thanks, it was some analysis prompted by a comment and had a very unexpected result. Although in hindsight perhaps it shouldn't have been so unexpected. Some of the ETFs provide easily downloaded data sheets of holdings while others were not so easy to get (e.g., VYM).
I would agree that a portfolio of ETFs might be more optimal.
I don't see how you can assume revenue growth in a company that hasn't had any organic revenue growth for years and continues to lose customers, quarter after quarter. The analyst estimates for 2013 are $4.81 B in rev and then a decline of 4% to $4.62 B. Are you assuming customer growth or per customer revenue growth? I think a sensitivity considering negative growth rates would be very appropriate and would probably make the upside disappear pretty quickly.
You also have a 2% terminal growth rate in the article, but the exhibit shows a 3% figure for the constant growth.
The Best Utilities For Dividends, Part 2 [View article]
In a broader point of view rising interest rates should lower the value of most to all instruments as it raises the discount rate that you should use to value the future cash flows. However, there numerous interconnected factors that drive the result. For example, rising interest rates are often associated with an expanding economy which helps on the growth part of the analysis. A growing economy helps equity much more so than bonds (depends on seniority position in the capital structure) since equity gets all the residual profits after obligations to bondholders in rank preference have been met.
Frontier Communications: Customer Losses Continue [View article]
Frontier Communications: Customer Losses Continue [View article]
Cashing In With Dividend Stock ETFs [View article]
I calculated the yield at 3.75% based on 4 x of the last quarterly distribution.
The PC Industry's Powerful New Weapon Against Tablets Is About To Be Unleashed [View article]
Are Gold Stocks Oversold? [View article]
Frontier Communications Reaches An Inflection Point [View article]
Frontier Communications Reaches An Inflection Point [View article]
Picking Stocks And Printing Profits [View article]
Part of my reason to do this type of analysis is to ask the question of which things might be becoming overvalued and which things might be becoming undervalued. I was most interested to see if there was any trend among dividend paying stocks and if correlated to yield.
Picking Stocks And Printing Profits [View article]
I see taking profits as more for specific issues (as opposed to broad ETFs, general market) that have had extraordinary returns. An example for me would be back in 2007, I sold half my position in FXI (china ETF) which at the time had more than tripled from my purchase price. While I could have had more profits, it turned out to be a good sale. I had held the position for more than a year too so it wasn't like I was chasing a short term trade.
In contrast, I've been holding SPY in taxed accounts and try to add during downturns. It would take a lot for me to sell that position on notion that the market might decline a bit. Triggers taxes and I'm not necessary going to be right about the decline and then you have decide at some point to re-enter.
If I had enjoyed the run up in NFLX, I would definitely look to take profits. Not a bull on that one.
Picking Stocks And Printing Profits [View article]
You're correct on the 0-1%, I could have labeled that more clearly, but figured since there was a "No dividend" bucket readers would make that assumption.
Your comment on the bankruptcy issue is probably correct. I believe that I mentioned in the article that many of the no dividend stocks were also the very low market cap stocks ($10-100 million).
It would probably be interesting to look at some more metrics - e.g., valuation, revenue growth
Dividend Stock ETFs: Trading Growth For Yield [View article]
Dividend Stock ETFs: Trading Growth For Yield [View article]
I would agree that a portfolio of ETFs might be more optimal.
Is Frontier Fairly Valued? [View article]
You also have a 2% terminal growth rate in the article, but the exhibit shows a 3% figure for the constant growth.
Cashing In With Dividend Stock ETFs [View article]