AT&T: Strong Dividend Yield With Support [View article]
I used history back to around 1984, so it reflects some pure SBC results as well. Looking at the last 10 years (~40 data points) showed a correlation around 60% which is decent, but not amazing.
One key thing to remember with correlations is that it is related to the R-squared of a regression,where the R-squared is a measure of the amount of variation in return explained by the regression variable (dividend yield). A 60% correlation means that 60% x 60% = 36% of the variation is explained by the variable (in this case dividend yield). A 40% correlation would mean just 20% of the return is explained by the dividend yield. So there is other stuff that accounts for the other 80%.
So the take away of the article is that high yields for some stocks are more indicative of future good returns than for other stocks. It might be part of an argument to invest in a VZ or T where there is some relationship. It should not be considered for a PFE where there was no relationship whatsoever. Again, this should be done in conjunction with fundamental analysis.
Is Darden Restaurants A Better Stock Than McDonald's For Dividends? [View article]
You're correct, the article was not intended to be either/or. Rather, using MCD as a benchmark, how does DRI compare. I don't see MCD has an incredible bargain right now, but I would never consider shorting it right now either.
Is Darden Restaurants A Better Stock Than McDonald's For Dividends? [View article]
I just noticed the text refers to 2010, while the table correctly refers to 2011 for 37%. I've sent a correction in on this.
You are correct though that the most recent quarterly results are available and hence your latest 12 months will be different from my figures which use the fiscal years (end of May).
I think you have some mistakes on your section on efficiencies. I think you might be confusing cell efficiencies and module efficiencies. Current FSLR modules are at around 11.7% efficient from their analyst/earnings presentations. FSLR also only just recently celebrated achieving a 17.3% cell efficiency this summer http://bit.ly/oKPzyH/
Cell efficiencies are typically 3-4% higher than module efficiencies due to losses, shading, glass used in assembling the module from individual cells. FirstSolar only expects to get to 13.5% to 14.5% module efficiencies in 2014. This is much lower than your projections, but represents significant improvement. Back in 2008, FSLR was still at around 10.7% module efficiency.
Also on the Chinese market, there are a lot of module manufacturer's that STP would still have to compete with (Yingli, Trina, etc..) to win that business. Furthermore, the U.S. is projected to become the largest solar market for installations, despite being only fourth right now.
AT&T: Strong Dividend Yield With Support [View article]
ddpddpddp, Great question and I should put a better explanation into the articles. The first graph (T trailing) is simply a plot of the historical dividend yield. For each ex-dividend date, I look at the trailing twelve months dividend and divide by the closing stock price on the date. I then also plot the 10-year treasury yield for comparison. The green line is just the difference to the yield. It does vary over time. Note that Trailing Dividend yields, Current Dividend yield and forward dividend yield can all be different. The Forward Dividend is based on my projections and is $1.75 per year. The current dividend would be 4 x the most recent payment or $1.72. The trailing twelve months would take the most recent four and sum them together: $1.71 in this case. Hence when dividing by the closing stock price you would get slightly different yields.
You've pointed out a feature in the second graph (T normalized) that is a result of the historical T dividend. T Normalized takes the historical prices, dividends, and yields and compares each to the value at the start of the graph. This allows you to see relative changes. For example, it might be the dividends have doubled in value while the stock price has only gone up 50%. It shows if there are any fluctuations. It shows if the dividends exhibit continuous growth. In this case it shows that dividends are now at about 130% of what they were earlier, while the stock price is at 115%. This means the yield should be around 130%/115%= 113%, a shade lower. Why look at this graph? This is the follow up graph to the first one that shows dividend yield and answers the question is the dividend yield going up because dividends are increasing or because the stock price is decreasing. For example, FTR has a rising dividend yield due to a declining stock price.
The mirror image occurs because the dividends have been relatively flat over time. So when the price goes up, the yield falls proportionately and vice versa.
This article shows more interesting normalized graphs. In some sections you have a flat dividend which will cause the mirror image effect. Another section has an increasing dividend with an increasing stock price resulting in the yield looking relatively flat. http://seekingalpha.co...
AT&T: Strong Dividend Yield With Support [View article]
ma11hew, I actually did some analysis and looked at 1 year returns compared to current yield for a variety of stocks. For telecoms like T and VZ there is some correlation meaning that high yield has historically indicated higher returns - accounting for your reversion to the mean comment. I also looked at DIA. However, overall it was not super compelling. The results are in the following article:
Seadrill: High Valuation Relative To Its Competitors [View article]
When making fundamental assessments, current price analysis is independent of historical performance so there is nothing wrong with comparing SDRL performance to the S&P and then discussing its current valuation relative to competitors. They are two separate items.
In terms of performance, RIG was down 13%, NE was down 10% and ESV was down 15% over the same time frame that SDRL was down 13%. This is pretty comparable to the others.
Is Reynolds American's Dividend Safe? [View article]
I agree with you. Finding good opportunities takes significant work. Often first pass analysis simply helps to identify the key issues - in this case market/regulatory environment. Another key for dividend stocks is that the low interest rate environment, makes a lot things look mathematically attractive - but among those which are the best opportunities - requires more research.
Seadrill: High Valuation Relative To Its Competitors [View article]
7 Drillships (of which 3 under construction) 1 harsh env. 6 ultra deep-water 12 Semisubmersibles (of which 2 under construction) 6 harsh env. 8 ultra deep-water 21 Jack ups (of which 6 under construction) 2 harsh env. 19 Tender and semi tender rigs (of which 3 under construction) Total is 59 units including ones under construction.
Why I Am Short The U.S. Solar Industry [View article]
Industry contraction is hard to judge though since prices are falling rapidly. The contraction was a reference to declining revenue at FSLR, which I would expect to see at other manufacturers, but they still might have increased shipments in terms. However, one would expect to see quite a bit of activity this Q4 as developers rush to qualify for the cash grants.
Why I Am Short The U.S. Solar Industry [View article]
You have a lot of incorrect statements in this article. NRG does not manufacture solar modules. They are an asset developer and a utility. There is an enormous difference. FirstSolar also has posted positive gross margin in each of the last four quarters. Their production costs are substantially below $1 per Watt - go look at their quarterly earnings presentations. It is true that the industry is contracting and federal support looks to be waning since the 1603 Cash Grants (in lieu of the Investment Tax Credit) will expire at the end of this year and it seems doubtful that it will be extended again. Note that the cash grant benefits asset developers which hence indirectly benefits module manufacturers.
AT&T: Strong Dividend Yield With Support [View article]
One key thing to remember with correlations is that it is related to the R-squared of a regression,where the R-squared is a measure of the amount of variation in return explained by the regression variable (dividend yield). A 60% correlation means that 60% x 60% = 36% of the variation is explained by the variable (in this case dividend yield). A 40% correlation would mean just 20% of the return is explained by the dividend yield. So there is other stuff that accounts for the other 80%.
So the take away of the article is that high yields for some stocks are more indicative of future good returns than for other stocks. It might be part of an argument to invest in a VZ or T where there is some relationship. It should not be considered for a PFE where there was no relationship whatsoever. Again, this should be done in conjunction with fundamental analysis.
An Industry Scan: Finding Bargains Among The Market Wreckage [View article]
Is Darden Restaurants A Better Stock Than McDonald's For Dividends? [View article]
Is Darden Restaurants A Better Stock Than McDonald's For Dividends? [View article]
You are correct though that the most recent quarterly results are available and hence your latest 12 months will be different from my figures which use the fiscal years (end of May).
Suntech Power Vs. First Solar [View article]
Cell efficiencies are typically 3-4% higher than module efficiencies due to losses, shading, glass used in assembling the module from individual cells. FirstSolar only expects to get to 13.5% to 14.5% module efficiencies in 2014. This is much lower than your projections, but represents significant improvement. Back in 2008, FSLR was still at around 10.7% module efficiency.
Also on the Chinese market, there are a lot of module manufacturer's that STP would still have to compete with (Yingli, Trina, etc..) to win that business. Furthermore, the U.S. is projected to become the largest solar market for installations, despite being only fourth right now.
AT&T: Strong Dividend Yield With Support [View article]
Great question and I should put a better explanation into the articles. The first graph (T trailing) is simply a plot of the historical dividend yield. For each ex-dividend date, I look at the trailing twelve months dividend and divide by the closing stock price on the date. I then also plot the 10-year treasury yield for comparison. The green line is just the difference to the yield. It does vary over time. Note that Trailing Dividend yields, Current Dividend yield and forward dividend yield can all be different. The Forward Dividend is based on my projections and is $1.75 per year. The current dividend would be 4 x the most recent payment or $1.72. The trailing twelve months would take the most recent four and sum them together: $1.71 in this case. Hence when dividing by the closing stock price you would get slightly different yields.
You've pointed out a feature in the second graph (T normalized) that is a result of the historical T dividend. T Normalized takes the historical prices, dividends, and yields and compares each to the value at the start of the graph. This allows you to see relative changes. For example, it might be the dividends have doubled in value while the stock price has only gone up 50%. It shows if there are any fluctuations. It shows if the dividends exhibit continuous growth. In this case it shows that dividends are now at about 130% of what they were earlier, while the stock price is at 115%. This means the yield should be around 130%/115%= 113%, a shade lower. Why look at this graph? This is the follow up graph to the first one that shows dividend yield and answers the question is the dividend yield going up because dividends are increasing or because the stock price is decreasing. For example, FTR has a rising dividend yield due to a declining stock price.
The mirror image occurs because the dividends have been relatively flat over time. So when the price goes up, the yield falls proportionately and vice versa.
This article shows more interesting normalized graphs. In some sections you have a flat dividend which will cause the mirror image effect. Another section has an increasing dividend with an increasing stock price resulting in the yield looking relatively flat.
http://seekingalpha.co...
AT&T: Strong Dividend Yield With Support [View article]
I actually did some analysis and looked at 1 year returns compared to current yield for a variety of stocks. For telecoms like T and VZ there is some correlation meaning that high yield has historically indicated higher returns - accounting for your reversion to the mean comment. I also looked at DIA. However, overall it was not super compelling. The results are in the following article:
http://seekingalpha.co...
Seadrill: High Valuation Relative To Its Competitors [View article]
In terms of performance, RIG was down 13%, NE was down 10% and ESV was down 15% over the same time frame that SDRL was down 13%. This is pretty comparable to the others.
Is Reynolds American's Dividend Safe? [View article]
Seadrill: High Valuation Relative To Its Competitors [View article]
12 Semisubmersibles (of which 2 under construction) 6 harsh env. 8 ultra deep-water
21 Jack ups (of which 6 under construction) 2 harsh env.
19 Tender and semi tender rigs (of which 3 under construction)
Total is 59 units including ones under construction.
PriceSmart: Still Delivering Strong Operating Performance [View article]
Seadrill: Large Dividend Yield, Slowing Growth [View article]
Why I Am Short The U.S. Solar Industry [View article]
Why I Am Short The U.S. Solar Industry [View article]
Why I Am Short The U.S. Solar Industry [View article]