Norman Tweed

Dividend growth investing, oil & gas, utilities
Norman Tweed
Dividend growth investing, oil & gas, utilities
Contributor since: 2011
Thanks kpbarbee for your reading of my work. David Fish performs the calculation of (yield + 5yr dividend growth rate)-ttm PE to come up with his Tweed Factor column number. For example: 1st Source $SRCE: PE=13.55; yield=2.38; 5yr DGR=3.9;
Tweed Factor=(2.38+3.9)-13.5...
I hope this helps.
Thanks Five Plus Investor for this great interview on my favorite contributors. I, too was burned by LNCO and am still holding--I should have gotten out before they suspended the dividend. Taking RMDs now requires cash flow and these high yield investments provide it. However, quality especially in BDCs and mREITs is very desirable. With PSEC, AGNC, MTGE as my primary RMD suppliers, I have enough cash flow for a younger required distribution recipient. However, the amount taken goes up each year and therefore, I am trying to get up to 25% of the portfolio in high yield. Every time I get close, a dividend cut comes along--like LNCO.
Thank you Tom Au for this interesting political article. I like the idea of Donald Trump winning the election--I voted for Ross Perot when he ran too. I think it's time to kick out the professional politicians and get someone in office that relates the the people. I don't think the market will suffer as much as you think. China and oil seem to be the problems. However, if China cuts back on commodities, there could be a commodity stock depression in that sector of the market.
Glad to see you back, RS. I missed your wisdom. Paying my RMDs this year proves your point of steady income growth. Buying those aristocrats also has been paying off. Keep up the inspiring work!
Thanks Tyler for this update on your portfolio. Mine is down 6.37% YTD , due mostly to oil. My mother's Roth finally was distributed and I picked up KMI & GE as well as others. However the timing was such that KMI had already cut the dividend. You have started out on a roll--keep it up.
as10675--My main concern is the higher tax brackets. I enjoyed the 15% bracket throughout my 60s. At least it starts out slowly. Healthcare on the other hand, is a rapidly moving target. I go with the flow on that to see what pans out. Oh to be young again!
Thanks giofls for your concern. I made the decision to go to income stocks for 25% of my portfolio to have the cash flow to cover these payments. The other 75% is cushioned by the fact that I don't have to sell stocks out of the IRA in the first decade of payments. Right now the high yield stocks are holding value better than my other dividend growth stocks. Perhaps in the second decade of RMDs the market for those stocks will be up and I can transfer them to my regular account for RMDs. I'll wait to see how that works out. Time flies after you reach 70!
Thanks Bikerguy for this comment. I started studying this a year or so ago and found, like you say that the first 10 years of RMDs are still low compared to the amount I must withdraw for expenses anyway. Now that I am paying, I have seen a negative year in S&P500 returns. It becomes a cash flow problem. I don't want to sell dividend growth stocks when they are so low. The cash flow from these income stocks provides my payments. It is the second decade of RMDs that will be more of a problem. However, one must weigh their longevity against those payments and I may need to move stocks out of the IRA and into the regular account just to make the RMDs.
Hi RS,
There is a second stage of retirement after one turns 70 1/2--RMDs. I have rebalanced my portfolio over the last 2 years to get 25% in income stocks, like your MAIN and NLY. My goal is to pay the RMDs on my traditional IRA and my wife's traditional IRA through high yield income stocks. I use AGNC and PSEC although these are high risk, they pay the RMDs until they don't. In the past I used oil stocks like LNCO to provide income, but you see what happens to high risk stocks, they suspend the dividend.
Hi CWM,
I use high yield to pay my RMDs. I have held FSLBX (similar to VFH) and have suffered through the last 9 years with a 2.71% annual return. I have not been able to use it to pay RMDs because the return is so low. I got into AGNC and MTGE (both IRA holdings) in 2011 and 2012 when the yields were high and growing. Capital losses have cut those positions by 22% although the ride was exciting. The monthly dividends on AGNC provide a levelized payment for RMDs and is used in our living expenses. The quarterly payments from MTGE provide investment capital which I used to buy LNCO (so far a 90% loss) high yield MLPs are quite risky, especially in oil. Last year I jumped into the BDC market with PSEC. They cut the dividend at the end of the year and I continue to dollar cost average into it with all of my IRA dividends. The 13% yield and monthly payments make it good for RMD payments. I'm planning on buying MAIN when it gets to $27. My position in PSEC is topping out and I need diversification in BDCs. I hope you are right about financials because I want to lower my position in FSLBX next year (although it is in the regular account and can't be used to pay RMDs).
athenanpk: I drip NUE through my broker Vanguard. They don't charge for it and apply the dividends each quarter to buy shares (including fractional shares). Many other brokers have the same plan. I just turn on reinvest dividends on their website for each stock I wish to drip.
Thank you Tom Au for this update on current stock selection. My daughter picked up XOM @ 4% yield recently and is quite pleased with the uptick in price. She also got T and VZ for their dividends and price stability. I like PG at current price and am reinvesting those dividends (near 4% yield). This is a great time to buy!
Thank you Tom for this contrast between Graham & Piotroski.
Thanks arthur_bishop1972 for your comment. You made a good decision for your wife's Roth. I like the brewing deal, too.
Happy investing!
whmitch: I look at CAT as a long term hold. I dollar cost average into it, mostly with its reinvested dividends. However, when we near a price point such as 5% yield, I use additional funds up to a full position. I don't trade stocks, even though I miss out on considerable profits. I have never known when to get back in and I miss the reinvested dividend shares while I'm out.
A. B. Normil,
You did better on first buy than I did, CONGRATULATIONS! I think the economy has turned. My son in law's trucking business has started to turn a profit this year. My son's contracting work has picked up to the point he has a backlog through November. CAT should do well if the rain stops and the footings can be dug!
Thanks Chris Davis for this highly informational interview! You answered many questions that I had on this investment, especially the downgrade to BBB-. Also, the question of the spin offs was well covered. I will continue to dollar cost average into this stock even as the market has become volatile.
Picked some up today @7.8599.
Tom,
I am more of a value investor than a growth one. A good book to skim on my reasons is The New Finance, The Case Against Efficient Markets by Robert A Haugen. I re-read this book whenever I feel the markets are out of line, especially in Crashes. They revert to the mean.
I use the Gordon Model which only counts dividends and dividend growth rate for total expected appreciation. You may want to look at value investing coupled with the long-term cyclical nature of the markets. They always go up over the long run. The generations have a lot to do with this and the most recent generational shift occurred in 2014 when we moved into the Millennials (bulls) in mid-life replacing the X generation (bears).
Thanks Cris for this uplifting update on PSEC and their book. In the dark days of this last quarter your inspired writings and interview with Grier persuaded me to stay the course and keep dollar cost averaging with them. It takes a special analyst to keep this old retiree investing during the market crash.
Thank you LD Investments for this update on generational coffee traits. One of the problems with coffee sales is the fact that older adults, like myself have been forced to cut back on coffee consumption at home--due to aging. I have been a long time holder of SJM since I received the spin off from PG. I really like the company and have seen the position double. I agree with JonBeGood that they are a well diversified and adaptive company. I have recommended it to my family members for their accounts.
NV_Gary & relospecialist--
Being retired for over 15 years, I hold 1 years expenses in a bank savings account which is my rainy day fund. I do not consider this investable. I also have a pension and social security which provide some income. My cash accounts for investment are funded by dividends received and I try to keep the balance up to 10% portfolio. Neither I nor my wife consider any bonds to be safe investments at the present time. Too much cash is a drag on returns.
rhiannion:
LNCO is now a leveraged bet on natural gas & oil for price appreciation. The industry is consolidating, but you are correct that LINE/LNCO has too much debt for most companies to consider. They still have 2 credit facilities, which they have not used (Quantum & Blackstone). I think they want to buy some companies in bankruptcy. I also believe they think they can ride the natural gas price out and perceive a rising demand for natural gas and this is how they have based their hedges for the next few years. If my concentration in the Energy sector was lower, I would be dollar cost averaging into LNCO as I was doing prior to the first dividend cut in January. I now will wait it out. If the price of gas jumps to $4/mmbtu, I think the price of LNCO will take a leveraged leap back to $12. In the long run, they will go back to paying 8% yield once they have reduced debt a LOT!
Miz--LNCO reminds me of DDAIF, which I have held in the form of Chrysler and DDAIF since 1980. They all come back eventually if they don't get bought out. The key is to keep the allocation to a single stock low enough that you can ride it into the ground and still not get hurt too much.
Thanks Tyler for inviting me to this discussion. You have presented a very good round-table and I particularly like the way you introduced each question.
David,
You have selected a good one! I'm helping my daughter & son-in-law build their portfolio and they both are risk averse. This pull back gives them a good entry price for this long-term holding. I consider this company to be in the consumer cyclical sector rather than its traditional heading of telecommunications.
Happy investing!
Thank you Robyn for this interview of a distinguished group of authors. These are the people who keep me from making large mistakes in the current low yield environment. Cash flow has become paramount for me with RMDs and these people provide reassurance in times of dividend cutting on high yield investments.
Thanks OntheRock for your comments. I have held both T and VZ for a long time. I used to drip them, but now use the dividends (which pay tomorrow) for reinvestment in other stocks. The security of dividend and some dividend growth have endeared them to me--a forever hold!
Thanks for your comment, Dividend Nut. I believe now is the time to hunker down with secure dividend payments. I recommended XOM to my son-in-law for his energy exposure. He has waited as I have watched my LNCO suspend the dividend while the price heads for the exits. High yield isn't everything if it's not secure! The 75% of my portfolio in strong dividend growth stocks like you have keeps me afloat during times such as these.
Mathieu--Thanks for the tip on VNR. I'm gun shy on oil and gas at present and still hold LNCO near the bottom.
Eric--The last time I skipped the 3% yield point on NSC, I regretted it for years. You wrote an excellent article on CMI.
Mathieu--Thanks for reading! I'm feeling better after a virus that gave me vertigo. I hope this series will be of benefit to you. I'm detailing investments for my son in law. We don't usually agree and it makes me expand my investigations.