The Dividend Guy

Dividend growth investing, independent research, long-term horizon
The Dividend Guy
Dividend growth investing, independent research, long-term horizon
Contributor since: 2007
Company: Dividend Stocks Rock
Hi,
Because the dividend payment is being discussed elsewhere in the article. I'm trying to show where the investor will get the value when he makes an investment. Sometimes it is from capital, sometimes from dividend, sometimes both. This is why I concluded that AT&T was a great stock for any conservative portfolio or income seeker.
Hello Jaeger,
You could please at least read the article until the very last line. I'll save you time and post what you need to read:
"Overall, I think AT&T is a good addition to any conservative, income-seeking dividend portfolio. At a 5.5% yield, this is like holding a bond paying a high interest rate. Considering the current bond market, this is a hell of a deal."
Cheers,
Mike
Can you remind me how many time in the history companies like JNJ, KO, PG, etc paid 8% dividend?
Good point Robert,
I define any company paying over 5% a high yield.
cheers,
Mike.
"always" is a big statement, let's just say "most of the time"? :-)
Hello.
In fact, if you had purchased ARCC on January 7th 2011 (5 years ago), you would have paid $16.70 per share. Let's say you bought 60 shares for $1002 (excluding transaction fee) and you kept your shares until today.
During this period, the company paid a total $6.20 per share, therefore a total a $372. On January 7th 2016, shares of ARCC worth $13.91. Your total investment worth $834.60 today. Dividend plus share value = $1,206.60 for a total return of 20.42% over 5 years. Annualized rate of return of 3.79%. Not the most amazing return considering we ran a strong bull market. thoughts?
Can you tell me how much a KMI holder will receive in dividend next year compare to true dividend growth stocks? that has nothing to do with total return.
Plus, if you ignore total return and simply look at your dividend payment, you might eventually fell short. What is the benefit of holding BBEP today? no dividend and no value...
Follow those three portfolios in the next 5 years and I'm 90% sure the dividend growth portfolio will pay more dividend in cash than the first portfolio.
Hello Kovnat,
liquidity issues ;-) I don't have enough money to buy all stocks I like! But it is on my watch list.
Cheers,
Mike.
Good pick! I should have waited more! hahaha!
If you use a 8% discount rate instead of 9%, you will get a fair value even bigger. I don't think the stock worth $173 at the moment. don't you think?
I had too much fun answering him ;-) hahaha!
Have both? you are absolutely right! Why don't you share your list of 50 stocks paying 8% dividend yield and showing 8% dividend growth each year for the past 10-25 years? We all know it's very easy to find those but... I never found any articles on those "magic stocks". Maybe I should look around in the Unicorn's corner of Seeking Alpha.
Try to be nice with your comment next time. Nobody is learning anything or evolving as an investor with mean comments.
Cheers,
Mike
Hello Daniel,
You are right, but if I ever find this formula, I won't share it ;-) hahaha! More seriously, I think that if you look within companies with smaller yields, you will have better chances they will increase their dividend over time than a company already paying a 8% yield.
There is always a reason why a company pays a higher yield than the average dividend payer, this reason is called "risk".
Cheers,
Mike
Thank you Philly62!
I'm also looking to initiate a position in UNP soon.
cheers,
Mike.
Very good point Steve.
Most solid dividend growth stocks have a conscious management team with a dividend payout policy (min-max of payout ratio). Therefore, you are right to think that MMM will not boost its dividend payment until it reaches 80-90% payout ratio for example.
However, during a recession, a company like MMM will keep increasing its dividend payment even if earnings are not following a similar trend. If the company already have a 80-90% payout ratio and hits a few bad years, the dividend won't increase much.
Cheers,
Mike
Hello Gigo07,
I'd like to know why you thin both MMM and BLK are overvalued.
Thank you.
Mike.
Plus you have to consider you will retire for likely 20, 25 maybe 30 years. The importance of dividend growth is crucial if you expect to live on your portfolio yield.
Cheers,
Mike.
Hello Skifun333,
when you look at their dividend growth rate, you will see that low yielding dividend stocks may reward you with healthy dividend in a short period of time. If you had bought DIS 5 years ago, today this company would pay you a 3% dividend yield based on your cost of purchase (Both dividend payment and stock valued tripled in the past 5 years). 5 years is not a big period to wait for such amazing company.
BLK and MMM divided also doubled during the past 5 years. Dividend growth may become more important than dividend yield.
Cheers,
Mike.
Hello Frank,
the $71.73 is the price of JNJ at a 10% discount rate giving a 20% discount on intrinsic value of $89.67.
At 8.8%, the intrinsic value is $128.81 and the 20% discount from this price is $103.04.
I hope it helps!
Mike.
Hello Essielajmiri,
The spreadsheet is copyright and part of the Dividend Toolkit (http://bit.ly/1esawsx).
Regards,
Mike
It is definitely a great time to increase your position in MMM :-)
I had put the dividend yield when the stock was trading around $80, a $5 drop in the stock price since July 30th explains the difference.
Cheers,
Mike
Hello Rudester,
I think this is why they recently decided to cut off 100 brands and focus on only 65. I hope they will get rid of all the bad stuff and also be able to make the good brands grow faster.
Cheers,
Mike
Sorry to disappoint you Sid, but I'm Canadian too. There are several cultural differences between Americans and Canadians believe it or not. How could you explain TGT failed dramatically in Canada then?
It's a very good point. It is an highly fragmented market leaving place for lots of "small competition". The smaller drillers will probably start to disappear in the next two years and leave more space to bigger companies such as HP. Since HP balance sheet is pretty clean, they are in a better position than others to get more contracts. I doubt they will acquire other companies since there is very little differentiation from one rig to another. They are better off trying to get new contracts instead of buying a smaller competitors.
So far, HP is in a very good position to gain additional market shares. I didn't disclose this information in my article, but while doing my research, I've notice that HP has the lowest debt ratio and highest level of cash. This should help the company going through the storm and gain additional contract as clients will want to do business with a strong company.
So far, HP is in a very good position to gain additional market shares. I didn't disclose this information in my article, but while doing my research, I've notice that HP has the lowest debt ratio and highest level of cash. This should help the company going through the storm and gain additional contract as clients will want to do business with a strong company.
Hi,
There is not a 1.0 correlation between HP's business and the oil price. Therefore, we can't expect a payout ratio at 80% next year. I think it will probably be around 60% to 80% as HP also have several contracts for the next 2 years that will smoother earnings. Still, as any other play in the energy industry, this remains a volatile stock for the moment.
good one!
yes, in fact, the first four principles are directly related to my stock analysis process, the last 3 is more related to how I manage my portfolio as a whole. Therefore, it's not directly related to HP or any other dividend stock.
Thank you!
Hello 2bears,
I personally sold BNS earlier this year as I think it will take time until it bounce back. The Latin market won't support BNS growth at the moment. I prefer RY and TD at the moment.
Cheers,
MIke
Hello Royk01,
You are right, the list is composed of my top 10 US and top 10 Cdn stocks. Since I'm Canadian, I also include Canadian dividend stocks in most of my articles.
Cheers,
Mike.
Because there are lots of uncertainties around the price of potash in the future. Potash doesn't evolve in a smooth environment like Procter & Gamble for example. There are additional risks.
Lately, several companies are showing negative returns because people fear what is happening right now with Greece and China.