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dgodfrey
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Registered Investment Adviser Global Trend Following Market Neutral Investing Since 2003
My blog:
Trends for Profit
  • Three Dividend Stocks Best For Consideration Now 3 comments
    Jun 12, 2012 8:56 AM | about stocks: CNP, FDL

    With interest rates at historic lows and lots of economic uncertainty to consider, there is plenty of interest in finding dividend paying stocks that also seem less likely to decline in the current market environment.

    As I thought about writing this post, I decided to highlight some equities that should be near the top of any list of dividend paying stocks for investors to consider purchasing now. Whether any of these ideas meet your own personal investment criteria or needs is up to you and your adviser(s).

    In coming up with this short list, I had three criteria that each idea had to meet:

    1. The dividend yield is at least 3.0% per annum.

    2. The dividend payors show an ability and consistency in paying dividends.

    3. The stock is in a solid positive trend, now, that also has a reasonable chance of persisting for a good while.

    The third criterion is perhaps what distinguishes this short list from others that you might find. As a trend follower, I firmly believe that it is important for investors and portfolio managers to allocate their capital away from under-performing securities, until such time as those securities perform the way equity securities as expected (i.e. provide a positive total return). A solid positive trend now is the best evidence I can think of that an equity security is performing acceptably.

    So with those introductory comments made, here are three equity securities that meet the three criteria. One common stock, one ETF and one mutual fund. Offered for your further consideration:

    CNP, CenterPoint Energy, Inc., (TTM yield 3.9%) the common stock of a Houston based utility mostly in the transmission and distribution business.

    FDL, First Trust Morningstar Dividend Leaders Index, (TTM yield 3.4%), an ETF comprised of US based dividend paying stocks that show consistency and ability to pay dividends.

    PETDX, PIMCO Real Estate Real Return Strategy D (TTM yield 17.9%), a mutual fund that uses proprietary strategies to generate income primarily from investments in derivatives on real estate assets. Although this has been an outstanding performer for the past several years, the fund itself is a bit of a "black box" so it is difficult to assess its current holdings. For this reason, you may wish to consider only a limited investment in this security, if at all.

    Disclosure: I am long CNP.

    Additional disclosure: I also hold PETDX currently. I may purchase each of the securities mentioned in this article in the next 72 hours.

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Comments (3)
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  • sdlombardi
    , contributor
    Comments (52) | Send Message
     
    Would you explain what you mean by a "black box" type of investment? Thanks.
    6 Jun 2013, 09:08 PM Reply Like
  • Philipsonh
    , contributor
    Comments (987) | Send Message
     
    I expect the author is stating an investor is unable to understand what the fund's underlying portfolio consists of. If you access Morningstar or the Pimco website you will see the top holdings are not real estate products.
    13 Jan, 01:48 PM Reply Like
  • sdlombardi
    , contributor
    Comments (52) | Send Message
     
    Thank you for the explanation.
    19 Jan, 09:27 AM Reply Like
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