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  • How I Retired At 45  [View article]
    Congrats, Early Retiree. Interesting stuff; I do enjoy the recounting of an investing road less traveled. I'll bet when you reflect on all the things you no longer have to do, it's pretty darn satisfying.

    I will say, your approach cuts it too close for comfort for me! I would want a bigger buffer against the unforeseen, and more capacity to help others should the need arise (as has happened in my family). My husband and I have been fortunate though, insofar as neither of us has had the kind of job that leaves us plotting an early-as-possible retirement.

    Very best to you and your family.
    Mar 15, 2016. 11:45 PM | 2 Likes Like |Link to Comment
  • The Perfect Portfolio: Another Look At Our Target Stock List And Adding IBM  [View article]
    Oh, okay, I see. Thanks Dave.
    Mar 15, 2016. 03:39 PM | 1 Like Like |Link to Comment
  • The Perfect Portfolio: Another Look At Our Target Stock List And Adding IBM  [View article]
    "In the future installments of this series, I will be suggesting 'price ranges' that I am interested in owning a particular stock."

    I've seen "price ranges" before but I admit that I don't understand. If the price drops below the low end of the range, does that mean you wouldn't be interested anymore? Would it be because price dropping below the range possibly indicates that something is wrong with the company? Or is it more like, at the upper end of the range you nibble; below the lower end you go all in?

    fwiw, I use both target prices and what I think of as "get interested" prices. The latter is like a signal to me to start paying attention again, whereas the former is more firm -- sometimes for a stock that I don't want to get overweight on but could be tempted, and sometimes if I'm looking for a particular yield.
    Mar 15, 2016. 03:21 PM | Likes Like |Link to Comment
  • One Millennial's Doggone Dandy Dividend Growth Portfolio  [View article]
    I'm amazed that she's had 2 limit orders miss by a penny! In 4+ years, I've never had that happen. Maybe she should up her limit orders by $.01. :-)

    Congrats to you, Mike, for helping her on her investing path; and to you and your wife for being great parents. I can see how proud you are, and it's a wonderful thing. Go Katie! You're doing great!
    Mar 15, 2016. 09:19 AM | 6 Likes Like |Link to Comment
  • The Role Of Dividends In Total Return Is Irrelevant  [View article]
    Though you suggest that the takeaway is that investors should think less about dividends, imo the true takeaway is that investors should stress quality and value.

    The search for quality very often leads to long-term dividend growers (not always, of course). It makes sense to me then to exploit this feature by incorporating it into one's strategy for funding retirement.

    So, being 48 and somewhere between 10 and 15 years from retirement, ~60% of my stock portfolio aligns with the pursuit of investment-sourced income, the growth of which far outpaces inflation, from stocks of high-quality companies that have shown long-term total-return outperformance relative to the S&P 500. The remainder of the portfolio primarily pursues high-quality growth (though it does also produce some income). If I were farther from retirement, I'd put more emphasis on the latter; and if closer, more on the former.
    Mar 15, 2016. 09:08 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investors: This Should Be Your No. 1 Worry (But It Really Shouldn't Be A Concern)  [View article]
    Yeah, I look at both too, but I've started to wonder if I should give more weight to FCF payout ratio.
    Mar 12, 2016. 09:26 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investors: This Should Be Your No. 1 Worry (But It Really Shouldn't Be A Concern)  [View article]
    Mark, do you look at payout ratio based on earnings or on FCF?
    Mar 12, 2016. 08:32 AM | Likes Like |Link to Comment
  • ConocoPhillips: Kiss The Dividend Goodbye  [View article]
    This article is of the type that might be thought of as a "bad news" article, a "bash" article, or a "warning" article, depending on one's perspective. It's only a bad-news article if you aren't already aware that the price of oil has plummeted and COP is in negative FCF at this point. It's only a bash article if you're unwilling to acknowledge the features of COP's current predicament. The author didn't take cheap shots at the company; he didn't criticize their decisions or their leadership. He looked at the numbers, stated an opinion that the company should not add more debt to the pile, and a further opinion (supported by supply and demand dynamics) that the price of oil will not recover to COP's breakeven level. His take on available evidence is that even COP's reduced dividend is not safe.

    Of course, it's certainly possible to look at these or other facts and come to a different conclusion. Unfortunately, a number of the responses here have been along the lines of "BS", "he must be short", etc. If you're long COP, it's in your interest to examine his argument and the combination of facts/opinions he uses to support it.

    Commenter donttreadonme1 above stated, "I highly doubt that co leadership cut div 66% without planning to be able to sustain the remaining div at sub-optimal oil prices." The comment would have been an important contribution if it had been supported by some kind of evidence or logical rationale. If you read the most recent earnings call transcript, you'll see that they do have a plan, which the author summarizes. But the author is saying that the plan isn't going to be enough because it relies on $45 Brent, which he doesn't think is realistic. He thinks the dividend is the part of the equation that will have to give; but reading through the most recent earnings call transcript, it sounds like the plan is to take on more debt. (And Brent has actually come within shouting distance of $45.)

    One analyst, Blake Fernandez of Scotia Howard Weil, asked, "I guess what I'm a little surprised about is why even maintain [the dividend] at all with the $45 breakeven and the current price is around $30 [note: call date was 2/4/16; Brent has recovered to ~$40 since then]. I guess I'm just a little bit concerned we're not setting up for another potential cut down the road if current prices persist. Can you maybe just talk a little bit about how we should think about the ongoing evaluation of the dividend's sustainability if $30 were to maintain for the next, let's say, six to 12 months?"

    Response: "Part of the thought process here is that we recognize that prices could stay in the $30s for an extended period of time. And what we've done as we've set the dividend and set the capital program and looked at our balance sheet capacity is we've set things to a point where we are comfortable that we're going to have the balance sheet capacity to maintain the capital program and maintain the dividend even at prices that persist at today's level for a prolonged period of time." -- So, lean on the balance sheet, which they feel they have room to do.
    Mar 12, 2016. 07:01 AM | 5 Likes Like |Link to Comment
  • Air Products And Chemicals: Great Company, Great Value  [View article]
    Well, what I'm saying is "the split would provide shareholders with value" is vague; so is "the dividend will be split between them". Yes, we know the dividend will be split, but how? If you recall, Abbott split into ABT and ABBV, and the generous dividend went with the riskier growth play rather than the solid, steady company. I thought that was surprising and not welcome, frankly. So given that the company has a choice in how much dividend will go with each company, do you have an opinion on how that will (or should) be managed?

    There's nothing in your article about FV for the two companies, nor projected growth for either. Sometimes the spun-off company is the keeper (perhaps COP/PSX would be an example?); sometimes people look at the spin-off as something to be sold immediately (i.e., if they didn't want it anymore, why should I? -- For some, VTR's spin-off of CCP comes to mind). So if Versum is a keeper, why? Saying it will "provide shareholders with value" doesn't begin to explain how you arrived at that conclusion.
    Mar 9, 2016. 03:15 PM | Likes Like |Link to Comment
  • Dividends: A Key Component Of Total Return  [View article]
    Thanks for the heads-up, joni!
    Mar 9, 2016. 03:01 PM | 1 Like Like |Link to Comment
  • Dividends: A Key Component Of Total Return  [View article]
    "Somewhere in this comment stream, I talked about XOM and CVX having the room to borrow the money to pay the dividend, where the other oil companies don't have that luxury and why their dividend is more at risk than that of XOM and CVX."

    Yeah, and their slide presentation includes one that compares annual debt ratio and debt capacity -- CVX and XOM are all by their lonesome, well apart from the pack that includes BP, TOT, RDS, COP, and a number of others.
    Mar 9, 2016. 10:10 AM | Likes Like |Link to Comment
  • Dividends: A Key Component Of Total Return  [View article]
    For all interested... a transcript of yesterday's Security Analyst meeting is available on CVX's IR page. A few quotes:

    "As we finish projects under construction, spend is coming down and production is growing, improving our net cash flow balance. We are prudently using some of our borrowing capacity to finish projects under construction and to pay the dividend. We've kept a strong balance sheet precisely for times like these."

    "Our financial priorities are clear and consistent. Number one is to maintain and grow the dividend as the pattern of earnings and cash flow permit."

    "So what are we doing to get better going forward? We're focused on improving free cash flow and covering the dividend in 2017. This slide [slide presentation is on the IR site also] is an illustration of how we plan to do this at $52 Brent. $52 is the actual average price for Brent in 2015 as in line with the current average sell side analyst price forecast for 2017."

    From the Q&A: "So obviously we've increased the dividend at a very slow rate when prices are down. ... it's not per se linked to production because if prices are very low you don't have the revenue base for dividends. But we think that with the kinds of prices we expect to see and with the production volume we expect to see we'll see cash flows that will grow and put us in a position to consider dividend increases."
    Mar 9, 2016. 09:41 AM | 3 Likes Like |Link to Comment
  • Dividends: A Key Component Of Total Return  [View article]
    "The CEO of Chevron was on CNBC today stating it intends to keep the dividends growing."

    This is an interesting thing for him to say when they've announced the same dividend for 8 quarters. Seems like the intention he's talking about is the broad intention -- if we weren't under stress, if the price of oil increases, that sort of thing. It would be nice to hear some straight talk. I don't expect a raise at this point. And along with the other skeptics... just his saying it sounds like shareholders should prepare for a cut!
    Mar 9, 2016. 08:19 AM | Likes Like |Link to Comment
  • Air Products And Chemicals: Great Company, Great Value  [View article]
    Given that the major issue for current and prospective holders of APD right now is the impending split, I would have liked to see this analysis explore it in more detail. What's your opinion of the split -- make sense, or questionable? Considering the competitive landscape, revenues, growth potential, and inherent risk, what would be a fair value for each of the two companies if the split happened today? How do you see each company progressing after the split? How should they allocate the dividend between the two companies?
    Mar 9, 2016. 07:38 AM | 2 Likes Like |Link to Comment
  • I've Been 'Kindered'! But Not Even Kinder Morgan's Unkind Cut Can Devastate The Dividend Growth 50  [View article]
    "Dividend growth investing is total return investing and any time I have an opportunity to present it as such, I will."

    And I appreciate it. I think a bunch of us are tired of hearing the criticism that a focus on rising income means we're leaving a lot on the table, no matter how many times people point out it's a strategy that outperforms over the long term.

    I get where Kolpin is coming from; it's a different tune to be hearing. And we all know that whatever the market is going to bring us tomorrow is a question mark; the capital gains could evaporate just like that. It isn't the same as the more durable income stream. But while the portfolio total is running high, might as well enjoy it.
    Mar 8, 2016. 03:06 PM | 1 Like Like |Link to Comment