Everywhere I look I see HAS on a buy list. I'm so glad I bought my shares a year ago. They just keep raising that dividend. My YOC is now up to 4.4% and I have about a 10% capital gain. What's not to like?
Thanks for continuing the Smackdown series David. I keep finding gems here.
Norfolk Southern - High Yield Link In The Railroad Pipeline [View article]
Glad to see you back Norman! Great article too, as always. I picked up some NSC at $61.57 a while back and then watched it drop into the upper 50s before rebounding back up to the present levels. Still, for the growth rate, the 3.25% initial yield I got is nothing to complain about. Can't expect to buy at the bottom every time.
Double congrats to everyone boasting of family additions!
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
"It's actually a Challenger, with a 6-year streak of higher dividends" - David Fish
Thanks to everyone for correcting my misstatement.
I guess I missed it when I went looking for it in David's CCC list. I must be getting old enough so that my eyes aren't always cooperating. (That's my story and I'm sticking with it).
Regardless, I've been very happy since picking up TGH. I even added shares down around $28. They're an up and comer. Worth a look anyway, even if they're too volatile for some folks' taste.
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
"I want so badly to like railroads" - billinsd
Try setting a lowball limit order to buy and then wait. That's what I often do. Basically I'm not interested in buying unless I get a bargain.
I picked up a small position in NSC at $61.57 for a 3.24% yield. It represents less than 4% of my portfolio, so it's not like I'm taking a big risk overall.
The nice thing about getting shares during a mini-panic is that they usually rebound. NSC is now at $64.66, up 5% from my entry point. That makes for another nice margin of safety on my position.
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
"We are looking at other companies. Mostly in the cyclicals (mostly for my own portfolio). We like CAT, APA, SLB, BHI, FCX but at much lower prices than now"
Take a look at TGH. It's not on the CCC list yet, but it's going to be in a couple years. It's very volatile. Wait for a drop in price to buy. I got some at $28-ish a while back. Great yield, fast grower too. Well run.
(right click on link and choose "open in new tab")
My next suggestion would be to create a new portfolio containing the Dow 30 using the SeekingAlpha Portfolio capability. (click on the "Portfolio" link in the maroon bar on the upper left of the SA page and select "create new portfolio", then enter the symbols of the 30 DJIA stocks from the CNNMoney link above and save the portfolio)
Once you have the portfolio set up, you can choose the "Dividends" tab just above the list of stocks, then click on the "Div Yield" header to sort the list by dividend yield. Clicking that header will alternate between sorting from low to high and from high to low. Get them set up for high to low.
Voila!! You can now choose the top 10 stocks in the list for the current Dogs of the Dow (highest yielder to 10th highest yielder).
It takes a little work to set up the portfolio, but once you do, you can just pick it from the list of portfolios you keep, choose the Dividends tab and sort by yield. You'll be able to generate a current list of Dogs of the Dow in less than a minute, right here on SA, any time you want.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
You are correct. The difference between my suggestion and using a Williams %R ranking is very slight. The idea is still the same. Find CCC stocks which are the most beaten down in price and buy them.
Given the wide range of yields on CCC stocks, it is unlikely that a low yielder like ADM or BDX would ever be included in a Dogs list based solely on yields whereas it could be one of the most beaten down stocks of the CCC in price. A Williams %R type selecting mechanism would find those kind of stocks where a yield ranking approach would not.
The Dogs of the Dow is only applied to a 30 stock universe. The yields of those 30 stocks do not vary widely so any one stock might be a relatively high yielder. The several hundred CCC stock list probably contains a handful of stocks which will very rarely, if ever, be included in the top yielders.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
"The difficult part of your alternative might be in getting the yield range over the past year" - David Fish
It can be estimated pretty easily. Use 4 * current dividend as an estimate for annual dividends, then divide that figure by the 52 week high and 52 week low prices (widely available on yahoo finance). That should give you an pretty good estimate of the high and low yields over the past year.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
I have HAS and INTC on this list. Both paying over 4% YOC to me. I once held AM, but sold it when the dividend froze.
It seems that a Dogs of the CCC approach needs some other discriminator to make comparisons of stocks more 'even'. There are too many stocks with wide range of "normal" yields to rely solely on the highest yielders.
Perhaps there is some way of incorporating a percentage from highest yield for that stock. Say stock A had a yield range from 3.2% to 3.8% over the past year, the current ranking metric might be the percentage of that range of yields.
If the current yield is 3.7% then the ranking might be
rank = (3.8 - 3.7) / (3.8 - 3.2) = 0.1666
This is sort of equivalent to ranking by selecting the stocks which are lowest in the annual price range for those stocks.
The ten stocks with the lowest rank would qualify as the Dogs.
This would eliminate selection of perma-high yielders as Dog selections over and over. What are the odds that a stocks like PG will yield more than MO any time soon using a pure yield comparison? Using a percentage of range however might show PG is more undervalued than MO, despite the lower yield.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
Plow,
I was only putting the idea out there for consideration in general. Didn't intend it to sound like I'm recommending anyone do anything. If that's the way it came across, I apologize.
For what it's worth, anyone can scale a rolling Dogs type play to fit their time and budget:
$500 per Dog with four quarterly overlapping sub-portfolios would require:
$500*10*4 = $20,000.00 total
It would also require you to sort out a new Dog list four times a year so you could roll one of the sub-portfolios into the new Dogs.
Given the stock quoting and data sorting capabilities of spreadsheets these days, it might take 15 minutes to generate the current list of Dogs. Tack on another hour to enter the sell and buy orders and I can easily envision each quarterly roll-over taking less than 2 hours to accomplish. That's 8 hours per year total.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
Why not set up a "rolling Dog" play?
Use 12 separate Dog portfolios and rebalance a different portfolio on the first of every month. Each will be held a year before rebalancing, but the net effect is to move 1/12th of capital gains into better valued stocks each month.
For example, each monthly portfolio holds 10 Dogs @ $1,000 each for $10,000 total. Twelve separate portfolios requires $120,000 to start and will reposition a different monthly portfolio on the first of each month.
Such an approach should do a better job taking advantage of market fluctuations throughout the year and probably reduce overall volatility in the total holdings. Just a thought.
Dave Van Knapp Positions For 2013: Tuning Out Market 'Noise' With Dividend Growth Investing [View article]
Scooter,
For what it's worth, there is an ETF for junior gold miners (GDXJ) which pays an annual dividend in December. The 2012 distribution hit my account today at $0.75 per share (~3.75%). This is one way to to get exposure to the precious metals sector without foregoing income for those who so desire.
To address DVK's PM "get it" issue, the idea behind owning PMs is that they are a reasonable way to maintain purchasing power in an inflationary environment. It's not that the 'value' of a PM increases, it's the fact that money printing causes the value (purchasing power really) of a currency to decrease over time. Historically, when real interest rates are negative (as they have been since 2008) PMs tend to increase in price. PMs are a hedge against currency devaluation.
Current real interest rate is -1.65% (1 yr t-bill @ 0.15% - 12 month trailing CPI @ 1.8%, which is probably an understated number)
Consider the FED's latest QE3 plan. They are creating $85 billion a month to buy toxic MBS and government debt (to 'boost' the economy). The current FED balance sheet (the total amount of money they have created over time) stands at ~$2.7 trillion. They are growing the base money supply by nearly 3% per month with QE3. In contrast, the above ground supply of PMs grows at about 1% per year, and it's becoming more difficult to keep that pace up in the mining industry as reserves are continually depleting.
As one of my college physics professors used to say ... do the math. It's all about supply and demand. Over time the PMs should maintain purchasing power better than cash, though that may not matter to a DGI proponent with a portfolio yielding north of 3% unless the CPI starts growing faster than the rate of the portfolio's dividend increases. It's not a common occurrence, but it is possible given the extent of the FED's QE programs.
Dividend Challengers Smackdown XXXIV [View article]
Thanks for continuing the Smackdown series David. I keep finding gems here.
Norfolk Southern - High Yield Link In The Railroad Pipeline [View article]
Double congrats to everyone boasting of family additions!
Dogs Of The Dow: Going To The Pound In 2013 [View article]
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
Thanks to everyone for correcting my misstatement.
I guess I missed it when I went looking for it in David's CCC list. I must be getting old enough so that my eyes aren't always cooperating. (That's my story and I'm sticking with it).
Regardless, I've been very happy since picking up TGH. I even added shares down around $28. They're an up and comer. Worth a look anyway, even if they're too volatile for some folks' taste.
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
Try setting a lowball limit order to buy and then wait. That's what I often do. Basically I'm not interested in buying unless I get a bargain.
I picked up a small position in NSC at $61.57 for a 3.24% yield. It represents less than 4% of my portfolio, so it's not like I'm taking a big risk overall.
The nice thing about getting shares during a mini-panic is that they usually rebound. NSC is now at $64.66, up 5% from my entry point. That makes for another nice margin of safety on my position.
The Portfolio For Do It Yourselfers: What We Are Buying (Part 2) [View article]
Take a look at TGH. It's not on the CCC list yet, but it's going to be in a couple years. It's very volatile. Wait for a drop in price to buy. I got some at $28-ish a while back. Great yield, fast grower too. Well run.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
I don't use the Dogs of the Dow myself, but I can give you some basic stuff to get started.
First, the 30 DJIA stocks can be found here:
http://cnnmon.ie/10gfD9q
(right click on link and choose "open in new tab")
My next suggestion would be to create a new portfolio containing the Dow 30 using the SeekingAlpha Portfolio capability. (click on the "Portfolio" link in the maroon bar on the upper left of the SA page and select "create new portfolio", then enter the symbols of the 30 DJIA stocks from the CNNMoney link above and save the portfolio)
Once you have the portfolio set up, you can choose the "Dividends" tab just above the list of stocks, then click on the "Div Yield" header to sort the list by dividend yield. Clicking that header will alternate between sorting from low to high and from high to low. Get them set up for high to low.
Voila!! You can now choose the top 10 stocks in the list for the current Dogs of the Dow (highest yielder to 10th highest yielder).
It takes a little work to set up the portfolio, but once you do, you can just pick it from the list of portfolios you keep, choose the Dividends tab and sort by yield. You'll be able to generate a current list of Dogs of the Dow in less than a minute, right here on SA, any time you want.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
Given the wide range of yields on CCC stocks, it is unlikely that a low yielder like ADM or BDX would ever be included in a Dogs list based solely on yields whereas it could be one of the most beaten down stocks of the CCC in price. A Williams %R type selecting mechanism would find those kind of stocks where a yield ranking approach would not.
The Dogs of the Dow is only applied to a 30 stock universe. The yields of those 30 stocks do not vary widely so any one stock might be a relatively high yielder. The several hundred CCC stock list probably contains a handful of stocks which will very rarely, if ever, be included in the top yielders.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
It can be estimated pretty easily. Use 4 * current dividend as an estimate for annual dividends, then divide that figure by the 52 week high and 52 week low prices (widely available on yahoo finance). That should give you an pretty good estimate of the high and low yields over the past year.
'Pure-Bred' Dividend Challenger Dogs For 2013 [View article]
It seems that a Dogs of the CCC approach needs some other discriminator to make comparisons of stocks more 'even'. There are too many stocks with wide range of "normal" yields to rely solely on the highest yielders.
Perhaps there is some way of incorporating a percentage from highest yield for that stock. Say stock A had a yield range from 3.2% to 3.8% over the past year, the current ranking metric might be the percentage of that range of yields.
If the current yield is 3.7% then the ranking might be
rank = (3.8 - 3.7) / (3.8 - 3.2) = 0.1666
This is sort of equivalent to ranking by selecting the stocks which are lowest in the annual price range for those stocks.
The ten stocks with the lowest rank would qualify as the Dogs.
This would eliminate selection of perma-high yielders as Dog selections over and over. What are the odds that a stocks like PG will yield more than MO any time soon using a pure yield comparison? Using a percentage of range however might show PG is more undervalued than MO, despite the lower yield.
Abbot And AbbVie Split Basis [View instapost]
This helps a bunch. I haven't had the time to look into the matter for myself.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
I was only putting the idea out there for consideration in general. Didn't intend it to sound like I'm recommending anyone do anything. If that's the way it came across, I apologize.
For what it's worth, anyone can scale a rolling Dogs type play to fit their time and budget:
$500 per Dog with four quarterly overlapping sub-portfolios would require:
$500*10*4 = $20,000.00 total
It would also require you to sort out a new Dog list four times a year so you could roll one of the sub-portfolios into the new Dogs.
Given the stock quoting and data sorting capabilities of spreadsheets these days, it might take 15 minutes to generate the current list of Dogs. Tack on another hour to enter the sell and buy orders and I can easily envision each quarterly roll-over taking less than 2 hours to accomplish. That's 8 hours per year total.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
Use 12 separate Dog portfolios and rebalance a different portfolio on the first of every month. Each will be held a year before rebalancing, but the net effect is to move 1/12th of capital gains into better valued stocks each month.
For example, each monthly portfolio holds 10 Dogs @ $1,000 each for $10,000 total. Twelve separate portfolios requires $120,000 to start and will reposition a different monthly portfolio on the first of each month.
Such an approach should do a better job taking advantage of market fluctuations throughout the year and probably reduce overall volatility in the total holdings. Just a thought.
Dogs Of The Dow: Going To The Pound In 2013 [View article]
Best of luck to everyone in the New Year!
Dave Van Knapp Positions For 2013: Tuning Out Market 'Noise' With Dividend Growth Investing [View article]
For what it's worth, there is an ETF for junior gold miners (GDXJ) which pays an annual dividend in December. The 2012 distribution hit my account today at $0.75 per share (~3.75%). This is one way to to get exposure to the precious metals sector without foregoing income for those who so desire.
To address DVK's PM "get it" issue, the idea behind owning PMs is that they are a reasonable way to maintain purchasing power in an inflationary environment. It's not that the 'value' of a PM increases, it's the fact that money printing causes the value (purchasing power really) of a currency to decrease over time. Historically, when real interest rates are negative (as they have been since 2008) PMs tend to increase in price. PMs are a hedge against currency devaluation.
Current real interest rate is -1.65% (1 yr t-bill @ 0.15% - 12 month trailing CPI @ 1.8%, which is probably an understated number)
Consider the FED's latest QE3 plan. They are creating $85 billion a month to buy toxic MBS and government debt (to 'boost' the economy). The current FED balance sheet (the total amount of money they have created over time) stands at ~$2.7 trillion. They are growing the base money supply by nearly 3% per month with QE3. In contrast, the above ground supply of PMs grows at about 1% per year, and it's becoming more difficult to keep that pace up in the mining industry as reserves are continually depleting.
As one of my college physics professors used to say ... do the math. It's all about supply and demand. Over time the PMs should maintain purchasing power better than cash, though that may not matter to a DGI proponent with a portfolio yielding north of 3% unless the CPI starts growing faster than the rate of the portfolio's dividend increases. It's not a common occurrence, but it is possible given the extent of the FED's QE programs.