Dividend Growth Investing: Beating Inflation With Long-Term Investing [View article]
Dave, great article.
I want to say I found your article on "Beat Goes On" to be inspirational. I hope to pass that message onto my children so they start get started on DGI much earlier than I did.
I didn't notice WMT in your portfolio though? It's a company I hold and believe is a good long-term DGI holding even with all the recent negative headlines.
Thanks for all your sharing, it's really helping me get on with DGI.
Summer Swoon: 3 Dividend Stocks To Pick Up [View article]
I still don't understand the metrics around PM.
Doesn't the ultra high level of debt (it has a book value of only 22 cents) make it ultra vulnerable to an earnings decrease when interest rates go up at some point in the future?
What if we go into another "financial crisis" and liquidity dries up? How will it service its HUGE debt?
Procter & Gamble Vs. Johnson & Johnson: Dividend Growth [View article]
Chowder & TradeV,
I'm finally back home from work. This is why I`m teaching my kids about DGI early so that by the time they reach 50 like myself they may be able to think about part-time jobs because they will be raking in the divs.
Thanks for sharing your perspectives. Congrats also Chowder on your div income hitting all time highs (unlike the trees bearing the fruit), isn't it great! Gotta love DG & DRIP`s. I too am pleased with the markets recent decline, have been and for the most part, continue to wait for entry points on some of my favourite stocks. I picked up some BNS today @ 4.25% initial yield (good enough for me). Expect DG to increase my YOC in the years ahead. Hopefully will get some more bites over the next few weeks on some other stocks.
Chowder, I`m going to have to settle down with some ``cold-ones`` during our upcoming long-weekend and think about MCD & PM some more. The ultra high debt PM carries is still strange and scary to me. I guess that`s why we diversify.
Procter & Gamble Vs. Johnson & Johnson: Dividend Growth [View article]
I agree 110% with Chowder's & Norman's comments.
I'm a Canadian investor and hold both PG & JNJ for the Dividend Income Growth and reinvest dividends (unfortunately my retirement account only offers a "synthetic" DRIP -- whole shares reinvested only -- at least I avoid the 15% whithholding tax though).
I've been "stung" by the market before. Manulife was the #1 life insurance company in Canada. Along came the financial crisis, a 50% dividend cut and the stock is still trading at 25% of its pre-crisis level. The reduced dividend has remained "frozen" even though the CEO happily states how much stronger the company is now with its strong capital ratio and much reduced leverage to interest rates and market declines. Show me the money with a dividend increase I say. I won't believe any of it until the dividend starts growing.
I feel good holding PG & JNJ over many of the other favourite DG stocks such as MCD & PM for instance. In MCD's case, it has a BV of $14.39 with a current Price/Book = 6.33. MCD also has a rather high Debt = 87% of Equity. MCD's Graham Valuation is $41.66. It trades at 2x that value and is deemed to be good value by many from what I can tell.
In the case of Philip Morris Int'l, it has a BV of $0.22 with a current P/B = 386 (OUCH!). PM has a Debt/Equity = 55.13. Its Graham Valuation is $4.99. I do understand it may be an industry norm but metrics like these are hard for me to digest, at this time anyway. OUCH again, MCD is starting to look good, relatively speaking.
The picks I make over the next several years are the ones I and my dear wife are counting on to fund the bulk of our retirement expenses about 15 years down the road. I'm determined to choose financially sound, lower risk, slow but steady players that allow me to sleep soundly.
The past performance of MCD and PM has been stellar, yes. But I honestly don't understand why dividend investors looking for value and a certain degree of safety would feel safe owning either of these (especially PM).
I'm relatively new at DG investing and am learning almost daily. I know I must be missing some important concepts regarding the attraction to MCD & especially PM given the metrics above.
It would be greatly appreciated if one (or more) of the seasoned investors on SA are able to provide some clarity.
Dividend Growth Investing: Beating Inflation With Long-Term Investing [View article]
Thanks Dave (& mbkelly),
Yes, I've seen the "Retirement DIY" articles and think they're a very good illustration on the DGI strategy in action. I like your approach of not dumping a holding because of "negative noise" but rather holding for the long-term as long as fundamentals remain largely intact(think JNJ).
It's nice to hear some positive comments on WMT. I believe it may be good long-term value here too as it's selling well below the 5yr average high yield valuation.
What confused me about your WMT holding is the article above referred to purchasing the stock 20 years back or so.
Dividend Growth Investing: Beating Inflation With Long-Term Investing [View article]
I want to say I found your article on "Beat Goes On" to be inspirational. I hope to pass that message onto my children so they start get started on DGI much earlier than I did.
I didn't notice WMT in your portfolio though? It's a company I hold and believe is a good long-term DGI holding even with all the recent negative headlines.
Thanks for all your sharing, it's really helping me get on with DGI.
LearninDGI
Summer Swoon: 3 Dividend Stocks To Pick Up [View article]
Doesn't the ultra high level of debt (it has a book value of only 22 cents) make it ultra vulnerable to an earnings decrease when interest rates go up at some point in the future?
What if we go into another "financial crisis" and liquidity dries up? How will it service its HUGE debt?
I guess I just don't understand.
Still Learnin
Procter & Gamble Vs. Johnson & Johnson: Dividend Growth [View article]
I'm finally back home from work. This is why I`m teaching my kids about DGI early so that by the time they reach 50 like myself they may be able to think about part-time jobs because they will be raking in the divs.
Thanks for sharing your perspectives. Congrats also Chowder on your div income hitting all time highs (unlike the trees bearing the fruit), isn't it great! Gotta love DG & DRIP`s. I too am pleased with the markets recent decline, have been and for the most part, continue to wait for entry points on some of my favourite stocks. I picked up some BNS today @ 4.25% initial yield (good enough for me). Expect DG to increase my YOC in the years ahead. Hopefully will get some more bites over the next few weeks on some other stocks.
Chowder, I`m going to have to settle down with some ``cold-ones`` during our upcoming long-weekend and think about MCD & PM some more. The ultra high debt PM carries is still strange and scary to me. I guess that`s why we diversify.
Have a good one!
Learnin
Procter & Gamble Vs. Johnson & Johnson: Dividend Growth [View article]
I'm a Canadian investor and hold both PG & JNJ for the Dividend Income Growth and reinvest dividends (unfortunately my retirement account only offers a "synthetic" DRIP -- whole shares reinvested only -- at least I avoid the 15% whithholding tax though).
I've been "stung" by the market before. Manulife was the #1 life insurance company in Canada. Along came the financial crisis, a 50% dividend cut and the stock is still trading at 25% of its pre-crisis level. The reduced dividend has remained "frozen" even though the CEO happily states how much stronger the company is now with its strong capital ratio and much reduced leverage to interest rates and market declines. Show me the money with a dividend increase I say. I won't believe any of it until the dividend starts growing.
I feel good holding PG & JNJ over many of the other favourite DG stocks such as MCD & PM for instance. In MCD's case, it has a BV of $14.39 with a current Price/Book = 6.33. MCD also has a rather high Debt = 87% of Equity. MCD's Graham Valuation is $41.66. It trades at 2x that value and is deemed to be good value by many from what I can tell.
In the case of Philip Morris Int'l, it has a BV of $0.22 with a current P/B = 386 (OUCH!). PM has a Debt/Equity = 55.13. Its Graham Valuation is $4.99. I do understand it may be an industry norm but metrics like these are hard for me to digest, at this time anyway. OUCH again, MCD is starting to look good, relatively speaking.
The picks I make over the next several years are the ones I and my dear wife are counting on to fund the bulk of our retirement expenses about 15 years down the road. I'm determined to choose financially sound, lower risk, slow but steady players that allow me to sleep soundly.
The past performance of MCD and PM has been stellar, yes. But I honestly don't understand why dividend investors looking for value and a certain degree of safety would feel safe owning either of these (especially PM).
I'm relatively new at DG investing and am learning almost daily. I know I must be missing some important concepts regarding the attraction to MCD & especially PM given the metrics above.
It would be greatly appreciated if one (or more) of the seasoned investors on SA are able to provide some clarity.
Thank you so much for all your guidance thus far.
LearninDGI
Dividend Growth Investing: Beating Inflation With Long-Term Investing [View article]
Yes, I've seen the "Retirement DIY" articles and think they're a very good illustration on the DGI strategy in action. I like your approach of not dumping a holding because of "negative noise" but rather holding for the long-term as long as fundamentals remain largely intact(think JNJ).
It's nice to hear some positive comments on WMT. I believe it may be good long-term value here too as it's selling well below the 5yr average high yield valuation.
What confused me about your WMT holding is the article above referred to purchasing the stock 20 years back or so.
Take care,
LearninDGI