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ls1gto

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  • The Bear Claws My Dividend Growth Portfolio - Will I Cut And Run? [View article]
    High,

    I find your arguments weak to say the least. In practice, the theory does hold up as long as you invest in quality. Not every time, but usually, as can be seen by looking at 2008-2009 record track.

    Point 1: Comparing these types of companies to DG companies is like comparing apples and oranges. The only things they have in common is that their stock may be trading on NYSE. Investing based on yield is referred to as 'yield chasing' and it usually does work out as you described. Dividend aristocrats do not maintain their yield as a percentage of stock price. Here is an example for you of the contrary. Take a look at TGT over the past few years. Their stock price was struggling in 13-14, but instead of cutting, TGT continued to increase the dividend by double digits (!). All of a sudden the yield was almost 4%, which was about double their historical yield. Now it is back to 2.5% because the stock price recovered.

    Point 2, again, none of the companies you listed are quality. I don't even think any of them are on CCC list. You are scraping the bottom of a barrel. How about SLB that just announced 20 or 25% dividend increase?

    Point 3, maybe true for foreign companies that pay dividends in foreign currencies. But aristocrats pay their dividends in US Dollars. I can be diversified internationally by owning KO, for example, because Coke is sold in just about every country on earth.
    Mar 24, 2015. 05:27 PM | 1 Like Like |Link to Comment
  • The Bear Claws My Dividend Growth Portfolio - Will I Cut And Run? [View article]
    My question to DGI critics is always along the lines of what do they invest in and how are they expecting their stocks to perform if the market goes south?

    At least I have my dividends that will continue to come in even in the darkest times (2008-2009). IMO it is a lot easier to continue holding a stock that continues to pay and raise a dividend than one that does not when both are down 40%.
    Mar 24, 2015. 01:11 PM | 3 Likes Like |Link to Comment
  • Exxon Mobil: Grow Income Now As The Sector Takes A Beating [View article]
    I find this article a little too optimistic and somewhat rear-looking.

    20% decline (actually less) is really not that steep when you consider oil declined over 50%.

    XOM PE has always been well below S&P 500 average. Looking at FastGraphs, over the past 10 years XOM average PE has been about 12. 20 year average PE has been 15.4, which is about in line with estimated 2016 (!) earnings. In other words it appears to be fairly priced.

    Lastly, 36% payout ratio is from the past and really is misleading at this point. Looking at estimated 2016 earnings, again, it is more like 60% with current dividend. It is 70% looking at estimated 2015 earnings.

    I do not see it as a screaming buy this article appears to make it out to. Having said that, I am long XOM and think it is a great company that will prosper in the long term, but unless the price of oil recovers in the near future, XOM will face some headwinds this year which may push the price even lower. I also do not see the stock price returning to anywhere near 100 anytime soon. Just my opinion, of course.
    Mar 24, 2015. 12:51 PM | 14 Likes Like |Link to Comment
  • 2015 could be the year of the blockbuster drug [View news story]
    Okay, so I choose to receive email alerts for GILD and ABBV, but I do not see why this is 'breaking news' for either of those companies?

    May be off topic, but is there a way to configure the alerts to only truly receive breaking news, such as earnings, dividends, or any news that actually move the stock price?
    Mar 23, 2015. 04:52 PM | 11 Likes Like |Link to Comment
  • Should Dividend Growth Investors Fear Interest Rate Volatility? [View article]
    Nicholas, usually I have a tough time selling my positions also. I will only sell positions that have gone up if I see something more interesting to invest the funds in at present time, and if I believe that the probability of the stock price decreasing from current point is higher than the probability of it continuing to go up. I also try to replace the stock I am selling with another that has similar characteristics. If there is not enough gain to justify selling part of the position, I end up selling the whole thing. For instance, several months ago, I have sold SO at 48 (I think I was about 15% up at the time) and bought T at 33 in my wife's IRA. At the time it just did not seem like SO was going to go any higher and PTs on all analyst reports I looked at suggested that the expectation was for SO to actually decline. The reason I have bought SO in the first place was due to dividend yield - I was going to use the cash to reinvest into other stocks that actually have a higher DG. So if I was to sell it, I needed to replace it with something similar.

    I do not really expect T to go up, just like I did not expect SO to go up, but I do not expect it to go down much either, which I could not say about SO. It also had a higher yield at the time than SO. So it just made sense to me.

    I guess what I am trying to say is I will only sell if I think I can replace it with something similar, but better imo. And my preference is to leave the capital gain invested to have a no-risk positions. Doesn't always work out that way, but there is no better position than one where your original investment is essentially $0.

    I don't consider trimming all of my positions that go up. For instance, AAPL is up 70% but I would actually rather add to it than trim.

    I was looking at buying KR last year, but I think it already started going up and never came back down. I missed the train with that one. If I were you, I would only trim it if I could replace it with a similar class of stock. I am guessing decent dividend growth? I don't really remember what made me interested in it back then.

    Right now the one stock that I do like is CMI. I think you have a position in it also. I am actually looking to see if I want to sell anything to add to CMI. Don't really want to add new cash to market when it is flying at an all time high.
    Mar 20, 2015. 11:14 AM | Likes Like |Link to Comment
  • Should Dividend Growth Investors Fear Interest Rate Volatility? [View article]
    TF, I feel similar way about companies that are considered 'core' DG stocks. However, I would not trade KO for T at present time for additional 2% yield points. T has basically been flat for years now. DG is also, really, non-existent in my view. And looking at earning forecasts, it is expected to stay that way, although I am a little puzzled by $40 PT S&P Capital IQ currently has.

    I actually think KO looks more attractive right now than T. I think KO is a safer investment if the interest rates start to go up next year because it is expected to have some growth going forward. How quickly things change - few months ago I was thinking about selling some of my KO at $45. Also, historically, KO has been a good buy when dividend yield goes above 3%.

    I own about equal positions in both of these. They serve somewhat of a different roles in my portfolio.
    Mar 20, 2015. 10:42 AM | Likes Like |Link to Comment
  • Should Dividend Growth Investors Fear Interest Rate Volatility? [View article]
    Good article Nicholas. I've said it before, I think our investment styles are similar. I too do selective div reinvestment monthly - I like this because it allows me to have some hand-on portfolio management. I cant just sit back and 'watch the grass grow' all the time.

    Reading through your action plans, I actually think I do all 3. I am not panicking and just continue to reinvest my dividends. I do not, however have all of my cash in the market. Never have, never will. But I would probably be willing to add if I see a value. Just recently I have added new cash to my ABBV position at around $55, but other than that I do not currently see anything exciting out there. Other than div reinvestment, that was the only change in my portfolio ytd. I also do occasionally take my gains off the table. Or what I actually like to do is pull my initial investment $ out of the stock but keep the capital gain invested. I have done this with several positions that have gone up, say 40% where I just thought that there was a higher probability of the stock retreating to it's historical valuation than continuing upward. At the end of the day, even if I was wrong and the stock kept on going up, I do not feel bad about it. I still own it, even though my position is about 2/3rds smaller, and it is just a nice feeling to have a no-risk position. I do not even monitor those as much.

    GL to you and keep your articles coming!
    Mar 19, 2015. 02:39 PM | Likes Like |Link to Comment
  • Buh-Bye Wal-Mart, Hello Emerson Electric, Qualcomm And AbbVie [View article]
    Mike, great article, as usual. I have also added to ABBV position recently.

    I was curious, though, what were the red flags raised by Jefferson Research regarding CMI, if any? It is one of my holdings that I would also like to add to. I don't have access to Jefferson Research, but S&P Capital IQ that I do have access to rates it as a strong buy (5 stars), FV of 188 and A- quality ranking.

    Also, CMI has been growing dividends at double digits since 2006, and 25% last 2 years, according to fast graphs. Their earnings are also expected to increase by about 10% per year. And they have very low debt.
    Mar 10, 2015. 01:10 PM | 3 Likes Like |Link to Comment
  • Buh-Bye Wal-Mart, Hello Emerson Electric, Qualcomm And AbbVie [View article]
    I have owned ABBV since spun off also. They did raise the dividend twice this year, but it is a little misleading. Prior to that they paid .40 for 5 consecutive quarters. Then .42 for the next 3. Then it was raised to .49. So maybe they just forgot to raise it at the beginning of 2014 and have now 'caught up'? :)

    Also I have just added new $ to my position.
    Mar 10, 2015. 01:01 PM | 1 Like Like |Link to Comment
  • Apple cuts Apple TV price, confirms HBO Now partnership (updated) [View news story]
    derf, they may be making no money on the tv itself but the tv makes it dangerously easy to buy content on iTunes. 2 clicks.
    Mar 9, 2015. 01:55 PM | 1 Like Like |Link to Comment
  • Apple cuts Apple TV price, confirms HBO Now partnership (updated) [View news story]
    How soon does the price usually get updated at Apple store and other retailers? I was actually about to buy another Apple tv for 2nd room but will wait now until I can get one $30 cheaper :)
    Mar 9, 2015. 01:51 PM | Likes Like |Link to Comment
  • Exxon's Tillerson on M&A: "No limitation on what we might be interested in" [View news story]
    Where do you think electricity used to charge electric automobiles comes from? Fossil fuels mostly. Xom is the largest nat gas producer in the US. And who is going to pay the premium for electric car with 2$ gas? Definitely not an average driver. Do you have an electric vehicle?
    Mar 5, 2015. 12:55 PM | 12 Likes Like |Link to Comment
  • HBO said to work with Apple as launch partner for standalone offering [View news story]
    Imo HBO is one of the better apps on Apple tv functionality wise. I do think 15$ / mo is a bit steep for their content though. I would rather pay 20$ to get a new release on iTunes before it comes out on DVD.
    Mar 4, 2015. 04:43 PM | 1 Like Like |Link to Comment
  • Oil majors failing to find reserves to counter falling output [View news story]
    This is nothing more than an attempt to create some noise. I would not rely on reserves too much. Oil companies have a lot more reserves than what they put on paper. To be included as 'reserves' in FS, management must make a funding commitment to actually develop them. In other words, they decide what number is going to be shown in their FS. They are not going to commit to too many development projects with $50 oil so that is why it 'looks' like they are not replacing their reserves. When the oil price increases, more projects will become economical and the reserve number will go up.
    Feb 6, 2015. 09:42 AM | 1 Like Like |Link to Comment
  • Predictable Fast Growing Healthcare Dividend Growth And Growth Stocks For Your Retirement Portfolios: Part 5 [View article]
    Chuck, I really like all of the FAST graphs updates that have taken place. The application looks more modern and I find it easier and quicker to use. Just wanted to express my gratitude to you and your team for providing such a nice and affordable tool for DIY investor.
    Feb 5, 2015. 02:32 PM | 8 Likes Like |Link to Comment
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