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depraved_miscreant

depraved_miscreant
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  • Preferred Stock Investing: A Simple Guide To 7% Yield - Part 2 [View article]
    Actually, the exact returns may not be knowable, but one can estimate. Most floating-rate preferreds pay a fixed percentage added to a variable rate, e.g., the LIBOR 90-day rate. Plus most have a floor of 3.5% to 4%. MET-pA, e.g., pays the greater of 4% or 1% plus the 90-day LIBOR. As I write, that LIBOR rate is 0.42%, but it wasn't that long ago when that rate was north of 4%. If interest rates were to spike, it is reasonable to expect share prices to follow, i.e., rise. How much, exactly? Difficult to determine, just as it is difficult to know the precise effect higher rates would have on a specific fixed-rate issue. It all depends on the sector, health of the issuer, etc.

    The conventional wisdom is that rates will remain low for some time, but nothing lasts forever. I bought several fixed-rate preferreds when they were on sale in 2009, but I have hedged that position with a few floaters and the RYDEX Inverse Treasury Fund.

    Thanks for your articles. And I am very impressed with the extra effort you obviously put into your extensive author comments.
    Nov 2, 2011. 01:45 PM | Likes Like |Link to Comment
  • Likely To Fail: RBS Launches Questionable Pharma ETP [View article]
    Editor needs to correct the tag for ticker 'SPH', Suburban Propane Partners, a company completely unrelated to this article.
    Nov 2, 2011. 08:20 AM | Likes Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    Bluejay, the author of this article agrees with you.

    http://bit.ly/uWyIuq

    According to him (Ben Strubel), Exelon has funded the pension plan to the point that any remaining 'underfunding' is insignificant.
    Nov 1, 2011. 02:56 PM | 1 Like Like |Link to Comment
  • 9 Energy Utilities With Low Dividend Payout Ratios [View article]
    Correction in the above re FCF for Integrys Energy (TEG). The company also showed positive FCF for FY2009.
    Oct 31, 2011. 07:46 PM | Likes Like |Link to Comment
  • 9 Energy Utilities With Low Dividend Payout Ratios [View article]
    Just read '5 Dividend Stocks on Sale Now'. My favorite valuation metric is FCF Yield and, of the 5, only one looks like a buy on that basis: TEG, a utility of all things. TEG sports a FCF Yield of 17.3% for FY2010 and 13.5% TTM. Of note is that 2010 was the first year in a decade in which TEG showed positive FCF and it looks like 2011 will be a repeat of that. On the minus side, TEG doesn't qualify in my screen mentioned above, although the 3-year dividend CAGR is north of 10%. And its payout ratio is very high, maybe too high. Still, there's more than one way to evaluate a stock. I see FCF and I smell what may be value. It's time to investigate.
    Oct 31, 2011. 06:44 PM | Likes Like |Link to Comment
  • 9 Energy Utilities With Low Dividend Payout Ratios [View article]
    FWIW, I built a spreadsheet to screen utilities. I add the current yield to the lowest of the 3-, 5-, 7-, and 9-year dividend growth rates and look for those whose sum is greater than 10%. Besides a low payout ratio, I like to see at least 7 annual dividend increases in the last decade. Of the companies mentioned, EXC, NEE, NU and PPL qualify.

    I recently read (could have been here on SA) that NU gets a large percentage of its revenue from Connecticut, but that CT regulators are very unfriendly toward the utility. Any opinions, pro or con ?

    I am long PPL and the PPL-U and PPL-W equity units and am looking to diversify. I am looking at EXC, NU and AVA, as well as POR, although the latter lacks a 10-year history.
    Oct 31, 2011. 06:06 PM | Likes Like |Link to Comment
  • Here's What Mr. Market Says: 'Ban Dividends' [View article]
    Very clever, DVK. Ranks just behind your 'Periodic Table of Dividend Champions'.
    Oct 31, 2011. 03:54 PM | 1 Like Like |Link to Comment
  • Why Buy Annaly? [View article]
    Besides RS, I also look forward to yours, Dave.
    Oct 30, 2011. 11:55 AM | 2 Likes Like |Link to Comment
  • Why Buy Annaly? [View article]
    Agnew said it; William Safire was his speech writer at the time and wrote it. He was a political writer, but, to me, he was primarily a guardian of the language. No reason to buy the NY Times now that Safire is gone, plus my parrakeet died......
    Oct 30, 2011. 11:48 AM | 3 Likes Like |Link to Comment
  • Why Buy Annaly? [View article]
    You wrote "negative nabobs". Safire penned "nattering nabobs of negativism". Maybe you're no Safire (I really do miss his writing), but I keep reading your stuff anyway and manage to enjoy most of it.

    I be long NLY. Forgive the grammar, Bill.
    Oct 30, 2011. 08:35 AM | 2 Likes Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    After re-reading what I wrote, you're right, RS. Good one. It is fuzzy writing. I hate when that happens.....

    I'm looking to add long positions in a utility or two. The sector has had a nice run lately, so there's time for additional DD (that's due diligence and, in the interest of clarity, has nothing whatsoever to do with DuPont).
    Oct 28, 2011. 05:19 PM | 1 Like Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    Thanks for the info. I only own one utility (PPL) and I want to add another (or two) and EXC is on my short list.
    Oct 28, 2011. 07:58 AM | Likes Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    In the interest of completeness, the author should have mentioned EXC's underfunded pension liability. I have seen it estimated @ $5.8B or @24% of total liabilities. Opinions on this are mixed: some consider it manageable, others do not. I consider it a large enough issue to at least be mentioned in any serious opinion piece. BTW, I have no position in EXC, so I'm not certain about the exact numbers.
    Oct 25, 2011. 08:21 PM | Likes Like |Link to Comment
  • 3 Potential Multi-Baggers For Long-Term Investors [View article]
    The debt is indeed in the billions and is due to large acquisitions. But it's there and the debt number is a far cry from the $18M total debt the author cites for BIP. Another SA author not to trust.
    Oct 22, 2011. 01:21 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    Thanks. BTW, what ING calls Weighted Average Reset, Eaton Vance calls Average Duration.
    Oct 22, 2011. 08:42 AM | Likes Like |Link to Comment
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