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  • 6 Investment Grade Corporate Bonds To Explore  [View article]
    varan, the current yield on FGMNX is 3.15%. The "cumulative performance" of the fund, which has been from 7% to 8% over the last four years, is derived from rising premiums on underlying securities. As the securities approach maturity, the premiums will evaporate.

    The risk with any bond fund is that when interest rates rise, the value of underlying securities falls. As some investors stampede for the doors, to stem their losses, the fund manager will have to liquidate securities at declining prices. Those who stay with the fund will share the losses equally with those who bolt for the door.

    Keep in mind that a fund can never be more than the securities it holds. Fund managers have no alchemy that will make two plus two plus two equal seven. This particular fund has a 45 basis point expense ratio. Its managers must earn 45 basis points more than the securities in the fund to equal the return of the securities in the fund. Not gonna happen, will it?
    Jan 16, 2012. 09:09 AM | 2 Likes Like |Link to Comment
  • 5 Great Utilities For Robust Dividend Income  [View article]
    jarco, do you give any weight to the regulatory environment in which ED operates?
    Jan 14, 2012. 12:18 PM | Likes Like |Link to Comment
  • McDonald's To Stay Above $100; Wendy's And Yum! Are Riskier  [View article]
    Kingkang, the same could be said of most companies. Growth is seen in emerging markets. The USA and western Europe are saturated for YUM, MCD, and many companies that don't even compete with those two.

    Long: MCD
    Jan 13, 2012. 08:54 AM | Likes Like |Link to Comment
  • McDonald's: Will This Dividend Champ Continue To Perform Over The Next Decade?  [View article]
    It would depend on a number of factors. In MCD's case, the increase may be attributable to the market's appreciation of the stock having been undervalued. To me, the business model and how it will drive the future earnings is the key.
    Jan 10, 2012. 10:10 PM | 2 Likes Like |Link to Comment
  • Coca-Cola: A Conservative Dividend Stock For 2012  [View article]
    I would like to see more companies adopt the PEP approach of paying dividends on the first business day of each year rather than in December.
    Jan 10, 2012. 09:01 PM | 1 Like Like |Link to Comment
  • Fast Food Titans: Yum Can Beat McDonald's In 2012  [View article]
    sune, time will tell. However, I don't see people embracing fried chicken, pizza, or taco's as healthy choices.
    Jan 10, 2012. 08:55 PM | Likes Like |Link to Comment
  • McDonald's: Will This Dividend Champ Continue To Perform Over The Next Decade?  [View article]
    >>>I honestly hope to see an opportunity in the next one to two years, ideally at $85 or lower, to initiate a position.<<<

    How many companies are in your current portfolio that you would not like to buy at 15% less than they are trading at today?

    Long: MCD
    Jan 10, 2012. 08:48 PM | 1 Like Like |Link to Comment
  • Coca-Cola: A Conservative Dividend Stock For 2012  [View article]
    Robert:

    FWIW, KO has its annual meeting in April and the payment may be made to coincide with that. Personally, the issue of whether a company pays dividends in April or in March, is not worth much thought in considering it as an investment.

    Sheldon

    Long: KO & PEP
    Jan 8, 2012. 08:49 PM | 1 Like Like |Link to Comment
  • 5 Buy And Hold Forever Dividend Stocks  [View article]
    And here, Dave, we find common ground. I would not add to my MCD position at this point. I bought it as an income stock, but I have no problem with it having become a growth stock. I will hold it, but, especially since it has become my number 2 holding, I see no compelling need to add to my position.

    I don't use stop loss orders either. If there is a "flash crash" situation triggered by computerized trading, there is no assurance that a stop loss at 90 will not execute at 70.

    I agree too that MCD coffee is very good. I wonder if money could be made by selling the beans in groceries.

    Sheldon
    Jan 7, 2012. 03:53 PM | Likes Like |Link to Comment
  • 5 Buy And Hold Forever Dividend Stocks  [View article]
    Dave:

    I acquired MCD from 8/09 thru 2/11 at prices ranging from 54 to 74. I remember Cramer advising a caller to sell at 80. I held and saw a decline to 72, but I kept faith and held. Now MCD is about 100.

    It is tempting to book a gain. But that would be market timing as I believe that, in the intermediate term, MCD will go to 107-109 and, in the long term, MCD will go considerably higher. I hope I am not emotionally attached. However, when I look at competing investments, I don't see any consumer discretionary in MCD's league. This is notwithstanding that I hold multiple positions in every other market basket in my portfolio.

    Sheldon
    Jan 7, 2012. 10:23 AM | Likes Like |Link to Comment
  • 5 Buy And Hold Forever Dividend Stocks  [View article]
    FWIW, Merrill Lynch and S&P have "Buy" ratings on MCD with target prices of 107 and 109, respectively. While I try to use a market basket approach to structure my portfolio, I can't see anyone (including YUM and DRI) in MCD's league insofar as an efficient business model with positive same store sales driven by multiple factors, including extended hours, new menu items, remodels, and effective marketing.

    Even, in looking at YUM and DRI, each has multiple brands to promote. MCD can concentrate all resources on one brand and across thousands of doors.

    Long: MCD
    Jan 7, 2012. 09:52 AM | Likes Like |Link to Comment
  • Fast Food Titans: Yum Can Beat McDonald's In 2012  [View article]
    If you compare business models, MCD's is far more efficient than YUM's. One brand to promote rather than three. Stores that serve food appropriate to breakfast, lunch, snacks & breaks, and dinner vs. a more limited day. That's why MCD's margins, inventory turnover, return on assets, and sales per employee exceed those of YUM by wide margins.

    Long: MCD
    Jan 7, 2012. 08:41 AM | Likes Like |Link to Comment
  • 5 Dividend Stock Rebound Opportunities  [View article]
    >>>RRD and DLX pay nice dividends and promise to enter the digital world, but can they? I don't know.<<<

    Allow me to answer the question with a question. Exactly what expertise do those companies have in the digital world that KO does not have?
    Jan 7, 2012. 07:40 AM | Likes Like |Link to Comment
  • 5 Dividend Stock Rebound Opportunities  [View article]
    FWIW, I worked for a competitor of RRD (privately held by venture capital) and would not put a penny of my money into anything tied to physical images including RRD, DLX, PBI, or EK. It is a dying business.

    I see TOT (as part of my oil market basket) as an income play with some aspects of growth tied to the price of oil. I hold CVX as a growth play with some income. Diversification is the only free lunch.
    Jan 6, 2012. 10:02 AM | Likes Like |Link to Comment
  • United Technologies: Dividend Growth Analysis  [View article]
    >>>I do not own shares because the yield is not compelling for my risk tolerance. I would prefer to own shares in a non diversified blue chip company, such as Coca Cola (KO). Coca Cola sells sugar water around the world. The company operates a defined business model and a 2.70% annual dividend yield.<<<

    I believe both belong in a diversified portfolio. I hold both and I hold HON and PEP. Diversification is one way of managing risk. However, none of these is a true "income" holding. It would take many years for cumulative dividends on these stocks to equal those of a true income holding such as T or an MLP. Nonetheless, from a standpoint of total return, they are the inflation hedges of a portfolio despite modest, but real, income.
    Jan 6, 2012. 08:52 AM | 2 Likes Like |Link to Comment
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