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  • My Six Favorite Dividend Stocks [View article]
    Speaking as a recently (July 2010) retired financial officer, an unequivocal "NO"! Payroll is too mission critical. Compliance deviations are not tolerated by regulators. Service it too important. ADP is best of breed and the money a company can save with Brand X is immaterial in the realm of things. Going to India, with something so time sensitive, is madness.

    Long: ADP
    Nov 24, 2010. 08:47 AM | 8 Likes Like |Link to Comment
  • How Reinvesting Dividends Accelerates Yield on Cost [View article]
    but, Tim,

    Current yield is an actionable measurement while YOC is not. An investor can only compare current yields on alternatives whether in or outside his existing holdings.
    Oct 18, 2010. 09:36 AM | 8 Likes Like |Link to Comment
  • 15 Dividend Stocks Defending Shareholder Returns [View article]
    Mozman: I retire at the end of July. While most of my money is in bonds, I will not decrease my holdings in dividend paying stocks. When I look for "safe" bonds with decent yields, I find that the issuers are states like California and Illinois. All too often, I find that underlying issuers have junk or lowest grade investment status that is masked by insurance. I find that decent yielding bonds depend on revenue streams from non-essential services. I find that decent yields require maturities of fifteen years or more. Good dividend paying stocks with track records of increases will have higher yields on cost long before fifteen years have lapsed.

    There will always be risk in everything. Look at the price paid by CD investors who sought capital preservation at any cost. Retirement is no reason to abandon diversification as a means of managing risk.
    Jul 24, 2010. 11:01 AM | 8 Likes Like |Link to Comment
  • 20 Dividend Stocks With a 20% Yield in 20 Years [View article]
    My visual observation is that the best prospects for the highest YOC seem to be those stocks already yielding about 3% as opposed to those yielding about 2%. It will take a considerable period of a higher dividend growth rate for a stock with a 2% yield to grow to where it can cumulatively surpass a solid stock that yields 3% today. As for a twenty-year horizon, think back to who were the titans of industry in 1990 and where many of them are today.

    I would not advocate investment in "amalgated risk". However, a stock yielding 2% or less today, is not a "dividend stock." There are other reasons to hold such stocks, as I am long UTX, but not for income.

    Long: UTX, MCD, HD (not LOW), PG (not CL).
    May 5, 2010. 09:01 AM | 8 Likes Like |Link to Comment
  • If You Like Coca-Cola, You Should Love PepsiCo [View article]
    Isn't it time to stop comparing KO and PEP? KO is a soft drink company. PEP is a diversified food processor that should be compared to GIS, KRFT, and MDLZ.

    Long: All of the above
    Jun 30, 2014. 08:12 AM | 7 Likes Like |Link to Comment
  • 4 Opportunities Using Dividend Growth Rate And Yield On Cost [View article]
    >>> suppose you have an investment initially yielding 1% that grows at 15% annually for 40 years. By the 40th year, an initial $100 investment would have paid out a total of $1,779 in dividends. By comparison, an investment initially yielding 5% and growing at 3% annually for 40 years would have paid out only $377 in dividends.<<<...

    This statement refutes the article in its entirety.

    First, to validate the superior investment strategy, an investor should wait forty (40) years for fruition. Is the world and corporate America the same as it was in 1973?

    Second, a forty year horizon implies that a twenty-five year old, saving for his retirement at sixty-five would have his entire nest egg in place on day-one.

    Even the hypotheticals don't make sense. To use a 15% dividend growth rate, isn't the author implying that earnings to support that growth will grow at 15%? How many companies have sustained 15% earnings growth over forty years?

    Try some real companies. It would take twenty-five years for cumulative dividends on KO (yield 2.8%, DGR 8%) to equal those of T (yield 5%, DGR 2.4%). Twenty-five years is too long for a retiree or anyone else to wait for the superior strategy to bear fruit. Are those in the market either fools or people willing to wait twenty-five years to invest in KO? No. They are people who believe that superior earnings growth at KO will drive TOTAL RETURN. Why is the term "earnings" not used in this article? I'm sorry, Richjoy used the term twice in his response.
    Jul 8, 2013. 08:23 AM | 7 Likes Like |Link to Comment
  • 25 Top Cash-Rich S&P 500 Non-Financial Companies [View article]
    >>>The employees (not only the CEO!) should demand pay increases, because it is they who worked for all this cash.<<<

    Prof, it's obvious that you never had a meaningful job in the private sector. Which employees do you mean? Do you mean the knowledge workers who develop new products and processes, and improve existing products and processes? Do you mean the knowledge workers who develop new customer relationships and improve existing ones? I suspect you mean the ones who clock in not a minute too soon and clock out not a minute too late and spend as much time as possible in the rest rooms and otherwise challenging the lower limits of their work rules.

    One thought that crosses my mind is that if gasoline had risen in price at the same rate as university tuition did in the years between my graduation and my retirement, we would be paying $8.00/gallon. People like yourself would be clamoring for the nationalization of oil companies and criminal prosecution of their CEO's.
    Jun 2, 2013. 08:50 AM | 7 Likes Like |Link to Comment
  • Solution To Bond Investors' Yield Dilemma? Consider Dividends [View article]
    >>>dividend paying equities and bonds are not substitutes

    they have quite different risk profiles.<<<

    I agree that the risk profiles are different. However, in evaluating choices, investors should recognize one additional, but very real risk. If we follow the guideline of withdrawing 4.0% of our portfolio each year from a portfolio yielding 2.3%, we will lose 1.7% of our portfolio with no chance of recovery. What proportion of fixed income investors consider that "risk"?
    Nov 14, 2011. 08:48 AM | 7 Likes Like |Link to Comment
  • 8 Income Investing Tasks To Complete Before Your Financial Smarts Erode [View article]
    Dave, your article contains many good points. Even more importantly, it contains a comprehensive action plan. Let me add some of my own thoughts, if I may.

    There is not necessarily anything wrong with 50 positions. Some may say it is too many to manage, especially for a lay person. Take any stock and you'll find professionals who say "buy" and those who say "underperform". Earnings surprises are a fact of life, even for the professionals. I carry over 40 individual common stocks, arrayed in industry baskets, in my portfolio. I thing PG is the "best", but I hold CL and KMB in the event that I am wrong.

    I do not pay attention to YOC as it is not actionable however interesting a metric it may be. On November 7, KO yielded 2.66%. Am I satisfied with that as, first, a good enough yield, and second, the prospects for the company going forward, and third, how it fits within my portfolio?

    Third, I recognize all the companies you mention are world class participants in the global economy. Still, I would add some direct investment in companies HQ'd outside the USA. My favorites include BCE, NVS, RDSB, VOD, TD, and TOT (recently added for its 6.44% yield). A portfolio should include diversification among currencies.

    Fourth, I would not sell a stock simply because the company did not increase its dividend at any one time. If a stock like RDSB is yielding more than CVX and XOM by considerable margins, the dividend need not be "going anywhere" because it's already "there".

    I don't disagree that an aging investor should appoint a proxy. I have one daughter. At 65, I don't think I'm ready to take that step yet.

    All in all, your article presents an excellent action plan.
    Nov 11, 2011. 08:46 AM | 7 Likes Like |Link to Comment
  • A Simple Dividend Strategy That Will Get You 4%, Lower Volatility and More Sleep Part 1 [View article]
    >>>PBI is very well managed. Despite shrinking revenue they have held their free cash flow steady for several years. As of 2010 their FCF was almost 3 times the size of the dividend. They hold enough money, in cash, to pay the dividend for 2 full years if need be. And they have held their debt ratio steady.<<<

    Their free cash flow is steady because they are liquidating the company. Over the last four full years, their depreciation of $1,405 million was $616 million greater than their capital expenditures. In the last year, depreciation of $304 million was over two and a half times capital expenditures of a mere $120 million. During the first six months of 2011, depreciation was almost twice capital expenditures.

    Long-term debt has risen over the last four full years from $3.8 Billion to $4.2 Billion while losses have caused stockholder equity into the red (i.e., more liabilities than assets).

    The negative equity is without impairment charges to intangibles. I am not against seeing intangibles on the balance sheets of pharmaceuticals or defense companies because those guys have proprietary technologies that were paid for. What proprietary technology could PBI have to be carried into the century after things such as email, EDI, and EFT that could justify carrying $2.6 Billion (with a B) in goodwill and other intangibles?

    I will admit they are doing a good job of managing thru the circumstances. However, an 8% yield is not for the quality of any company. It is a risk premium and a big one because their dividend is not sustainable.
    Aug 14, 2011. 04:21 PM | 7 Likes Like |Link to Comment
  • A Dividend Champion Portfolio for April [View article]
    Mex, it seems to me that your MCD for CAT was to swap an income stock for a growth stock. MCD's yield is twice that of CAT. Its five year dividend growth rate (29.5%) is two to three times CAT's dividend growth rate (12%). I am long both, but with a greater position in MCD. Both are great companies, but to go with CAT over MCD because CAT is "a steady dividend increaser" doesn't wash.
    Apr 6, 2011. 01:15 PM | 7 Likes Like |Link to Comment
  • Dividends in Danger? Worries About Sysco, Hudson City, Pitney-Bowes [View article]
    "The numbers speak for themself."

    Analysis is seeing beyond the numbers.
    Mar 26, 2011. 08:53 AM | 7 Likes Like |Link to Comment
  • Retirees: 7 High-Yield Pharma Stocks for the Golden Years [View article]
    When the Lipitor patent expires this year, it will be Katie Bar the Door for PFE. Prospects for sustaining the dividend will not be as "reassuring" as the author would have us believe.
    Feb 18, 2011. 11:57 AM | 7 Likes Like |Link to Comment
  • How to Invest in Dividend Stocks [View article]
    I steer far away from CLX. Their dividend payout is over 95% of TTM earnings. Their debt/equity is over 20/1. In other words, their balance sheet is a house of cards.

    Why would anyone invest in this company when PG yields only 25 basis point less, at a pay out of less than 50%, and debt to equity of 1/2? What am I missing?????

    Long: PG
    Feb 17, 2011. 02:47 PM | 7 Likes Like |Link to Comment
  • 22 High-Yield Large-Cap Stocks With PE/G Ratio Less Than 1.5 [View article]
    This is an outstanding screen for dividend investors. The notion of combining yield with low PEG ratios gives evidence of a company's capacity to increase its dividends over time. I may or may not agree with some of the specific stocks, but it's a great place to start.

    My next steps would be look to balance sheet strength and whether I agree that the business model supports the implicit growth.

    BTW, the biggest problems that ENR and KMB have are that they have to compete with PG.

    Long:ABT, CVX, DD, KMB, LMT, MCD, PG
    Feb 4, 2011. 09:29 AM | 7 Likes Like |Link to Comment