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  • When Will Bank Of America Monetize All Those Deposits?  [View article]
    With 2016 net earnings projected at roughly $1.50/share and outstanding shares at 10 billion, this implies $15 billion in excess capital to "deploy" in 2016. Plus another $17 Billion in 2017 based upon $1.70/share in projected earnings. At this pace, the Board of Directors can buyback the ENTIRE company in less than a decade. They will be patient but focused.

    Don't over-think this one with trying to time to next 25 basis point increase from the Fed or trying to guess how much they might loan in the next 30 days.

    After putting the legal issues behind them, I suspect they will act like a business owner. I expect them to raise the dividend, buyback shares (below book value) AND continue to strategically redeem preferred shares (which will reduce expenses).

    I added some more shares today at $16.90

    Long BAC
    Dec 31, 2015. 03:07 PM | 5 Likes Like |Link to Comment
  • How To Return To Oil Sector Investing  [View article]
    Fidelity blocks the purchase of "leveraged" investments UNLESS you change your investor profile/objective to "most aggressive" and accept the disclaimers.

    Profile + Financial profile + Investment objective

    FYI only and I own MLPL at Fidelity.
    Oct 30, 2015. 09:52 AM | 3 Likes Like |Link to Comment
  • How To Return To Oil Sector Investing  [View article]
    I'm still buying and lowering my overall basis... added another tranche at $25 and one at $22 the past week or so. I hope to have a full 5% position with total basis at $26 or $27 in the weeks/months ahead. I was actually hoping for some more "panic" selling at the open today, so I could get a tranche at $18, but it didn't happen. We'll see what tomorrow brings.

    The same managers liquidating positions at the end of the 3rd quarter could be buying at the end of the 4th quarter. Who knows.

    To me, the MLP sector currently kind of "feels" like the hotels after 9-11 and the banks in 2009. The US energy infrastructure is NOT going anywhere. My guess is it is actually going to keep growing. Remain calm and keep some dry powder, -- things can change quickly in the energy sector with 1-2 bad hurricanes, severe winter, oil offline in the Middle East, etc.

    I have a 5 to 10-year investment horizon, so my strategy to build a tax-free income stream from my Roth may be different than others.


    Long MLPL
    Sep 30, 2015. 01:19 PM | 2 Likes Like |Link to Comment
  • The BLS Just Told You To Sell Your Dividend Stocks  [View article]
    Speaking of trends...

    Every day (for the next 20 years) 10,000 boomers retire and face a similar question related to their income investment strategy... currently that choice is "essentially", do I buy CD's/bonds paying 1%-2% or stocks (hopefully with increasing dividends)? Given the choice of a 10-year treasury paying 2% or Coke and PG at 3.5% (and growing at 5%-7% per year), I think the dividend stocks win.

    A quarter point move in short-term rates or a few of them is not going to change the outcome.

    I like articles and recommendations on risk management, so I appreciate that aspect of your article. I'm fine with holding 5%-10% in cash and I'm OK with occasionally trimming a winner that has gotten way ahead of itself, but selling off large portions of your portfolio to wait for a correction is a precarious strategy. The market could just as easily rally 5% if the Fed decides to leave rates alone in September.

    I have a friend that "went to cash" in 2009 and is still waiting for the next big correction to get back in. Market timing rarely works long term.

    There is no pressing need to buy SDY, - if someone wants to invest in dividend growth stocks and is worried about specific P/E ratios, just select new purchases from a growing list of great companies with currently attractive multiples like JNJ, CVX, EMR, DOW, CSCO, WMT, etc.

    Start slow and scale-in. If you do get a 5% sale, count your blessings and buy more.
    Aug 12, 2015. 06:40 AM | Likes Like |Link to Comment
  • How To Return To Oil Sector Investing  [View article]
    SeatleView,

    I think we are on the same page and I also think oil can go lower . I see "hints" of capitulation in the oil/MLP sector, but who knows. Calling bottoms is quite difficult.

    Here is what I can control. I limit MLP's to 5% of my portfolio and then scale-in to my position with a 4-tranche purchase sequence after I pick my fair-value estimate (in this case $34) with the hope that it might go a little lower in price. If all goes well, I will buy $34 (25%), $32 (25%), $30 (25%) and $28 (25%) as an example. It rarely works out that well, but that is the general strategy.

    Who knows what the low is going to be this year? However, I am building a long-term (10-20 years) income stream and I fully expect my annual dividend payments in MLPL (~$5.00) to cover any minor variances on the 1st year entry price.

    Good luck on your next lot! I will probably be buying as well.
    Aug 8, 2015. 11:32 AM | 1 Like Like |Link to Comment
  • 5 Investments Best Held In An IRA  [View article]
    Excellent article. I would like to offer #6:

    ETN's based upon MLP's. ETN's are a debt instrument (w/ credit risk).

    Examples include:
    AMJ - JP Morgan Alerian MLP ETN (5%-6% yield)
    MLPI - UBS ETRACS Alerian MLP Infrastructure (5%-6% yield)

    And for the extremely adventurous (2X Leverage is riskier):
    MLPL - UBS ETRACS 2x Leveraged Alerian MLP Infrastructure (10%-15% yield)

    NOTE: ETN's typically deliver a 1099 (not a K-1) at tax time, but the 1099 is irrelevant (i.e. non-existent) when the investment is inside an IRA (Traditional or Roth).

    This is not tax advice or an endorsement of any strategy, ticker or investment. I realize oil is down (and can go lower) and MLP's (or ETN's based upon MLP's) are roughly 25% correlated. However, I am also a contrarian and a very long-term investor, so I like to nibble when others are panicking. Full disclosure -- I added to my ETN positions several times over the past few months as MLP's have sold off.

    Anyway, this is just a thought-starter as I originally owned AMJ in 2009 in my standard brokerage account and noticed the tax treatment (as ordinary income) when I did my taxes. I have since swapped out of my brokerage and placed the ETN's in my Roth to improve my overall tax efficiency.

    Finally, MLP's typically raise their distributions over time so it has some minor dividend growth / inflation hedge characteristics.

    LONG MLPI and MLPL (in my Roth) and I might purchase AMJ again someday.
    Aug 8, 2015. 10:47 AM | Likes Like |Link to Comment
  • How To Return To Oil Sector Investing  [View article]
    Hi Richard. I really enjoy your articles. I had MLPL on my radar for 2 months and finally pulled the trigger at $34 earlier this week. I got some more today at $32.

    I hold it in my Roth IRA so we'll see what the next 10 years brings. Call me crazy, but 15%/Year yield plus capital appreciation potential (all tax free) sounds pretty good to me.

    After 30 years of investing, I'm fairly immune to volatility and actually enjoy it sometimes when something on my radar finally screams "BUY".

    Long MLPL and KMI
    Aug 6, 2015. 02:13 PM | 1 Like Like |Link to Comment
  • Retirement Strategy: Waiting For A Correction; Surprise! We Are Having One!  [View article]
    RS - Great article and happy to see so many similar items on my "shopping list". I agree with the comments that essentially state that an opportunity is an opportunity. EMR is a buy at $49 in my opinion. If it falls to $48, it does not mean that $49 was a mistake. I simply buy another tranche.

    A company does not achieve 50+ years of consecutive dividend increases without learning a thing or two about managing through a soft quarter or even a year.

    I suspect that EMR will be paying close to $4.00/share in dividends in 10 years and I plan to be collecting that solid income stream.

    Long EMR
    Aug 6, 2015. 12:49 PM | Likes Like |Link to Comment
  • Durability Test: Realty Income  [View article]
    Great article.

    Ida May Fuller was the first American to receive a monthly Social Security check.
    Jul 23, 2015. 01:34 PM | 1 Like Like |Link to Comment
  • Reaves Utility Income Fund: Monthly Payout Currently Offering A 6% Yield  [View article]
    I recently started a position at $29.40 as I have been watching for a while, but thought the utilities had gotten extended a bit. I agree with all the comments on regular monthly income. I will add that the regular increases in dividends are also important to early retirees.

    I also like some of the exposure to railroads (UNP is 4.5% of portfolio) which is a great stock but beaten up right now.

    Long UTG and will add more below $29.
    Jul 21, 2015. 01:22 PM | Likes Like |Link to Comment
  • Chevron Hasn't Frozen Its Dividend Yet  [View article]
    Keep the faith. The management team is just preserving any and all sources of cash as oil bottoms. This goes along with their 2015 capex spending reductions. As oil recovers, I'm betting the dividend will be increased and capex budgets will be increased for 2016. I will probably nibble in the $105 range this quarter.

    Long CVX
    May 1, 2015. 11:50 AM | 1 Like Like |Link to Comment
  • Qualcomm Rewards Investors In A Big Way  [View article]
    I think a lot of dividend growth investors might overlook this powerhouse. This is not anything new to existing Qualcomm shareholders. In fact, I actually have my calendar reminder set for this yearly "raise".

    And, I find the $15 billion buyback quite refreshing. A strong vote of confidence from the board following the China antitrust settlement.

    Long QCOM
    Mar 9, 2015. 10:30 PM | 6 Likes Like |Link to Comment
  • Helmerich & Payne: Best-In-Class All-Around Driller  [View article]
    Good article Dan. Thanks.

    It's funny sometimes. Over the past 3 years, I have read lots of comments that dividend "aristocrats" and "champions" are never on sale and you simple can't live on 1%-2% yield in retirement. Well, here you go... a 42-year dividend growth machine that is on sale and paying over 4%.

    The time to add to or build a DGI portfolio is when certain stocks are on sale. Be patient, but be bold when you have an industry leader a discount. It does not happen often with aristocrats. Over time, you will make much more than you lose with this strategy.

    You don't need to bet the farm, but I say close the eyes, pinch the nose and buy a tranche. If it falls to $58, buy another tranche. Rinse and repeat until it is 2%-3% of your entire DGI portfolio.

    Merry Christmas.

    LONG HP and bought some more this week at $65.
    Dec 25, 2014. 11:54 AM | 2 Likes Like |Link to Comment
  • General Electric: A Golden Total Return Opportunity Is Never Offered Twice  [View article]
    David,

    Thanks for the article. I worry less about the dot com bubble and the financial crisis than others who comment. Turning to the future, GE is going to earn upwards of $2.00-$2.10 in 2016 and they will probably get a 15 multiple.

    Throw in a dividend increase in Dec of 2014 and Dec of 2015 and GE hits $30/share. And it will still yield 3%+.

    Long GE
    Nov 18, 2014. 01:05 PM | 1 Like Like |Link to Comment
  • Prospect Capital: Revisiting The Dividend Debate  [View article]
    AA,

    Another great article. I appreciate your writing style.

    I am long PSEC since 2008 with a cost basis of $8.32 (YOC = 16%)

    With $0.20/share of excess dividends on the books, I plan to wait it out for a few more quarters. Even if they miss fully covering the dividend by 2-4 cents each quarter, we still have 4-6 quarters before things get more critical.


    Who knows, mix in some "one-time" divestitures and they might be able to stretch closer to 6-8 quarters.


    Remember, they have a lot of floating investments. As interest rates begin to rise in 2015, those 1-2 cent dividend coverage "deficits" may suddenly be covered more easily. I also suspect management will discuss this on future calls as the Fed becomes more active with rate hikes.


    Wait and watch and adjust as needed... I still think it is a tad early to panic.
    Nov 17, 2014. 06:08 PM | 4 Likes Like |Link to Comment
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