5 Stocks Meeting My Entry Criteria for Dividend Investments [View article]
Dividend Growth Investor, You have good approach useful for beginners in DGI. They should remember that "removing all stocks whose dividend payout ratio is higher than 60%." screen closes a door to some good DG stocks (MLPs, REITs). Also ".. a high payout could show that the company cannot afford to pay the distribution and that the risk of a dividend cut is high." is not always true. Sincerely SDS
Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
Counterpoint, Thank you for theoretical exercise. I not 100% agree with your methodology but importance of taxes is impossible to overestimate. So, I "vote" for low taxes on dividends. Sincerely SDS
Barry32, I'm looking outside US for diversification and I have no clue on exchange ratios because I'm watching ADRs and their prices should be adjusted to "original" stock by arbitragers. I don't worry about currency risk: I expect to hold a stock about 10 years so all currency fluctuations should be zero out in a long run. I have few non-US stocks and got slightly "random" dividends in US$ (e.g. from BMO) because of exchange ratio but I do not care. A company should have a good dividend policy in their domestic currency.
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
Hello,
I compared the performances of David Fish's CCC list with SPY (ETF for S&P500) and found that the following stocks underperformed the S&P 500 by 20% (see details in my Instablog http://seekingalpha.co... for "Will we see dividend cuts (Nov 6, 2011)?") Contenders NWFL AVP HIFS Challengers DV AM ACI ITT STRA BMRC
Will they cut dividends? I don't know - let's see in 1 year.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Jeff Paul wrote "Hmm..check that math. If the current yield is 4% and the firm increases dividends by 5%, the new yield is 4.2%, not 9%. If the stock appreciates by 5%, then your total return is 9% (5%+4% div)."
I guess you replied on my answer (if not, sorry): "I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield" Because I did it just before go to bed after hard week error is possible but I do not see anything wrong. Let me do step by step: 1) I bought 1 share of ABC at 10$ when they paid 0.3$ dividends, so my initial YOC is 3%. 2) Now ABC pays 0.9$ dividends, so my current YOC is 9%, so I have 3X better YOC after N years of holding. 3) Meantime during these N years of lost decade+ ABC stock price went up and down and today it is 20$, so my price appreciation is 2X. 4) Assume I sell today: I get 20$, where 10$ are long-term capital gain, so I have to pay 4$ taxes and put 16$ in my pocket or in another dividend company, let's say XYZ. BTW current yield of ABC is 0.9/20=4.5% 5) If I buy 1 share of XYZ (and my broker do not charge me at all) in order to have 0.9$ income I need to find XYZ with 0.9/16=5.63%.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Jeff Paul wrote: Hi SDS, Can you clarify what you mean when you said "it is difficult to find a good replacement until 2x-3x price appreciation"? I didn't follow that.
I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
David Crosetti Thank you for the article. You're lucky to have your DG in tax-deferred accounts. Unfortunately taxes make such game more difficult. On another hand, I hold stocks for a while and now my average YOC in IRA account is about 7%, so it is difficult to find good replacement until 2X-3X price appreciation. So, I'd rather agree with chowder and Clay King. BTW, you comments indeed clarified your position.
Chowder Thanks for "opening your kimono". I still own HGIC and wait full 60$ reward (but probably replace it sooner with something from Europe - see http://bit.ly/w0UOGf
Dveikus I'd suggest to read David Van Knapp @ SA or Lowell Miller book mentioned early (it opens my eyes in 2006, I wish I was able to find DG idea at your age). BTW do not ignore financial sector in 2011/2 - some US and European gems are at cement price now.
SeattleMike, I'd consider these as first steps in long run and hold these stocks except something terrible happens with companies ( to me annual negative earnings are not terrible enough).
After The Dividend Cut: To Buy Or To Sell [View article]
One example is Cedar Fair, L.P. /FUN/ - company cutted dividends (more accurately distributions) in 2009 and winter 2011 , then announced today 11/3/11: "Finally, we are pleased to announce our Board of Directors has declared a cash distribution of $0.70 per LP unit, payable on December 15, 2011... With this fourth-quarter distribution, we will have satisfied our previously announced intention to pay $1.00 in distributions to unitholders in 2011. We expect to return to a regular quarterly distribution in 2012 with a continued focus on providing a sustainable and growing distribution for our unitholders, while at the same time appropriately managing our debt levels and investing in our business." Regular distributions before 2009 cut were 0.48c/unit. If FUN indeed will pay $1.92 annual distribution in 2012 it means that now we can buy (and I just did it) this former Dividend Contender (according to David Fish list) at yield above 9%.
About company Cedar Fair, L.P. is a limited partnership managed by Cedar Fair Management, Inc. (the General Partner). The Company, along with its affiliated companies (the Partnership), is an amusement park operator, which owns 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Kings Island near Cincinnati, Ohio; Canada's Wonderland near Toronto, Canada; Dorney Park & Wildwater Kingdom (Dorney Park), located near Allentown in South Whitehall Township, Pennsylvania; Valleyfair, located near Minneapolis/St. Paul in Shakopee, Minnesota; Michigan's Adventure located near Muskegon, Michigan; Kings Dominion near Richmond, Virginia; Carowinds in Charlotte, North Carolina; Worlds of Fun located in Kansas City, Missouri; Knott's Berry Farm, located near Los Angeles in Buena Park, California, and California's Great America located in Santa Clara, California.
Personal notes: 1) California's Great America located in Santa Clara, California was quite busy this summer and I expect couple more years for local families who cannot afford expensive vacations (unemployment in CA is high now). 2) Although I just bought FUN, do not blame me in pushing stock up - it is less that 2% of my portfolio.
Thank you for comment and your list. FTE, NGG and STO are in my watch list but not top "buy" priorities now. SDRL: well insurance & ship companies like Bermuda but SDRL dividend history is a bit short for me (2 years) and Bermuda is a bit far from Europe. Are NSRGY and BASF stock still around in US? What is RDS?
NOK is strong historically in equipment behind phones and Nokia Siemens Networks is bond for European communications. Nokia also provides digital map information for many other mobil players and this biz should grow. BTW I own Siemens (SI), they recently adopted good dividend policy.
ESLT makes important component of advanced warware and as many military stocks has top yield in last 10+ years. They froze div in 2009 but I think it is smart now for companies to keep more cash. ESLT had couple big special dividends and I expect they will pay special when economy stabilize.
Well, I have many goodies from Philips Electronics and so I look for PHG. They organically grew for decades and I hope will continue to make nice things.
The Growing Bubble of Health Insurance Premiums [View instapost]
How much "aggregator" charge?
"I can buy an individual plan for around $250 .... Problem is that I haven't been successful in obtaining an individual plan." Is $250 just an advertising number???
The Growing Bubble of Health Insurance Premiums [View instapost]
"Canada, Costa Rica, ...." I used to live in countries there medicine was NOT a business (all hospitals, medical offices did not run for profit) and I did trust doctors there more than doctors in USA. The quality of medicine wasn't so good in terms of equipment. Most doctors there recommended preventive and fix-treatment medicine and did not wait for surgery. I guess /because my health is good and I don't have experience/ that USA doctors prefer Tylenol, more Tylenol and then expensive surgery instead of cheap fixes. In the result cost of insurance is too high in USA. The cost will be even higher (or quality and accessibility drops) with Obamacare if a working person pays for 100% healthy adults who live due to social benefits and whose grandparents and parents had never work, for illegal emigrants who work for cash in black market, for many layers of bureaucrat between me doctor and insurer.
The Growing Bubble of Health Insurance Premiums [View instapost]
Robert Allan Schwartz ""Is the right thing to do separate healthcare from employment?" - Yes."
I kind of agree although I always though that group insurance is cheaper than individual one so "separate healthcare from employment" doesn't sound economically correct but Read Rodger Luebke comment here. I guess I'll ask more $$$ if my employer does not provide insurance to buy one but RL's plumbers probably have different minds.
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
I think your article about DRIPs will be fruitful SA community.
Sincerely
SDS
European stock for sale (Nov. 1, 2011) [View instapost]
5 Stocks Meeting My Entry Criteria for Dividend Investments [View article]
You have good approach useful for beginners in DGI.
They should remember that "removing all stocks whose dividend payout ratio is higher than 60%." screen closes a door to some good DG stocks (MLPs, REITs). Also ".. a high payout could show that the company cannot afford to pay the distribution and that the risk of a dividend cut is high." is not always true.
Sincerely
SDS
Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
Thank you for theoretical exercise. I not 100% agree with your methodology but importance of taxes is impossible to overestimate. So, I "vote" for low taxes on dividends.
Sincerely
SDS
European stock for sale (Nov. 1, 2011) [View instapost]
I'm looking outside US for diversification and I have no clue on exchange ratios because I'm watching ADRs and their prices should be adjusted to "original" stock by arbitragers. I don't worry about currency risk: I expect to hold a stock about 10 years so all currency fluctuations should be zero out in a long run. I have few non-US stocks and got slightly "random" dividends in US$ (e.g. from BMO) because of exchange ratio but I do not care. A company should have a good dividend policy in their domestic currency.
SDS
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
I compared the performances of David Fish's CCC list with SPY (ETF for S&P500) and found that the following stocks underperformed the S&P 500 by 20% (see details in my Instablog http://seekingalpha.co... for "Will we see dividend cuts (Nov 6, 2011)?")
Contenders
NWFL
AVP
HIFS
Challengers
DV
AM
ACI
ITT
STRA
BMRC
Will they cut dividends? I don't know - let's see in 1 year.
Sincerely
SDS
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
wrote
"Hmm..check that math. If the current yield is 4% and the firm increases dividends by 5%, the new yield is 4.2%, not 9%. If the stock appreciates by 5%, then your total return is 9% (5%+4% div)."
I guess you replied on my answer (if not, sorry):
"I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield"
Because I did it just before go to bed after hard week error is possible but I do not see anything wrong. Let me do step by step:
1) I bought 1 share of ABC at 10$ when they paid 0.3$ dividends, so my initial YOC is 3%.
2) Now ABC pays 0.9$ dividends, so my current YOC is 9%, so I have 3X better YOC after N years of holding.
3) Meantime during these N years of lost decade+ ABC stock price went up and down and today it is 20$, so my price appreciation is 2X.
4) Assume I sell today: I get 20$, where 10$ are long-term capital gain, so I have to pay 4$ taxes and put 16$ in my pocket or in another dividend company, let's say XYZ. BTW current yield of ABC is 0.9/20=4.5%
5) If I buy 1 share of XYZ (and my broker do not charge me at all) in order to have 0.9$ income I need to find XYZ with 0.9/16=5.63%.
Sincerely
SDS
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
wrote:
Hi SDS,
Can you clarify what you mean when you said "it is difficult to find a good replacement until 2x-3x price appreciation"? I didn't follow that.
I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Thank you for the article.
You're lucky to have your DG in tax-deferred accounts. Unfortunately taxes make such game more difficult.
On another hand, I hold stocks for a while and now my average YOC in IRA account is about 7%, so it is difficult to find good replacement until 2X-3X price appreciation.
So, I'd rather agree with chowder and Clay King.
BTW, you comments indeed clarified your position.
Chowder
Thanks for "opening your kimono". I still own HGIC and wait full 60$ reward (but probably replace it sooner with something from Europe - see http://bit.ly/w0UOGf
Dveikus
I'd suggest to read David Van Knapp @ SA or Lowell Miller book mentioned early (it opens my eyes in 2006, I wish I was able to find DG idea at your age).
BTW do not ignore financial sector in 2011/2 - some US and European gems are at cement price now.
SeattleMike,
I'd consider these as first steps in long run and hold these stocks except something terrible happens with companies ( to me annual negative earnings are not terrible enough).
After The Dividend Cut: To Buy Or To Sell [View article]
"Finally, we are pleased to announce our Board of Directors has declared a cash distribution of $0.70 per LP unit, payable on December 15, 2011... With this fourth-quarter distribution, we will have satisfied our previously announced intention to pay $1.00 in distributions to unitholders in 2011. We expect to return to a regular quarterly distribution in 2012 with a continued focus on providing a sustainable and growing distribution for our unitholders, while at the same time appropriately managing our debt levels and investing in our business."
Regular distributions before 2009 cut were 0.48c/unit. If FUN indeed will pay $1.92 annual distribution in 2012 it means that now we can buy (and I just did it) this former Dividend Contender (according to David Fish list) at yield above 9%.
About company
Cedar Fair, L.P. is a limited partnership managed by Cedar Fair Management, Inc. (the General Partner). The Company, along with its affiliated companies (the Partnership), is an amusement park operator, which owns 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Kings Island near Cincinnati, Ohio; Canada's Wonderland near Toronto, Canada; Dorney Park & Wildwater Kingdom (Dorney Park), located near Allentown in South Whitehall Township, Pennsylvania; Valleyfair, located near Minneapolis/St. Paul in Shakopee, Minnesota; Michigan's Adventure located near Muskegon, Michigan; Kings Dominion near Richmond, Virginia; Carowinds in Charlotte, North Carolina; Worlds of Fun located in Kansas City, Missouri; Knott's Berry Farm, located near Los Angeles in Buena Park, California, and California's Great America located in Santa Clara, California.
Personal notes:
1) California's Great America located in Santa Clara, California was quite busy this summer and I expect couple more years for local families who cannot afford expensive vacations (unemployment in CA is high now).
2) Although I just bought FUN, do not blame me in pushing stock up - it is less that 2% of my portfolio.
European stock for sale (Nov. 1, 2011) [View instapost]
European stock for sale (Nov. 1, 2011) [View instapost]
Thank you for comment and your list.
FTE, NGG and STO are in my watch list but not top "buy" priorities now.
SDRL: well insurance & ship companies like Bermuda but SDRL dividend history is a bit short for me (2 years) and Bermuda is a bit far from Europe.
Are NSRGY and BASF stock still around in US?
What is RDS?
NOK is strong historically in equipment behind phones and Nokia Siemens Networks is bond for European communications. Nokia also provides digital map information for many other mobil players and this biz should grow. BTW I own Siemens (SI), they recently adopted good dividend policy.
ESLT makes important component of advanced warware and as many military stocks has top yield in last 10+ years. They froze div in 2009 but I think it is smart now for companies to keep more cash. ESLT had couple big special dividends and I expect they will pay special when economy stabilize.
Well, I have many goodies from Philips Electronics and so I look for PHG. They organically grew for decades and I hope will continue to make nice things.
Sincerely
SDS
The Growing Bubble of Health Insurance Premiums [View instapost]
"I can buy an individual plan for around $250 .... Problem is that I haven't been successful in obtaining an individual plan."
Is $250 just an advertising number???
The Growing Bubble of Health Insurance Premiums [View instapost]
I used to live in countries there medicine was NOT a business (all hospitals, medical offices did not run for profit) and I did trust doctors there more than doctors in USA. The quality of medicine wasn't so good in terms of equipment. Most doctors there recommended preventive and fix-treatment medicine and did not wait for surgery. I guess /because my health is good and I don't have experience/ that USA doctors prefer Tylenol, more Tylenol and then expensive surgery instead of cheap fixes. In the result cost of insurance is too high in USA. The cost will be even higher (or quality and accessibility drops) with Obamacare if a working person pays for 100% healthy adults who live due to social benefits and whose grandparents and parents had never work, for illegal emigrants who work for cash in black market, for many layers of bureaucrat between me doctor and insurer.
The Growing Bubble of Health Insurance Premiums [View instapost]
""Is the right thing to do separate healthcare from employment?" - Yes."
I kind of agree although I always though that group insurance is cheaper than individual one so "separate healthcare from employment" doesn't sound economically correct but Read Rodger Luebke comment here. I guess I'll ask more $$$ if my employer does not provide insurance to buy one but RL's plumbers probably have different minds.
Sincerely
SDS