Proxy advisory service ISS recommends Transocean (RIG +1.3%) shareholders vote for two of three board candidates proposed by Carl Icahn, and vote against RIG Chairman J. Michael Talbert. RIG strongly disagrees with the ISS position, saying Icahn and his nominees haven't offered a plan "other than the extraction of an unsustainable dividend." [View news story]
And I won't vote with ISS and Icahn. I think his proposed $4 dividend is completely irresponsible. RIG needs to concentrate on strengthening its balance sheet, and once that is done, start repurchasing shares. Hold the dividend.
Philip Morris Was Aided By Its Large Share Buybacks During Q1 2013 [View article]
PM seems like a house of cards to me, or maybe a house of empty cigarette boxes. Each year, they pay out about $10b in dividends and buy-backs, but they keep on increasing their debt by $3b+. I know, at this point they can still afford it, but at some point more debt will become prohibitive. Does not seem like a solid foundation to me upon which to build a dividend growth company.
I also have been following Argentina closely. I don't think any rise in peso denominated securities (if they rise at all) will be able to keep up with the fall in the peso to at least stay stable in USD terms. Also, having just returned from a visit to BA, I noticed that large denomination USD bills attract better rates than small denomination ($20 or less) bills.
Agree, but on the other hand, as our friend Buffett says, the only price that is important is the one you buy at and the one you sell at. Everything in between doesn't matter. Applying this to the Yen bond portfolio and the Yen/USD FX rate, it has gone from 120 (yen low), to 80 (yen's recent high) to 90 now. Not as if the Yen has recently dropped through the bottom. I'd say it's "off its high", at worst. And when one Yen bond matures, they will probably buy another Yen bond in its stead - so what is all the Yen/USD noise about anyways?
More importantly, I assume they need to convert some Yen to USD to pay the dividend, not only paying a higher FX rate as it goes back toward 120, but also having to pay US tax on foreign earnings. That is the punitive tax that other US companies try to avoid by keeping foreign earnings off-shore until the US government gets to its senses and abolishes this stupid tax that puts US companies at a disadvantage to firms domiciled elsewhere. Can someone please devise a strategy to pay dividends directly out of the Japanese subsidiary, rather than having to flow it through the US parent? Now that would be helpful.
Carl Icahn Demands That Transocean Start To Pay An 8% Dividend [View article]
Devon Shire: your bottom line states: "Perhaps a dividend of half the size that Icahn suggests would be more appropriate with the other half of free cash flow going to debt reduction". Well, isn't that just about what RIG mgmt proposes; a $2.25 dividend (vs Icahn's $4) and some debt repayments. Not sure what is wrong with this mgmt proposal.
A Time Bomb In The Canadian Financials [View article]
God help the Canadian economy if what you say is true (that Canadians purchase homes with HELOC's to make the monthly payments more affordable). Such a situation is truly and accident waiting to happen, and yes, not just the banks, but the entire economy, lead by the homebuilding industry, would crater. Such folly should be forbidden.
Why would you be sympathetic to this country`s position? The governments of Argentina, since the 1940's, have been squandering Argentina's wealth through populistic measures that haven't done one iota to advance this nation. On the contrary, the measures each of these subsequent governments have taken, have reduced the standing of Argentina from one of the five wealthiest in the world in the early part of the 20th century to an also-ran developing nation, at best. It is time for the Argentine people to wake up and elect a government that gets them out of this quackmire. This country has the resources, both natural and thru the wealth of knowledge and education of its people, to shine once again. Only its government stands in the way of returning Argentina to its rightful status as one of the leading economies of this world.
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
Good analysis. But I think you may have missed one point. Correct me if I am wrong. I thought that dividends of RDS.B, being shares in a UK constituted company, would in Canada and the US be subject to 10% UK withholding tax outside of tax deferred accounts, as both countries have a tax agreement with the UK to exempt tax deferred accounts from the withholding tax. Can someone confirm whether the UK 10% withholding tax applies in non-tax deferred accounts
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
Good analysis, but I think you missed something. Please correct me if I am wrong. I was under the impression that dividends from RDS.B, being constituted as a UK share, were subject to 10% UK withholding tax, outside of tax deferred accounts of course, if you are in the US or Canada, as both countries I think have a tax treaty with the UK that eliminates the withholding tax in case of tax deferred accounts. Any one knows for sure whether 10% UK withholding tax applies to RDS.B in non-tax deferred accounts?
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
Good analysis, but I thought that dividends from RDS.B, being British rather than Dutch, are subject to UK withholding tax of 10%, outside of a tax-deferred (IRA style) account. Can anyone clarify?
How To Approach The Beginning Days Of A Long-Term Dividend Strategy [View article]
Wow Wiley Coyote! You describe my strategy to a "T". I am now retired, but I also hold about 50% of my portfolio in DG stocks. I have owned DG stocks for a few decades now, but my records are not that great going back more than say 15 years, however, in those last 15 years my dividends have increased 5 fold, mostly from re-investing dividends before I needed them to live on. The other half of my portfolio is mostly in value type stocks. They provide the fuel to grow my portfolio and once in a while also add to the DG side of my portfolio. I'd love to compare further notes with you Wiley C. Any way we can make direct contact?
Is Wells Fargo's New Preferred Stock The Beginning Of The End? [View article]
I think issuing these prefs is a very smart move by WFC. At a relatively modest margin over the cost of equity (divd yield in this case) they issue what in essence is a debt instrument which they can buy back on 50 cents on the dollar once rates start to go up. When rates go up, they will also be generating a lot of excess cash, meaning they will no longer need the prefs while they will also have the cash to buy them. Smart move for the company.... not so smart move for investors to buy them. Why not buy the common and hold them for dividend growth which will soon exceed the divd on the pref.
Boeing: The Sky Is Full Of Money Trees [View article]
Alex: Your inventory analysis is way off. If you had just bothered to read the Notes to the Financial Statements you would have noticed that Inventory includes "Deferred Production Costs", an item very common in companies that use Program Accounting, where the cost of development of a product and the early "excess" production cost is deferred over the life of the program. For many years Boeing did not have a new product, but with the introduction of the 787 the company incurred a lot of development cost that has been capitalized to Inventory. (These are not parts sitting in a warehouse; they are pre- and early- production costs). They will be amortized to cost-of-sales over the life cycle of the 787. The good news here is in the Cash Flow. These are costs that HAVE BEEN incurred, and each delivered 787 will be tagged with some of these development costs, a non-cash item that will keep Net Income relatively low (and cause the first 800 or so 787's to be sold at a loss) but will give a huge boost to Cash Flow. Alex: you should not be publishing if you don't do your homework or do not know what you are talking about.
Proxy advisory service ISS recommends Transocean (RIG +1.3%) shareholders vote for two of three board candidates proposed by Carl Icahn, and vote against RIG Chairman J. Michael Talbert. RIG strongly disagrees with the ISS position, saying Icahn and his nominees haven't offered a plan "other than the extraction of an unsustainable dividend." [View news story]
Philip Morris Was Aided By Its Large Share Buybacks During Q1 2013 [View article]
Philip Morris Was Aided By Its Large Share Buybacks During Q1 2013 [View article]
Argentine Peso Blues Update [View article]
Aflac And Japan [View article]
More importantly, I assume they need to convert some Yen to USD to pay the dividend, not only paying a higher FX rate as it goes back toward 120, but also having to pay US tax on foreign earnings. That is the punitive tax that other US companies try to avoid by keeping foreign earnings off-shore until the US government gets to its senses and abolishes this stupid tax that puts US companies at a disadvantage to firms domiciled elsewhere. Can someone please devise a strategy to pay dividends directly out of the Japanese subsidiary, rather than having to flow it through the US parent? Now that would be helpful.
Carl Icahn Demands That Transocean Start To Pay An 8% Dividend [View article]
A Time Bomb In The Canadian Financials [View article]
Argentina's Desperate Exchange Proposal [View article]
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
How To Approach The Beginning Days Of A Long-Term Dividend Strategy [View article]
Is Wells Fargo's New Preferred Stock The Beginning Of The End? [View article]
Warren Buffett Is Right About Wells Fargo's Dividend [View article]
Price: Mar 31/2003 Today
TD $22.16 $83.00
WFC $22.60 $35.08
Dividend: 2003 2013
TD 1.16 3.00
WFC 0.75 1.00 (based on Q1 of $0.25)
EPS:
TD 1.51 6.99 (fcst from $6.81 in 2012)
WFC 3.69 2.40
Boeing: The Sky Is Full Of Money Trees [View article]