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hjtheuns

hjtheuns
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ABT, AFL, CAG, CAT, CBRL, CL, CNP, COP, CVS, CVX, DE, GE, GILD, GIS, HAS, HDV, IBM, KMB, KO, KRFT, LEG, MCD, MDT, MKC, MRK, NKE, PFE, PG, PM, PSX, ROST, SPY, SYY, T, TEI, TGH, TIP, VFC, WAG, WFC, WMT, XOM
Latest comments  |  Highest rated
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    DD – Agreed, if someone received a large inheritance and wanted to invest it to support their retirement they would be hard-pressed to construct a diversified portfolio of dividend growth stocks selling at reasonable valuations today. Of course, this is not what typically happens. A portfolio of dividend stocks is built over many years. So, purchases are generally made when an investor has money to invest. It would be ill advised to wait for a March 2009 scenario to represent. Having money to invest, I would be comfortable purchasing XOM, CVX, EMR and CINF today.
    Mar 13, 2015. 03:57 PM | 7 Likes Like |Link to Comment
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    Six – Your post contains a lot of wisdom. I’m impressed.

    The primary reason that actively managed mutual funds underperform a benchmark index is turnover. The associated taxes and fees make it very difficult to outperform, even match, a passive index mutual fund. A good dividend growth investor can outperform by minimizing tax consequences and making purchases only when a good opportunity presents itself.

    Perhaps an example will help illuminate my thought process using a hypothetical sell decision. I purchased 100 shares of a Dividend Aristocrat several years ago for $20.00. At that time the stock was paying an annual dividend of $0.60 (3.0%). I’m thinking of selling my shares today at $60.00 when the stock is paying an annual dividend of $1.20. I make a few calculations:

    Current yearly income - $120
    Current yield – 2%
    Yield on cost – 6%
    Gross proceeds from sale - $6,000
    Capital gain from sale - $4,000
    Federal capital gains tax rate – 15%
    State capital gains tax rate – 5.8%
    Capital gains taxes owed - $832
    Net proceeds from sale for reinvestment - $5,168
    Required current yield to replace dividend income – 2.32%
    Total return outperformance required to replace taxes paid – 16.10%

    Selling stock in a sound company for short-term reasons (small or no dividend increase, earnings miss, headwind from a macroeconomic condition…) is frequently a mistake because it is very difficult to find an alternative investment to make up for the tax consequences.
    Mar 13, 2015. 03:04 PM | 25 Likes Like |Link to Comment
  • S&P 500 Telecom Services Sector: AT&T Vs. Verizon - Who Wins The Battle Between Growth, Yield And Value? [View article]
    I own shares of T and VZ but am not interested in adding to my positions when they are trading close to fair value. Current income is not my primary consideration so I would only invest new money when they are trading at a significant discount to fair value. Then you have a reasonable chance of getting a better than market total return.
    Mar 11, 2015. 09:35 AM | 1 Like Like |Link to Comment
  • Why T. Rowe Price Group, Inc. Is At The Top Of My Watch List [View article]
    I also like TROW and added to my position Tuesday. Morining Star has a fair value of $89.00 and S&P Capital IQ has a fair value of $100.20. I personally, value TROW close to $115. Regardless, in the current market environment there are few opportunities as good as TROW is presently. What other company has zero debt, a 5% dividend yield for the coming year and is trading significantly below fair value?
    Mar 5, 2015. 08:53 PM | 1 Like Like |Link to Comment
  • Dividend Champions: 15 Increases Expected In The Next 11 Weeks [View article]
    KMB stated on Jan 23: "Dividend expected to increase mid-single digits, subject to approval by the Board of Directors. The anticipated increase is generally consistent with 2014 growth in adjusted earnings per share from continuing operations of 5 percent."

    I wanted to point out that KMB had been omitted from David's list. I am a long-term holder of KMB and will be satisfied with a 5% increase in the dividend.
    Feb 15, 2015. 08:17 PM | 1 Like Like |Link to Comment
  • Dividend Champions: 15 Increases Expected In The Next 11 Weeks [View article]
    Dividend Champion KMB should also declare a dividend increase during the next two weeks, their 44th consecutive year.
    Feb 15, 2015. 06:49 PM | 1 Like Like |Link to Comment
  • Courier Corporation Will Be Acquired By Quad/Graphics - Should I Sell Now Or Wait? [View article]
    RAS - I don't follow CRRC or QUAD but would say that the merger will likely give QUAD a stronger position in the printing industry. If you were comfortable holding CRRC it would seem reasonable to me to continue to hold QUAD after the merger. I would also say that Kelly Vanderboom's response is about as close to saying the dividend will be maintained as he can legally say. Best of luck with your decision.
    Jan 22, 2015. 09:11 AM | 1 Like Like |Link to Comment
  • The Continuing Search For Quality [View article]
    Eddie - I was charged a reorganization fee to go from WAG to WBA, were you?
    Jan 2, 2015. 07:14 AM | Likes Like |Link to Comment
  • The Continuing Search For Quality [View article]
    Eddie - Another interesting article. As of today, Walgreen Co (WAG) is now Walgreen Boots Alliance Inc (WBA). Happy New Year.
    Dec 31, 2014. 12:02 PM | 2 Likes Like |Link to Comment
  • CenterPoint Energy: The Sweet Spot For Dividend Growth Investors [View article]
    Electricity demand growth will slow and possibly even turn negative as the economy declines in CNP's customer area which is highly correlated to oil.
    Dec 24, 2014. 09:42 PM | Likes Like |Link to Comment
  • CenterPoint Energy: The Sweet Spot For Dividend Growth Investors [View article]
    CNP is an interesting stock at the moment. If management is correct, and they raise the dividend at an 8-10% CAGR for the next three years, the YOC would be around 5% in 2017. The first of these dividend increases will be made by the end of January. There are some risks though. If the fall in oil price continues and low prices persist for longer than some anticipate, CNP's earnings would be disproportionately  impacted for geographical and structural reasons. I believe that the dividend is safe and some growth is likely making CNP suitable for income investors.
    Dec 24, 2014. 01:50 PM | 1 Like Like |Link to Comment
  • Retired Investors Must Be The Smart 'Little Pig' [View article]
    Buffett talks about raising taxes on earned income which he has almost none of. Buffett is a master at protecting and enhancing his position.
    Nov 15, 2014. 06:49 AM | Likes Like |Link to Comment
  • Retired Investors Must Be The Smart 'Little Pig' [View article]
    If you care about other people and America you should do all that you can to legally minimize taxes paid. Buffett has made more money through investing than anyone and he does all that he can to minimize taxes. He knows that taxes are the least efficient use of capital.
    Nov 14, 2014. 07:11 AM | 1 Like Like |Link to Comment
  • Gilead Sciences Gets Ambushed By The Patent Troll, AbbVie [View article]
    Here is a link to a WSJ article from July of this year when this issue had heightened media attention:

    http://on.wsj.com/1u6e7CG

    Note that there is nothing illegal about method of use patents and that it is a normal business practice in many industries, including the pharmaceutical industry.
    Nov 13, 2014. 12:13 PM | Likes Like |Link to Comment
  • Gilead Sciences Gets Ambushed By The Patent Troll, AbbVie [View article]
    This article is highly distorted. ABBV is a fine pharmaceutical company and their patent process is typical.
    Nov 12, 2014. 07:15 PM | 8 Likes Like |Link to Comment
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