I am well aware that FAST Graphs and Morningstar have conflicting numbers on free cash flow. It is not I who have the conflict, it is they, I merely repeated what they report. This simply points out that due diligence must include multiple sources of information, and when those sources do not agree, then even more digging is required.
Interesting discussion based on Morningstar. Looking at MCY through the lens of FAST Graphs shows the following 10 year numbers:
Operating earnings growth rate is negative. Free cash flow has not covered the dividend since 2006. Total annualized rate of return with dividends reinvested: 4.3%. Current P/E: 19.7 Normal P/E: 12.8. Based on this alone, MCY is 54% over valued. 5 year future annualized estimated total return: 7%.
Some not so happy numbers reported by M*:
No free cash flow for 10 years. Payout ratio > 100% the last two years. ROE numbers poor.
What To Do When Your Stock Cuts Its Dividend [View article]
"... I don't want to outsource my personal judgment to an automatic sell rule."
Wonderful quote. However, don't let today's version of your personal judgment derail your plan. I say this in reference to RAS' recent article on his decision to sell KMB and buy IBM, and the extensive discussion it generated.
Running The Kinder Morgan Tax Obstacle Course [View article]
Thank you for your informative series of articles on Kinder Morgan. At last we have a CPA giving a professional opinion on what happens when you sell an MLP in an IRA. This has been a hotly debated issue on SA for some time, with Reel Ken taking a lot of heat for saying essentially the same thing that you say. Your professional opinion confirms my decision to never own an MLP in an IRA.
Along with your previous article, this is bookmarked for future reference.
Another significant way that KMI is different from KMR/KMP is that KMI owns the general partner interest and Incentive Distribution Rights of El Paso Pipeline Partners LP (EPB).
Twenty Dividend Stocks I Recently Purchased For My IRA Rollover [View article]
I ask because there has been extensive commentary on SA about the advisability, or lack thereof, of owning an MLP in an IRA, as related to taxation. The issue is UBTI - Unrelated Business Taxable Income - which can cause an IRA to owe income tax.
How Can One Trade Be Both Good For Me And Bad For Me? [View article]
Robert,
I also was an investor in OHI, and really enjoyed the high dividend and the terrific capital growth. But like you, when I read Brad Thomas' latest article on the over priced REITs, it re-focused my attention on the quality of the OHI tenants or lack thereof, and the less than stellar occupancy rate, which for me is why OHI is over priced (and the market agrees because of the current yield), so I decided like you to sell. Not all of it, but enough to recoup my initial investment. Doing so reduced my dividend income because I did not have an immediate re-investment candidate (everything else I want to buy is also over-priced), but I felt that for simple comfort that I needed to reduce that particular risk.
OHI however is not in the same class as KMB. KMB is a core investment for a dividend growth investor, and OHI is not. I think of KMB as being like GIS, which is also as over-priced as KMB and is also a core dividend growth stock. I own GIS (not KMB), and I had a similar discussion with myself about GIS as you had about KMB. I decided that I would hold GIS and let the dividend growth take care of itself, and I have confidence that this will happen over time, whereas I do not have the same confidence with OHI.
However, my situation is not like yours - I am retired and you are not - so I don't think one can compare my decision to yours and reach a valid conclusion.
Martin Midstream Partners: A 9% Yielder I Plan To Add To My Income Portfolio On Next Sell-Off [View article]
papaone,
Concur with sportscliche. You will find this information in the 10-K filed with the SEC, on page 86. I suggest you familiarize yourself with the EDGAR site and with 10-K and 10-Q reports. They are the authoritative source for much company information.
Running The Kinder Morgan Tax Obstacle Course [View article]
Running The Kinder Morgan Tax Obstacle Course [View article]
My Q2 Dividend Growth Watch List [View article]
FAST Graphs shows massive positive FCF per share, much more than the dividend.
Morningstar shows consistent large negative FCF per share, caused by massive capex, much greater than operating cash flow.
I'll stay away for now.
Running The Kinder Morgan Tax Obstacle Course [View article]
"So why does one yield more than the other?"
That is a good question. There have been many conjectures on SA, but nobody really knows.
In the several years that I have owned KMR, its discount to KMP has all but completely disappeared. And nobody knows why. I am not complaining.
"And does that mean that KMR is not only more tax efficient, but a better value at the current market price?"
It is more tax efficient for me, and while it still sells at a discount to KMP, it is a better value for me. Others may differ.
My Q2 Dividend Growth Watch List [View article]
I am well aware that FAST Graphs and Morningstar have conflicting numbers on free cash flow. It is not I who have the conflict, it is they, I merely repeated what they report. This simply points out that due diligence must include multiple sources of information, and when those sources do not agree, then even more digging is required.
My Q2 Dividend Growth Watch List [View article]
Operating earnings growth rate is negative.
Free cash flow has not covered the dividend since 2006.
Total annualized rate of return with dividends reinvested: 4.3%.
Current P/E: 19.7 Normal P/E: 12.8. Based on this alone, MCY is 54% over valued.
5 year future annualized estimated total return: 7%.
Some not so happy numbers reported by M*:
No free cash flow for 10 years.
Payout ratio > 100% the last two years.
ROE numbers poor.
This company does not look strong to me.
What To Do When Your Stock Cuts Its Dividend [View article]
Wonderful quote. However, don't let today's version of your personal judgment derail your plan. I say this in reference to RAS' recent article on his decision to sell KMB and buy IBM, and the extensive discussion it generated.
What Happens When You Sell An MLP? [View article]
Finger check, you meant KMR.
Running The Kinder Morgan Tax Obstacle Course [View article]
Along with your previous article, this is bookmarked for future reference.
What Happens When You Sell An MLP? [View article]
Here is Kinder Morgan's fact sheet: http://bit.ly/109f1lt
Twenty Dividend Stocks I Recently Purchased For My IRA Rollover [View article]
Twenty Dividend Stocks I Recently Purchased For My IRA Rollover [View article]
How Can One Trade Be Both Good For Me And Bad For Me? [View article]
I also was an investor in OHI, and really enjoyed the high dividend and the terrific capital growth. But like you, when I read Brad Thomas' latest article on the over priced REITs, it re-focused my attention on the quality of the OHI tenants or lack thereof, and the less than stellar occupancy rate, which for me is why OHI is over priced (and the market agrees because of the current yield), so I decided like you to sell. Not all of it, but enough to recoup my initial investment. Doing so reduced my dividend income because I did not have an immediate re-investment candidate (everything else I want to buy is also over-priced), but I felt that for simple comfort that I needed to reduce that particular risk.
OHI however is not in the same class as KMB. KMB is a core investment for a dividend growth investor, and OHI is not. I think of KMB as being like GIS, which is also as over-priced as KMB and is also a core dividend growth stock. I own GIS (not KMB), and I had a similar discussion with myself about GIS as you had about KMB. I decided that I would hold GIS and let the dividend growth take care of itself, and I have confidence that this will happen over time, whereas I do not have the same confidence with OHI.
However, my situation is not like yours - I am retired and you are not - so I don't think one can compare my decision to yours and reach a valid conclusion.
Martin Midstream Partners: A 9% Yielder I Plan To Add To My Income Portfolio On Next Sell-Off [View article]
Concur with sportscliche. You will find this information in the 10-K filed with the SEC, on page 86. I suggest you familiarize yourself with the EDGAR site and with 10-K and 10-Q reports. They are the authoritative source for much company information.
The EDGAR site URL is (http://1.usa.gov/WiR8CG)
Twenty Dividend Stocks I Recently Purchased For My IRA Rollover [View article]