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Dividends4Life (38.26)

August 2010

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9

When To Sell A Dividend Stock

August 31, 2010 – Comments (0) | RELATED TICKERS: BP , EMR , MMM

As a long-term buy-and-hold investor, most of my evaluation efforts are aimed at determining when to buy a stock. Sometimes it is necessary to sell a stock and we need to be equally adept at identifying those times. I have stated on numerous occasions that I have one hard and fast sell rule for my individual dividend stocks: When an individual stock held as a dividend investment lowers its dividend, immediately sell it. However, there are other times it makes sense to sell. Consider these: Significant Price Run-up Distorting Dividend Fundamentals

When you buy a dividend stock at a depressed level it will eventually return to its norm. However, at its normal level the dividend fundamentals could be so bad that you would be better off putting the money to work somewhere else. For this evaluation, my primary indicator is the NPV MMA Differential. When this metric goes negative, it in effect is saying you are better off putting the into a money market account for the next 20 years. When this occurs I look for a way to exit the position and retrieve my original investment, leaving the portion attributable to capital appreciation. Examples of stocks that I hold with these characteristics (or close to it) are:  [more]

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3

Nine Stocks Raising The Dividend Growth Bar

August 30, 2010 – Comments (0) | RELATED TICKERS: KO

Have you ever noticed those that most vehemently attack a buy-and-hold strategy really don’t understand how the strategy works? They confuse a buy-and-hold strategy with day-trading with a longer duration. A true implementation of buy-and-hold includes a focus on blue-chip stocks with a sustainable advantage, along with a reasonable asset allocation framework. One sign of a blue-chip stock is a long string of dividend increases.

Below are several companies that have recently raised the bar by increasing their cash dividends:  [more]

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3

UGI Corporation (UGI) Dividend Stock Analysis

August 27, 2010 – Comments (0) | RELATED TICKERS: UGI

Linked here is a detailed quantitative analysis of UGI Corporation (UGI). Below are some highlights from the above linked analysis:

Company Description: UGI Corp. operates propane distribution, gas and electric utility, energy marketing and related businesses through subsidiaries.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:  [more]

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16

My Top 6 Performing Dividend Stocks Just Might Surprise You

August 24, 2010 – Comments (4) | RELATED TICKERS: CL , JNJ , MMM

As I have stated many times, my goal is to create an ever growing income stream from dividend stocks. Secondarily, it is my desire to beat the S&P 500 over time. With that said, I rarely look at the capital performance of individual stocks. However, I recently sorted my portfolio by Total Gain % (total gain/basis) and was mildly surprised at the top performers.

It is important to note that dividends paid are not factored in the Total Gain % calculation. Therefore, the total return is actually higher than the numbers reported. The holding periods differ for each, so I have noted the purchase dates.  [more]

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6

8 Dividend Stock Delivering Good News

August 23, 2010 – Comments (0) | RELATED TICKERS: AFG , ALV , CINF

If you closely follow the daily financial news as presented by the mainstream media, it is easy become jaded and start believing that there isn’t any good news out there. Don’t be confused by the noise. There are still many great companies committed to generating superior returns and rewarding their shareholder by increasing cash dividends.

Below are several companies that have recently raised their cash dividends:  [more]

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7

Automatic Data Processing Inc. (ADP) Dividend Stock Analysis

August 19, 2010 – Comments (0) | RELATED TICKERS: ADP

Linked here is a detailed quantitative analysis of Automatic Data Processing Inc. (ADP). Below are some highlights from the above linked analysis:

Company Description: Automatic Data Processing Inc. is one of the world’s largest independent computing services companies, provides a broad range of data processing services.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:  [more]

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5

10 Stocks With Sustainable Dividend Growth

August 17, 2010 – Comments (0) | RELATED TICKERS: CL , PG , WMT

In the past we have looked at the importance of a company’s ability to sustain its dividend. However, as an investor in dividend growth stocks, it is not enough to simply sustain the dividend – I want to own companies that are capable of sustained dividend growth. Needless to say, this is a little more difficult to evaluate, but here are few important things to consider…   [more]

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6

16 Confident and Secure Companies Boosting Dividends

August 16, 2010 – Comments (0) | RELATED TICKERS: ADP

Are you confident and secure in your investing process? It appears many people are not, including the famed Canadian dividend investor Derek Foster who sold all his investments and friends/family who jump in and out of the market. I believe that most investors will lose money in the stock market over their lifetime. It is not that the market is a bad place to invest your money, but left unchecked the psychology of the market will lead you to do just the opposite of what you should to be doing. We must follow a process we are 100% confident in. Doubt is the gateway to destructive behavior. For me, dividend growth investing is what I am confident and secure in.

Below are several companies confident and secure enough in their business to increase their cash dividends:  [more]

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7

Sysco Corporation (SYY) Dividend Stock Analysis

August 12, 2010 – Comments (0) | RELATED TICKERS: SYY

Linked here is a detailed quantitative analysis of Sysco Corporation (SYY). Below are some highlights from the above linked analysis:

Company Description: Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of a range of food and related products primarily for foodservice industry in the United States and Canada.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:  [more]

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5

Dividend Stocks vs. Income Annuities

August 10, 2010 – Comments (0) | RELATED TICKERS: INTC , KO , PG

I was born in 1962 which puts me on the tail-end of the Baby Boomers (those born between 1946 and 1964). We have been described by some as “the pig in the python.” Over the decades, the sheer size of our group has redefined many aspects of society. As we approach the tail of the python and look toward retirement, once again we have the government and others scrambling to figure out how to handle this aging and albeit disruptive force.

One concern is how will Social Security, pensions and other retirement vehicles withstand the strain. The 2008 market crash has added concern to the viability of these plans. In a New York Times article, “The Unloved Annuity Gets a Hug From Obama“, income annuities are what the administration is promoting to alleviate the pending problem, but is this really a workable solution?  [more]

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10

3 Signs of an Impending Dividend Cut

August 09, 2010 – Comments (1) | RELATED TICKERS: DOV , LEG , MON

Most investors are not surprised when a company cuts its dividend. They saw the early warning signs well in advance of the actual cut. Here are three signs that a company is heading toward a dividend cut:

1.) An abrupt or permanent shift in a company’s business model as a result of business conditions.
2.) A dividend yield that is higher than average and/or higher than others in the industry.
3.) Diminishing cash available to pay dividends.  [more]

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7

General Dynamics (GD) Dividend Stock Analysis

August 05, 2010 – Comments (0) | RELATED TICKERS: GD

Linked here is a detailed quantitative analysis of General Dynamics (GD). Below are some highlights from the above linked analysis:

Company Description: General Dynamics is the world’s sixth largest military contractor and also one of the world’s biggest makers of corporate jets.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:  [more]

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12

10 Dividend Stocks Delivering A Quick Payback

August 03, 2010 – Comments (0) | RELATED TICKERS: IBM , KMB , MCD

Payback is the amount of time needed for an investment to earn its cost, undiscounted. For example, if you buy a dividend stock for $100 that pays a $5 annual dividend, the payback is 20 years (100/5). Though not very sophisticated, payback can still help you screen for good, solid dividend growth stocks. I learned this lesson the hard way…

Years ago as a young analyst, I was assigned the project of streamlining my employers’ acquisition model. As part of this project, I removed the payback calculation. The company’s focus was on discounted cash flow and internal rate of return, so I didn’t see the need for a payback metric. No one noticed the missing payback calculation, that is, no one except the CEO. Needless to say, I was a little nervous making the long walk to the corner office to explain why I had removed a metric that he considered both beneficial and important.  [more]

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7

19 Stocks Using Real Cash To Pay Higher Dividends

August 02, 2010 – Comments (0) | RELATED TICKERS: AOS , CR , GE

Are you looking for companies that can sustain and grow their dividend? In making that determination, a company’s Statement of Earnings is one of the last places you should look. Cash is king for the dividend investor and the Statement of Cash Flows is where astute investors begin when they want to understand the viability of a company. To succeed as a dividend investor, you must find companies that can sustain and grow dividends by focusing on their ability to generate cash. You can fake earnings, but you can’t fake cash.

Below are several stocks using real cash to raise their dividends:  [more]

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