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Dividends4Life (38.66)

November 2013

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Pepsico, Inc. (PEP) Dividend Stock Analysis

November 28, 2013 – Comments (0) | RELATED TICKERS: PEP , KO , DPS

Linked here is a detailed quantitative analysis of Pepsico, Inc. (PEP). Below are some highlights from the above linked analysis:

Company Description: PepsiCo, Inc. is a major international producer of branded beverage and snack food products.  [more]

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12 Higher Yielding Stocks With A Low Dividend Payout Ratio

November 27, 2013 – Comments (0) | RELATED TICKERS: IBM , AFL , HRS

The main focus of dividend investing is finding and buying dividend stocks that will likely continue to raise their dividends in the future. In making this determination there are many factors to consider. One of the more important metrics to consider is the Dividend Payout Ratio.  [more]

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Automatic Data Processing Inc. (ADP) Dividend Stock Analysis

November 22, 2013 – Comments (0) | RELATED TICKERS: ADP , PAYX , NSP

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., one of the world's largest independent computing services companies, provides a broad range of data processing services.  [more]

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Johnson & Johnson (JNJ) Dividend Stock Analysis

November 21, 2013 – Comments (0) | RELATED TICKERS: JNJ , ABT , LLY

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

Company Description: Johnson & Johnson is a leader in the pharmaceutical, medical device and consumer products industries.  [more]

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Early Warning Signs of a Dividend Cut

November 20, 2013 – Comments (0) | RELATED TICKERS: PFE , BAC , NUE

Investors Dividend Growth Stocks look for stocks that will provide a predictable, sustainable and growing income from dividends. It is bad when a company fails to raise its dividend at its appointed time; However, it is much worse when a company cuts its dividend. In most cases the companies' investors should not have been surprised because there are usually early warning signs that foretold a dividend cut was imminent.  [more]

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6 Dividend Stocks Giving Shareholders A Raise

November 18, 2013 – Comments (0) | RELATED TICKERS: ADP , MDU , PKY

You expect your employer to give you a salary increase periodically. Why wouldn’t you expect the same from your investments? One of the most important aspects of a dividend stock is its ability to consistency raise dividends over time.  [more]

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October 2013 Pocket Change Portfolio Performance

November 16, 2013 – Comments (0) | RELATED TICKERS: KMB , KO , RTN

The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "pocket change" earned from my various online endeavors. Each month I report on the portfolio's progress and dividends earned. Total dividends received during the month were $901.87, consisting of...  [more]

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Raytheon Company (RTN) Dividend Stock Analysis

November 15, 2013 – Comments (0) | RELATED TICKERS: RTN , BA , LMT

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

Company Description: Raytheon Company, the world's sixth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics, and missile-defense systems.  [more]

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Occidental Petroleum Corporation (OXY) Dividend Stock Analysis

November 14, 2013 – Comments (0) | RELATED TICKERS: OXY , DD , XOM

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

Company Description: Occidental Petroleum Corporation is obe of the largest oil and gas companies in the U.S., OXY has global exploration and production operations. Its subsidiary, OxyChem, is one of the largest U.S. merchant marketers of chlorine and caustic soda.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

OXY is trading at a premium to all four valuations above. The stock is trading at a slight discount to its calculated fair value of $99.36. OXY earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

OXY earned two Stars in this section for 2.) and 3.) above. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. OXY earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1975 and has increased its dividend payments for 11 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

OXY earned a Star in this section for its NPV MMA Diff. of the $11,930. This amount is in excess of the $2,400 target I look for in a stock that has increased dividends as long as OXY has. If OXY grows its dividend at 17.5% per year, it will take 2 years to equal a MMA yielding an estimated 20-year average rate of 3.41%. OXY earned a check for the Key Metric 'Years to >MMA' since its 2 years is less than the 5 year target.

Memberships and Peers: OXY is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index. The company's peer group includes: E. I. du Pont de Nemours and Company (DD) with a 3.0% yield, Exxon Mobil Corporation (XOM) with a 2.9% yield and Royal Dutch Shell plc (RDS.A) with a 4.7% yield.

Conclusion: OXY earned one Star in the Fair Value section, earned two Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of four Stars. This quantitatively ranks OXY as a 4-Star Strong stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $175.47 before OXY's NPV MMA Differential decreased to the $2,400 minimum that I look for in a stock with 11 years of consecutive dividend increases. At that price the stock would yield 1.5%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $2,400 NPV MMA Differential, the calculated rate is 12.2%. This dividend growth rate is significantly lower than the 17.5% used in this analysis, thus providing a margin of safety. OXY has a risk rating of 1.75 which classifies it as a Medium risk stock.

OXY possesses a large and geographically diverse reserve base. The company built its business around finding and acquiring proven properties to drive its future production growth. It should benefit from higher production and oil prices, with domestic growth being driven by reserve prospects in California and the Permian Basin. International growth could come from Bahrain, Oman, Libya and Iraq.

The company is enjoying cost savings from drilling efficiencies. Its debt to total capital is at an enviable 15% and the stock is trading at a slight discount to its $99.36 calculated fair value. However, OXY's cash flow payout of 94% (down from 190% in the May 2013 review) prevents me from seriously considering the stock at this time.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I held no position in OXY (0.0% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here.

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Income Annuities vs. Dividend Stocks

November 13, 2013 – Comments (0) | RELATED TICKERS: KMB , KO , MCD

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.  [more]

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17 Companies Compounding Shareholder's Wealth With Higher Dividends

November 11, 2013 – Comments (0) | RELATED TICKERS: EMR , SBSI , NVDA

Compound interest is what occurs when interest previously earned is added to the principle and is considered when calculating future interest – i.e. earning interest on interest. So, what’s more powerful than compound interest? Compound dividends! Compound dividends are like compound interest on steroids – you are not only earning on reinvested dividends, but the dividend rate is increasing.  [more]

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Dividend Income Progress Update - October 2013

November 09, 2013 – Comments (0) | RELATED TICKERS: CTBI , ITW , CINF

Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income increased in October, extending the streak to 40 consecutive months of increases after June 2010's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 69 of the last 71 months...  [more]

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T. Rowe Price Group Inc. (TROW) Dividend Stock Analysis

November 08, 2013 – Comments (0) | RELATED TICKERS: TROW , FII , EV

Linked here is a detailed quantitative analysis of T. Rowe Price Group Inc. (TROW). Below are some highlights from the above linked analysis:

Company Description: T. Rowe Price Group Inc. (formerly T. Rowe Price Associates) operates one of the largest no-load mutual fund complexes in the United States.  [more]

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Wal-Mart Stores, Inc. (WMT) Dividend Stock Analysis

November 07, 2013 – Comments (0) | RELATED TICKERS: WMT , COST , TGT

Linked here is a detailed quantitative analysis of Wal-Mart Stores, Inc. (WMT). Below are some highlights from the above linked analysis:

Company Description: Wal-Mart Stores, Inc. is the largest retailer in the world, Wal-Mart operates a chain of over 10,000 discount department stores, wholesale clubs, supermarkets and supercenters.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

WMT is trading at a premium to all four valuations above. The stock is trading at a slight discount to its calculated fair value of $77.57. WMT earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

WMT earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. WMT earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 39 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

WMT earned a Star in this section for its NPV MMA Diff. of the $2,943. This amount is in excess of the $500 target I look for in a stock that has increased dividends as long as WMT has. If WMT grows its dividend at 13.5% per year, it will take 3 years to equal a MMA yielding an estimated 20-year average rate of 3.41%. WMT earned a check for the Key Metric 'Years to >MMA' since its 3 years is less than the 5 year target.

Memberships and Peers: WMT is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company's peer group includes: Costco Wholesale Corporation (COST) with a 1.1% yield, Target Corp. (TGT) with a 2.7% yield and PriceSmart Inc. (PSMT) with a 0.6% yield.

Conclusion: WMT earned one Star in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of five Stars. This quantitatively ranks WMT as a 5-Star Very Strong stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $143.64 before WMT's NPV MMA Differential decreased to the $500 minimum that I look for in a stock with 39 years of consecutive dividend increases. At that price the stock would yield 1.3%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $500 NPV MMA Differential, the calculated rate is 7.5%. This dividend growth rate is significantly lower than the 13.5% used in this analysis, thus providing a significant margin of safety. WMT has a risk rating of 1.00 which classifies it as a Low risk stock.

After wandering through the wilderness, WMT has returned to its everyday-low-price strategy roots. In addition to major price cuts, the company is focusing new capital on higher-return domestic small stores with less expansion at lower-return international stores.

WMT enjoys dominant positions in most markets where it competes. The weak economic environment favors the company with price-conscience consumers looking for bargains when shopping for staples and basic discretionary items. The company's unmatched scale leads to favorable terms on everything from the products it sells to store leases and distribution agreements.

Going forward, WMT will face fierce competition from Costco, Amazon, dollar stores and other such retailers. These competitors operate with with lower fixed assets and target lower profit margins. With its share price increase, the stock is now trading near my fair value price of $77.57.

Late 2012 and earlier this year I trimmed my position in WMT when it was yielding below 2.5% and there were better alternatives available. Most of those alternatives have dried up and WMT is now hovering around my 2.5% minimum yield. I will likely begin adding to my position as its price and yield allows.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I was long in WMT (1.1% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here.

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  [more]

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7 Tech Stocks With A History of Growing Their Dividends

November 06, 2013 – Comments (0) | RELATED TICKERS: IBM , MSFT , INTC

When you hear the words "tech stocks", many investors think back to the tech bubble in the late 90s. A tech company's goal back then was to plow back every penny into the business for sustained grow. The entire focus was on capital gains. During this era companies that paid dividends were looked down on as inferior.  [more]

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9 Dividend Stock Delivering Good News With Higher Dividends

November 04, 2013 – Comments (0) | RELATED TICKERS: STX , MCY , SPG

I couldn’t begin to estimate how many different stocks are traded around the world on the various exchanges. Like everything else, there are many participants, but few players. Though the population of stocks may be large, there are only a precious few that are worthy dividend stocks. Increasing dividends is one attribute that separates the good dividend stocks from the rest.  [more]

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Nike, Inc. (NKE) Dividend Stock Analysis

November 01, 2013 – Comments (0) | RELATED TICKERS: NKE , CROX , DECK

Linked here is a detailed quantitative analysis of Nike, Inc. (NKE). Below are some highlights from the above linked analysis:

Company Description: Nike, Inc. is the world's leading designer and marketer of high-quality athletic footwear, athletic apparel and accessories.  [more]

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