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Dividends4Life (23.61)

November 2014

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Occidental Petroleum Corporation, 4-Star Stock With A High Free Cash Flow Payout

November 28, 2014 – 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 one 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.

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General Mills, Inc. (GIS) Dividend Stock Analysis

November 26, 2014 – Comments (0) | RELATED TICKERS: GIS , K , CPB

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

Company Description: General Mills, Inc. is a major producer of packaged consumer food products, include cereal, yogurt and Betty Crocker desserts/baking mixes.  [more]

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6 High-Yielding Mega-Cap Stocks

November 25, 2014 – Comments (0) | RELATED TICKERS: XOM , PG , ABBV

There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior management and foresight. Often these are more mature companies that also offer stability and predictability, usually at the expense of dynamic growth. These are your mega-cap stocks.  [more]

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Walgreen Co. - A 5-Star Stock Trading At A Discount, But Is It Enough?

November 20, 2014 – Comments (0) | RELATED TICKERS: WBA , CVS , RAD

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

Company Description: Walgreen Co. is the largest U.S. retail drug chain in terms of revenues, this company operates more than 8,000 drug stores throughout the U.S. and Puerto Rico.

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...

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Becton, Dickinson and Co. (BDX) Dividend Stock Analysis

November 19, 2014 – Comments (0) | RELATED TICKERS: BDX , BCR , BAX

Linked here is a detailed quantitative analysis of Becton, Dickinson and Co. (BDX). Below are some highlights from the above linked analysis:

Company Description: Becton, Dickinson and Co. provides a wide range of medical devices and diagnostic products used in hospitals, doctors' offices, research labs and other settings.

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

BDX is trading at a premium to all four valuations above. The stock is trading at a 16.6% premium to its calculated fair value of $110.84. BDX did not earn any Stars in this section.

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%

BDX earned two Stars in this section for 1.) and 2.) 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%. The company has paid a cash dividend to shareholders every year since 1926 and has increased its dividend payments for 41 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

The NPV MMA Diff. of the $448 is below the $500 target I look for in a stock that has increased dividends as long as BDX has. If BDX grows its dividend at 10.1% per year, it will take 7 years to equal a MMA yielding an estimated 20-year average rate of 2.98%.

Memberships and Peers: BDX 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: The CR Bard Inc. (BCR) with a 0.5% yield, Baxter International Inc. (BAX) with a 2.9% yield and Medtronic, Inc. (MDT) with a 1.8% yield.

Conclusion: BDX did not earn any Stars in the Fair Value section, earned two Stars in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of two Stars. did not earn any Stars in the Dividend Income vs. MMA section for a total of two Stars.

Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $124.92 before BDX's NPV MMA Differential increased to the $500 minimum that I look for in a stock with 41 years of consecutive dividend increases. At that price the stock would yield 1.8%.

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 10.4%. This dividend growth rate is higher the 10.1% used in this analysis, thus providing no margin of safety. BDX has a risk rating of 1.25 which classifies it as a Low risk stock.

In spite of operating in the competitive medical equipment market, BDX has enjoyed more favorable demand and pricing than others in the industry. The company’s needle and surgical business has provided investors with robust returns for years. Strong global demand for the company's safety, diabetes care and disease-testing products should be sustainable in the foreseeable future.

The company reported fiscal fourth quarter 2014 earnings of $1.68 per share, up 9% from the year-ago quarter as a result of higher revenue growth and stringent cost control. BDX continues to focus on expansion in overseas markets, with an eye on emerging markets. Higher international safety-engineered product sales also drove results.

BDX continues to be challenged by demand for health care products, with hospital and lab-testing spending as areas of high concern. The company faces a number of highly-focused competitors in each of its three business segments and in each market in which its products are sold. The stock is now trading at a premium to my calculated fair value of $110.84 and its current yield is under 2.0%. As such, BDX is not a serious contender for any of my income portfolios 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 BDX (0.0% of my Dividend Growth Portfolio) and was long MDT in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.

Related Articles:
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- Abbvie Inc. Trading At A Deep Discount, But With Risks
- Nike, Inc. Has Strong Financial, Operating And Dividend Metrics
- United Technologies Corp. (UTX) Has A Strong Balance Sheet And Excellent Free Cash Flow
- Verizon Communications Inc. Is Focused On Generating Cash And Lowering Debt
- More Stock Analysis  [more]

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Dividend Investors Should Focus On Stocks, Not The Market

November 18, 2014 – Comments (0) | RELATED TICKERS: XOM , IBM , CSCO

The election may be settled, but investors fears are not. When Obama was first elected, the market plunged on worries of the looming Fiscal Cliff and European concerns. Budget negotiations began on Capitol Hill, optimism returned and the market responded. More recently, Obama's popularity plunged, then the Republicans regained control of the Senate. Is it a stock market, or a yo-yo?  [more]

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4 Stocks Growing Future Yield With Increased Dividends

November 17, 2014 – Comments (0) | RELATED TICKERS: CBL , PRU , ADP

In the southern U.S. where I live, there has been some controversy over harvesting forests of hardwoods and reseeding them with pines. Growing hardwoods is very similar to investing in dividend stocks. What you plant or invest in today will not yield much for years to come. That is not to say progress is not seen. It is just slow and deliberate. To grow hardwoods it takes great foresight and commitment to the process. The small investments we make in quality dividend stocks each month won’t yield large payments in the near-term. It will take time for the payments to grow and compound, but they will.

Below are several companies planting the seeds for future yield by increasing their cash dividends...

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Dividend Income Progress Update - October 2014

November 15, 2014 – Comments (0) | RELATED TICKERS: ITW , O , LEG

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 52 consecutive months of increases after June 2010's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 81 of the last 83 months.

My goals were defined in this December 1, 2007 Investing Goals post and last updated in my 2014 Investing Goals post. Below is an updated version of the table found in the original post.  [more]

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Exxon Mobil Corporation, Currently Undervalued And A Strong Buy

November 13, 2014 – Comments (0) | RELATED TICKERS: XOM , BP , CVX

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

Company Description: Exxon Mobil Corp., formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company.

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...

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Waste Management, Inc. (WM) Dividend Stock Analysis

November 12, 2014 – Comments (0) | RELATED TICKERS: WM , CWST , RSG

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

Company Description: Waste Management Inc. is the largest U.S. trash hauling/disposal concern.  [more]

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The Secret Ingredient of Dividend Growth Stocks

November 11, 2014 – Comments (0) | RELATED TICKERS: JNJ , KO , PG

When people learn that I am an income investor it is not uncommon for them to ask why I invest in stocks instead of  other "safer" alternatives such as bonds, high yield money market accounts [MMA] or certificates of deposits [CD]. I generally start with my short answer of, "Dividend stocks have a secret ingredient that makes them a much more desirable investment.  [more]

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Stocks Providing Positive Feedback With Increased Dividends

November 10, 2014 – Comments (0) | RELATED TICKERS: VVC , ATO , HON

It seems that every so many years, the market turns down and someone declares the death of buy-and-hold. Some even go as far to say that Warren Buffett has lost his touch. With time on their side, the buy-and-hold investors and Mr. Buffett always seem to make a spectacular rebound. As long-term dividend investors, our focus should be on acquiring fundamentally sound dividend growth stocks at a reasonable valuation and maintaining our asset allocation.

This week, several companies provided their shareholders positive feedback with increased cash dividends...

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Abbvie Inc. (ABBV) Trading At A Deep Discount, But With Risks

November 06, 2014 – Comments (0) | RELATED TICKERS: ABBV , BMY , LLY

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

Company Description: Abbvie Inc. is a global research-based pharmaceuticals business that emerged as a separate entity following its spin-off from Abbott Laboratories at the start of 2013. AbbVie's key drug is Humira for rheumatoid arthritis.

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Monsanto Co, Desirable Dividend Fundamentals, But Pricey

November 05, 2014 – Comments (0) | RELATED TICKERS: MON , MOS , POT

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

Company Description: Monsanto Co. is a global provider of agricultural products and integrated solutions for farmers.  [more]

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Dividend Growth Stocks With A Defined-Benefit Pension

November 04, 2014 – Comments (0) | RELATED TICKERS: JNJ , MMM , PG

This year I turned 52. It seems that with each birthday, I think about and plan for retirement a little more. I have long since resolved that social security will not provide for my needs in retirement (nor was it ever intended to). I am one of an ever-shrinking group that is still covered by a defined benefit pension plan, though it was recently frozen and closed to new employees. So, how should a pension fund figure into my retirement?  [more]

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Stocks Heating Up Their Yields With Higher Dividends

November 03, 2014 – Comments (0) | RELATED TICKERS: MCHP , EDE , AFL

Dividends from a quality, well-diversified portfolio are much more predictable than capital gains and best of all, they are passive. You don't have to do anything, they just show up in your brokerage account each quarter. Inflation? Not to worry, the good companies routinely raise their dividends well in excess of the inflation rate.

This week as the weather turns cold, the dividend increases heat up with several companies raising their cash dividends...

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