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EnigmaDude (61.61)

"Best" Dividend Plays for 2009 - mid-year results



June 03, 2009 – Comments (2) | RELATED TICKERS: MDP , IGT , EQ.DL

For those of you who follow TMFDeej, this is a follow-up to a post he made back in Feb of this year based on an article in Barrons.  Basically it was about the 20 "best" dividend-paying stocks for 2009.  Here is a link to the original article that he referenced:  20 Best Dividend Plays

Now I have nothing against Deej, and I enjoy many of his blog posts, which are plentiful!  But I decided to follow-up and do an (almost) mid-year check on how his take on the best of the best and the ones that he did not like are faring.  The results are interesting.  Here is a summary of what I found.

"Best" (according to Barrons and Deej) Dividend Stocks for 2009

MO  % Price Change 4 Week 3.13 12 Week 3.13 YTD 13.68

RAI  % Price Change 4 Week 2.40 12 Week 19.44 YTD -0.62

LO   % Price Change 4 Week 10.03 12 Week 20.92 YTD 23.07

T    % Price Change 4 Week -6.26 12 Week 7.91 YTD -12.84

VZ  % Price Change 4 Week -3.46 12 Week 7.10 YTD -12.77

BMY  % Price Change 4 Week 3.66 12 Week 0.84 YTD -12.26


Not the Best (according to Deej)

MDP  % Price Change 4 Week 5.33 12 Week 120.88 YTD 65.01

IGT    % Price Change 4 Week 14.40 12 Week 109.73 YTD 45.00

EQ    % Price Change 4 Week 11.37 12 Week 27.62 YTD 20.38

PPG   % Price Change 4 Week -0.31 12 Week 39.58 YTD 7.54


So what did I learn from this exercise?  First, don't believe everything that you read!  Second, the market this year does not seem to favor the tried and true blue-chip stocks like tobacco and telecom, at least not so far.  Expect the unexpected, like gaming and publishing stocks to beat the market.

Other than that, well that's all I got!


2 Comments – Post Your Own

#1) On June 03, 2009 at 11:24 PM, walt373 (99.83) wrote:

You can't take one sample and assume it's the new trend. As always, there are many possible scenarios that can play out. It just so happened that the underdogs won this time. Just because a prediction was wrong does not mean that the reasoning behind the prediction was faulty. That said, market predictions are always based on extremely limited information so their accuracy are usually low to begin with.

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#2) On June 04, 2009 at 12:31 AM, checklist34 (98.36) wrote:

i personally think that anybody investing in those big blue chip tobacco and telecom stocks with high yields right now will do very well.  I'd bet the title to my favorite car that you'll make money going forward on VZ, T, MO, and more. 

Those stocks aren't my style right now...  but I like them all, alot.  Throw in unilever, maybe BP ...

I would offer some ideas for good dividend stocks in the BDC area.  The BDC area features some former high fliers like ACAS and ALD with share prices in the toilet over tangible, very real problems.  These BDCs feature share prices down 90% or more from their former highs and the potential for big future returns if they can get their ducks in a row.  Other BDCs have share prices that are hardly down from their 52 week highs, and so from a distance can look not cheap.  But...  they may be the only BDCs in a position to buy super cheap assets right now (maybe from the other BDCs who are currently experiencing great pain) and several of them have current double digit yields, many of which should be sustainable (and HAVE TO BE sustained if they can be due to the BDC model and its various regulations).

I am long ARCC, AINV, FSC, HTGC, PNNT, and PSEC as good examples.  These all yield 10+%, all trade well below book value, none of these are real risky (in my view, I am capable of error), and if they can capitalize on the downturn they may well be able to go on to new all time high share prices at some future date.  While ACAS may be more of a question of "what % of its previous price can it get back to" these might be more of a question of "can it go higher?"

I do not think that any sector has been as out of favor as BDCs were at the march low.  Greedy when others are fearful...

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