A public utility holding company whose public utility subsidiaries have traditionally provided electric service, consisting of generation, transmission and distribution, on an integrated basis to their retail customers.
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Good dividend yield, the first to sink real money into carbon capture technology that I know of, investing in renewable energy sources. Invested in direct stock purchase plan offered through Computershare. Curently rated Four stars by Standard & Poors.
Tuesday - June 14 - 2011
Why doesn't anybody update these things? Well, I will.
Let's have a look at what this dull, boring, utility has done since my start date of 11/23/2009. Wow. Here we go again. The power of dividend investing is well illustrated here.
Look at my start price - listed as $29.46.
Hey, every time a stock goes ex-dividend, CAPS assumes the dividend is reinvested in shares at the ex-dividend day opening price, the calculates a "reduction factor."
The formula for the reduction factor is
1 / 1 + (amount of dividend / ex-dividend day opening price)
The reduction factor is then multiplied by your CAPS start price. The result will be your new start price. This is done with every dividend payout, every time the stock goes ex-dividend.
My real, original start price for this boring, unexciting, reliable dividend payer and grower is $31.74 - not $29.46. Dividends have chopped $2.28 off my original start price, for a total reduction of 7.18%.
SCG is currently carrying a dividend yield of 4.93%.
However, at my original real start price of $31.74, my yield on cost would now be 5.8%.
That ever-dwindling start price compared to the current price is a good approximation of total return. However, I don't reinvest my dividends. I take them in cash.
The cash back so far.....
..................2/08/2010.......................$0.41
..................5/06/2010.......................$0.42
................ .8/06/2010.......................$0.42
.................11/08/2010......................$0.46
...................2/08/2011......................$0.46
...................5/06/2011......................$0.46
...............Total...................................$2.63.
Dividends have chopped $2.28 off my start price since 11/23/2009, because CAPS assumes dividends are reinvested.
But I've received $2.63 in cash.
As far as I'm concerned, now I personally only consider myself to be out $29.11 for each share. And that number keeps getting smaller, and the dividend keeps growing.
The current price represents a 17.5% gain from my actual original start price of $31.74.
I don't care a whole lot what the current price does. If it's up significantly, I can certainly live with that.
If the price takes a dive and I'm convinced the dividend is just as safe as ever....oh, goody! Time to snap up some more!
In early August, when SCG goes ex-dividend again, my CAPS start price will drop once more - to right around $29.11, give or take a couple cents. That's assuming another $0.46 payout, which, by the way, will bring my total dividends received to $3.09. Then my shares will have only cost me $28.65.
In November my CAPS start price will start working its way down through the $28's.
What I'm trying to tell you is that those periodic reductions in your CAPS start price represent real-money returns for dividend investors.
Dividend investors get those real-money returns no matter what the current price does.
The current price and how it compares to what you originally paid is not the only game in town. It's subject to the manic-depressive mood swings of the herd. You can't count on it.
Play the other end, and laugh at the depressing, sky-is-falling paranoia of the bloggers here that are always complaining that they "can't figure out how to make money in this market."
Whether you reinvest your dividends or take them in cash like I do, all...you gotta....do...is find a keeper...and KEEP it...
and you can't help but win.
Duh!!!
Why did I keep calling it "SCG" in my pitch reply above? Well, that's just a brainfart, so ignore it, OK? The information and the numbers are all about AEP.
Of course, you could go check out my pitch for SCG, too...I updated it as well.
Dividends are an investor's secret weapon for stable, GROWING returns...while the moronic herd drives the current price up...and down...and up...and down...
Whether we're talking about my CAPS start price...or my original start price minus total cash dividends received...
Both have this in common...they only go one direction....DOWN!
It's a much better game, and one you can rig in YOUR favor...by dividend investing.