Posted July 13, 2012 at 1:25 pm
by Brad Wajnman
No matter who you are or how much you’re able to stash away in a savings account, at some point — unless you want to continue working for the rest of your life — you’ll need to turn your accumulated wealth into a reliable stream of income you can live on.
So, let me ask you…
What if you could own a money machine that automatically and reliably cranked out inflation-beating cash for you day-in and day-out for decades with very little risk?
And what if the machine could reproduce itself, breeding more little money machines all working 24/7 to make even money for you?
Posted February 9, 2012 at 3:40 am
via The Dividend Monk
This is the third in a series of articles highlighting dividend companies that have large and durable economic advantages, or “moats”, that protect their business operations and allow years or decades of strong profitability.
When looking for long-term investments, one typically wants to find a business that is performing well not simply because management is on top of their game right now, but rather because the business itself has fundamental and difficult-to-replicate advantages over its competitors.
Some companies keep competitors away by patenting their products. This gives them a number of years where they can get all of their research and development to pay off with nice profit margins.
If a company is big enough, they can successfully layer or ladder dozens, hundreds, or thousands of patents so that at any given time, only a subset of their patents are expiring, and new ones are replacing them. That way, most of the product portfolio is continually refreshed with a strong set of patent shields.
When a company organizes hundreds or thousands of engineers and scientists, and then layers their products with patent shields, this creates a pretty formidable defense against competitors. Some of the largest patent-holding companies often buy companies just for their patents.
Posted January 4, 2012 at 2:44 am
from Dividend Growth Investor
Back in 2010 I was invited to participate in a stock picking competition. The objective was to identify the best four stocks for 2011. You can read the reasons behind my four selections in this article. The four stocks I selected included:
The Procter & Gamble Company (PG) provides consumer packaged goods in the United States and internationally. This dividend aristocrat has raised distributions for 55 years in a row.
Over the past decade, Procter & Gamble has managed to boost dividends by 10.90% per year. Analysts are expecting further increases in EPS over the next two years to $4.57/share, which represents a 16.30% expected growth. The stocks yields 3.20% and is attractively valued at the moment. Check my analysis of the stock.
Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide.
The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. This dividend aristocrat has raised distributions for 49 years in a row. There are only eleven companies in the world, which have managed to accomplish this task. Over the past decade [continue]…
Posted November 21, 2011 at 3:55 am
via Dividend Stocks Online
Income investors know about efficiency. They know that income comes from two sources: First, by making their money work as hard as it can and second, reduce commissions and taxes to their lowest possible level.
In the case of the latter, it’s a little more straightforward. Reduce your tax liability by holding on to our positions for at least one year and for long term investors, attempt to minimize your dividend payouts in your taxable accounts.
For those with taxable brokerage accounts meant for long term growth, contributing the maximum to a traditional IRA and using that account for dividend names is worth considering.
Reducing expenses is easy compared to maximizing the work load of your money. Think of this illustration. A farmer who has 1,000 acres of land buys a high dollar tractor which will allow him to decrease the amount of workers he has to hire.
That’s sounds like a great use of capital but what if he only used his [continue]…
Posted November 6, 2011 at 11:07 pm
We’ll soon give you a link that’ll list 10 top Canadian companies that spit out, on avg, 3% to 5% dividend yields.
An excerpt from the article titled Canada: Land of opportunity?:
Developed countries have found themselves in the economic doghouse of late, saddled with debt, financial crises, and stock markets that have produced middling returns with maddening volatility. A striking exception has been Canada, where stocks have risen an average 13% a year over the last 10 years.
A hypothetical $1,000 investment in the S&P/TSX Composite Index, an index of the stock prices of the largest companies on the Toronto Stock Exchange (TSX), on August 1, 2001, would have been worth $3,455 on August 31, 2011–versus only $1,305 had you invested it in the S&P 500® Index (SPX) during that same period.
Now, that link…
The companies are listed at the bottom of the page linked here…
Posted October 17, 2011 at 2:41 am
by Paul Tracy
I call it the “apple tree” loophole. I think it’s one of the best ways I know to make money in the market, especially if you don’t want to fuss over your investments every day.
But before I tell you what the loophole is, let me first tell you what it’s not…
It’s not illegal. It’s not confusing. And it’s not a get-rich-quick scheme.
When used properly, this loophole can greatly reduce the risk of losing money in any market.
But before I go on, I must say that there are a few caveats to how you use it. First, you have to follow this simple strategy exactly as I’ll outline below. Second, it only works with high-yield stocks and funds.
It all started with a simple saying I heard years ago…
“The best time to plant a tree was 20 years ago. The second-best time is today.”
That saying has stuck with me. And if you hadn’t noticed, it’s talking about a lot more than planting a couple of apple trees in your backyard and enjoying the fruit later.
The real lesson here is this: It’s the moves we make today that deliver the greatest payoff down the road.
And that’s the perfect analogy for investing in consistent [continue]…
Posted September 28, 2011 at 1:55 am
by Stoyan Bojinov
As the ETF industry has expanded rapidly in recent years, the universe of asset classes and investment strategies accessible through the exchange-traded wrapper has increased dramatically.
In addition to funds offering exposure to natural resources and volatility–two asset classes previously beyond the reach of many investors–a number of products have popped up that seek to deliver opportunities to tap into intriguing investment methodologies in a cost efficient and time efficient manner.
One area of tremendous interest focuses on dividends; there are literally dozens of ETFs that are designed to concentrate exposure on dividend-paying stocks, from those linked to dividend-weighted methodologies to those with stringent consistency requirements for inclusion.
Popular equity funds in the space include DOD, IDV, and HDV; while products with international flavor like PID, DWX, and EDIV can help investors expand the geographic scope of their portfolio’s holdings.
Dividend-focused ETFs may be appealing to a number of different types of investors. For those seeking relatively low risk equity exposure, dividend-focused strategies allow for a dialing back of risk while still keeping a toe in the water. For those seeking to beef up current returns with bond yields at all time lows, some of the yields paid out might be rather attractive.
For investors seeking broad-based stock exposure tilted towards companies with the highest dividend yields, funds such as [continue]…
Posted September 21, 2011 at 1:53 am
from The Dividend Guy Blog
High dividend yield in a low risk portfolio? How is that possible? Well there is a way that you can invest your money and earn a high dividend yield without taking much risk.
I think that’s this is basically what we all want as dividend investors:
High dividend yield from low risk stocks. But unfortunately, it is rarely the case. If you remember my yellow pages (YLO) analysis you know that high dividend yield is usually followed by dividend cuts (especially if the dividend yield is combined with a high payout ratio!). So how can you find these precious gems on the market? In fact, there are a few steps to build the most solid portfolio with the most impressive dividend yield:
#1 Build some cash in a money market fund
Building a strong portfolio combining high dividend yield and low risk companies requires patience and discipline. The very first step you need to accomplish is to build up enough cash so you can move quickly when you are ready.
So instead of gradually buying stocks as you gather a $1,000 or so as I suggest in Dividend Investing, you can also put your money aside and wait a little while.
#2 Build your ‘stocks on the radar‘ list
While you are gathering your cash (trust me, you need a lot for this investing technique to produce impressive results), you will also build a list of 10 to 20 stocks you want to follow.
In order to build this list, you should use criteria found in my 15 things I look at before trading a stock. Most importantly, focus on a good dividend yield (between 3 and 5% at the moment would be reasonable) combined with a low payout ratio (under 70%) and with constant sales and earnings growth. You are basically building a list of companies that are already in the mood of raising their dividend payout and that they can sustain this rhythm.
Posted September 16, 2011 at 3:49 am
by Deanna Pan
Investing in companies that regularly raise their dividends is a popular strategy that marries the lure of cash with the hunt for consistent growth. SPDR S&P Dividend (SDY) is an exchange-traded fund that generates a stream of growing income from a portfolio of some of America’s most steadfast companies.
The ETF tracks the S&P High Yield Dividend Aristocrats index, which holds the 60 highest-yielding stocks in the S&P Composite 1500 that have raised their payouts at least 25 years in a row (the S&P 1500 is an index of small, midsize and large companies).
The stocks are weighted according to yield, although no issue may account for more than 4% of the ETF, and S&P rebalances the holdings quarterly.
The result is a portfolio of established firms with records of steady growth. Beyond the ETF’s biggest positions, many holdings are [continue]…
Posted September 15, 2011 at 2:23 am
by Jeff Bailey
No telling for sure as of this writing whether President Obama will get his jobs bill passed; whether the legislation would actually do much for the economy if it does become law; or whether the stock market would get excited even if a jobs law did revive economic growth.
With all those ifs and more, it’s easy to make the case for a sideways-at-best equities market in coming months. If that’s so, what to do?
Focusing on dividends is never a bad idea. Rocket-like stock appreciation is always sexier, of course, and who doesn’t like the trajectory of this chart of Amazon’s (AMZN) market cap?
But thankfully many smart market commentators have in recent months pumped out persuasive articles on the power of dividends. We all know payouts are important, but being reminded helps encourage us to keep hunting for dividend-paying companies.
Ben Baden at U.S. News argues that dividends represent the bulk, over time, of the return one sees in the S&P 500, far more than stock price appreciation. He also notes, in this primer, that dividend-paying companies tend to have solid balance sheets, and thus can withstand tough times.