Co-produced with PendragonY for High Dividend Opportunities
TriplePoint Venture Growth (TPVG) is a business development company (BDC) which we hold in our Core Portfolio. TPVG lends money to venture growth and technology companies. Shareholders get indirect exposure to technology stocks. The great advantage of TriplePoint is that, unlike many technology stocks which trade at lofty valuations, TriplePoint is attractively valued. More importantly for the dividend investor, unlike many technology stocks that tend to pay little or no dividends, TPVG has a dividend yield today at 12% and is very attractively priced.
Every public company passes through the venture growth stage. This moment is critical as the business idea and model are beginning to prove themselves. Companies... more
The market likes doing a lot of worrying about CenturyLink (CTL) to the point that longs regularly collect large dividend yields. Relatively new CEO Jeff Storey has a strong history of growing EBITDA margins and any indications of Enterprise revenue growth will reduce the risk assumed by a 13% dividend yield.
Focus On Margins
In the telecom space, the market wants to see the network and local consumer companies that lack a wireless network to grow revenues. The stocks tend to trade extremely weak when revenues appear to show no signs of stability.
My argument for my bullish thesis is that a management team improving EBITDA margins in the face of declining revenues can be trusted in the short term to effectively prune unprofitable revenues. The company has undertaken this... more
Every April, Johnson & Johnson (JNJ) shareholders know that they’re going to be greeted with a dividend increase announcement. The company has a storied record of not only paying but also increasing its dividend for 56 consecutive years. Moreover, the “four quarters and raise” method has become the default. Indeed, any divergence from this pattern would raise concern. Income investors are accustomed to setting this type of expectation for companies with impressive dividend records.
So General Mills’ (GIS) recent dividend announcements may raise some concern. To be sure the company’s dividend history could be classified as “storied.” General Mills (and its predecessor company) proudly claims to have paid dividends without interruption for... more
Very few people have heard of Regal Beloit (RBC) before, despite the fact the company is a major producer of electric motors and power transmission products, serving customers all over the world, generating billions of dollars in revenue on an annual basis.
RBC data by YCharts
Despite its size, Regal Beloit is relatively unknown in the investment community, and even fewer people know it’s one of those hidden cash flow cows. In the past few years, its free cash flow result has been substantially higher than the net income as its depreciation and amortization charges, which allows it to continue to expand the business without jeopardizing the balance sheet. As nobody has been discussing Regal Beloit in the past two years, I figured it’s time to have... more
Despite all the ominous press being devoted to the soon-to-be-inverted yield curve, it's not always clear why such a thing matters. In other words, how exactly does a line on a graph slipping below zero translate into a recession and equities bear market, with all the turmoil that those things imply?
The answer (which is both simple and really easy to illustrate with charts) is that banks - the main driver of our hyper-financialized society - still make at least some of their money by borrowing short and lending long. They take money that's deposited into savings accounts and short-term CDs (or borrowed in the money markets) and lend it to businesses and home buyers for years or decades. In normal times, long-term rates are higher than short term to compensate lenders for... more
Ever try to catch a falling knife? When a stock on your watch list suddenly hits your entry price target, it's certainly tempting to jump aboard. Of course, nobody knows how much further it can fall, once the sentiment has turned bearish, and it starts receiving downgrades from analysts.
Such has been the case with Apple (AAPL) and General Electric (GE) over the past few months - AAPL is ~28% below its 10/3/18 high of $232.07 after several of its suppliers reported volume cuts in addition to receiving several analyst downgrades. It's now up just ~1% in 2018:
(Source: Yahoo Finance)
Meanwhile, GE has had an even worse time of it in 2018, having fallen ~63% from its 52-week high, after its series of earnings mishaps, CEO replacement, asset sales, and another dividend... more
A Biotech Stock for Income Investors?
In a crashing market, I’d like to read something cheerful. One of things that could lighten up the mood, especially for dividend investors, is an announcement from Amgen, Inc. (Nasdaq: AMGN).
Amgen is a biopharmaceutical company headquartered in Thousand Oaks, California. Last Friday, the company announced that its board of directors has approved a quarterly dividend rate of $1.45 per share, starting with the first quarter of 2019. This represented a 10% increase from the company’s previous quarterly dividend payment of $1.32 per share. (Source: “Amgen Announces 10 Percent Increase In 2019 First Quarter Dividend,” Amgen, Inc., December 7, 2018.)
For the most part, biotech stocks aren’t the go-to choice for... more
Too often, investors focus on the #1 and #2 player in an industry because, frankly, they are usually the largest, get the most media and analyst attention, and likely spend the most on advertising too. But often we find gems in the rest of the peer group, that, despite appearing to be a less 'valuable' company, offer a compelling investment opportunity - especially when the stocks of these companies are trading at a substantial discount to where they 'should' be trading.
Invesco (IVZ), the asset management giant, is one such company. It is paying a dividend yield of 6.9% at current market price and seems to have sold off more than larger players in the industry such as BlackRock (BLK) and T. Rowe Price (TROW).
Invesco was added to our Dividend Growth List on... more
The yield curve inversion has become one of the most talked about and dreaded subjects recently. It is enough just to do a simple Google search and you will see numerous articles and discussions. And they are mostly from 2017 or 2018. Previous yield curve inversions, which did indeed appear a few quarters before recessions, went almost unnoticed by the media and investors alike. And the debate is getting ever hotter as the yield curve is getting closer to zero.
There is already yield curve inversion going on in the US, though not between the two most followed Treasuries, the 10-year and the 2-year, but between the 2- or the 3-year and the 5-year Treasuries. The yield curve inversion is not serious yet, but it is here already, and it is likely to get deeper. Back in July, I wrote:... more
I’m running a little bit late on the November portfolio review. Sorry about that. With the holidays, some bad weather, and basketball season starting up at the local high school, I’ve been busier than normal. However, now that things have calmed down a bit, I had some time to sit down and re-cap last month’s events.
November was a pretty slow month in terms of trades. I only made 3, which are outlined below. For the most part, I was sitting, watching, and waiting for my valuation targets in the market to hit as the major averages sold off. In December, I’ve already been much more active as high quality names cross below my target thresholds.
Unfortunately, my portfolio underperformed the broader market during November. The market sold off strongly in... more