Investors have been increasingly searching for yield in dividend-paying equities recently, in the absence of attractive-enough yields in the bonds market. An article in The Wall Street Journal (WSJ) Monday discussed a potential shift in this strategy, as treasury rates were climbing. The 10-Year Treasury note yield at around 2.4% (down from a recent 2.6% high) is currently topping the ~1.9% dividend yield on the S&P 500 (NYSEARCA: SPY). This is a good discussion, but in our view the article misses an important point - share buybacks. In our view, besides the outlook for the economy and the potential impacts from President Trump's agenda (and how it should move in Congress), share buybacks have played an important role in driving the stock market in recent years and may continue... more
GameStop Corp. (NYSE: GME) has fallen over 10 percent after reporting weaker than expected guidance, and this is sure to make the company's six percent dividend even more attractive to yield-hungry investors.
GameStop, despite its challenges, still fills an important role in a risk adverse investor's portfolio. The stock is an excellent hedge against systematic market risk (the business cycle), it provides the best yield in gaming, and it has low valuation multiples.
An Unusual Niche
Most investors do not look at stocks like GME for growth. Despite being a gaming company, GameStop's stock is an income investment more suitable for older income investors and retirees.
The younger crowd gravitates toward growth stocks like Activision (Nasdaq: ATVI),... more
The banks have certainly been a hot trade in the past few months as rates have finally begun to take off higher. But for income investors, some large banks like Bank of America (NYSE: BAC) still aren't paying strong yields like they used to. The prospect of higher rates may help ease some of that burden through higher earnings but as stock prices move higher, the dividend has to catch up as well. The good news is that BAC has loads of preferred stocks to choose from if you want income and in this article, we'll take a look at a way to get a nearly 6% yield from BAC if you're interested in taking advantage of its fundamental strength but don't want to buy the common.
The issue in question is the 6.000% Non-Cumulative Preferred Stock, Series EE, which was issued just... more
Last time, I wrote about How To Generate The Income You Need From A Dividend Portfolio for retirees. In that article, more than 200 comments were generated!
The vibrant SA community added to the discussion, including personal stories and other strategies for generating income, such as using closed-end funds, preferred shares, and options. SA community member, CMPMD, generously shared a tested way to protect your stock portfolio even during market crashes.
This time, I'll write about how to protect the principal of your dividend portfolio.
To protect the principal of your portfolio, there are multiple things retirees can do, such as buying quality companies at the right valuations.
The thing is each of us probably has a different definition for "quality"... more
On a year-over-year basis the UBS ETRACS 2xLeveraged Long Wells Fargo Business Development Company ETN (NYSEARCA: BDCL) has returned 41.1% based on a purchase on March 21, 2016 at $15.90, the March 21, 2017 price of $20.80 and the dividends of $2.853 paid since March 21, 2016. This does not include any reinvestment of dividends or any gains or losses on reinvestment of dividends. It also does not include my projected April 2017 quarterly dividend of $0.8261. The Index upon which BDCL is based is a float-adjusted, capitalization-weighted Index that includes business development companies listed on the major exchanges. There is an unleveraged ETN that is based on the same index, the UBS ETRACS Wells Fargo Business Development Company ETN ( BDCS). It should be noted that Wells Fargo (NYSE:... more
Physicians Realty Trust (NYSE: DOC) affords income investors with a stable dividend and compelling growth prospects as the real estate investment trust continues to invest a lot of money into its property portfolio. Physicians Realty Trust has good (though not great) dividend coverage stats, and the dividend should be safe at this point. Physicians Realty Trust's shares are throwing off a 5 percent dividend yield.
Real estate investment trusts are attractive income vehicles for dividend investors. They invest in a portfolio of real estate properties and then sign long term leases with tenants. The recurring cash flow from the leases is then used to pay shareholders a regular cash dividend, potentially significantly increasing the yield on cost for income investors over time.... more
Masco Corporation (NYSE: MAS) announced that its Board of Directors declared a quarterly dividend of $.10 per common share, payable on May 8, 2017, to shareholders of record on April 17, 2017.... more
Ford Motor's (NYSE: F) shares crashed this week after the U.S. auto company was again rated 'Underweight' by Morgan Stanley. But that was not all the bad news shareholders had to digest recently: U.S. auto sales in February declined at a quick pace, and Ford Motor guided for 1st quarter profits that missed analysts' consensus estimates.
It really wasn't a good week to be a Ford shareholder. Analysts at investment bank Morgan Stanley reaffirmed their 'Underweight' rating for Ford Motor's shares with an $11 target price. According to MarketBeat, a website that consolidates analyst research and their target prices, eleven analysts out of twenty-one rate Ford Motor's shares 'Buy/Strong Buy', while eight analysts think investors should... more
Almost three years ago I wrote a post titled, "Why I Love Stock Spin Offs." I essentially discussed the typical "unlocked" values stock spin-offs can provide for both the parent and offspring stock once the separation occurred. In general, many stock spin-offs do offer great value and benefits to shareholders, as the newly separated businesses can better focus on their core business or sector more efficiently. Many conglomerates operate businesses in various sectors, and thus have an inability to focus their company core competency in the appropriate direction. Of course, these are the spin-offs that tend to offer the best return for their shareholders as two smaller yet potentially stronger companies emerge. Sometimes, however, a company may decide to shuttle off a... more
Accenture (NYSE: ACN) reported second-quarter results that caused its stock to drop 3-4% Thursday morning.
Accenture’s organic sales grew 6%, and adjusted earnings per share were roughly flat compared to the prior-year period.
The company’s sales and earnings were roughly in line with analysts’ estimates heading into the quarter.
Management expects full-year revenue growth of 6-8%, which is slightly higher than its previous forecast of 5-8% growth.
Accenture also increased its adjusted earnings per share guidance to $5.70 to $5.87 from $5.64 to $5.87.
Accenture’s shares hit an all-time high earlier this week before selling off Thursday and have roughly kept pace with the broader market over the last year.
Why did the stock... more