Investing in dividend-paying companies is a tried and tested method of seeking alpha, and dividends have contributed enormously to the growth of investor portfolios over the years. Investing for dividend income is sometimes considered a simpler task than finding a stock that is expected to grow exponentially, or an undervalued issue that is expected to converge with its intrinsic value. Often, this presumption leads to losses for investors, and I believe investing for dividend income should be considered as demanding as investing for value or growth.
Historically, dividend cuts have resulted in massive erosion of stock market value of listed companies, and investors should try their best to avoid investing in such companies.
The iShares Select Dividend ETF (DVY)... more
People's United Financial (PBCT) is a rather under-the-radar stock. However, the business has several characteristics of a high-quality investment.
To start, the company has a long and prolific history of paying rising dividends to shareholders. With 26 years of consecutive dividend increases, People's United Financial is a member of the Dividend Aristocrats Index. You can view our full list of 57 Dividend Aristocrats here.
With that said, investors cannot rely on People's United Financial's dividend history alone to measure its dividend safety. In this article, we measure People's United Financial's dividend safety relative to its earnings, free cash flow, recession performance, and debt (including an interest rate stress). If you prefer learning through videos, you can watch a... more
Chatham Lodging Trust (CLDT) is a promising lodging REIT to consider on the drop. The real estate investment trust has a very strong real estate platform and industry-leading EBITDA margins. Chatham Lodging Trust easily covers its dividend payout with adjusted funds from operations, and shares are more reasonably valued after the price drop in February and March. An investment in Chatham Lodging Trust at today's price point yields 7.1 percent.
Chatham Lodging Trust - Portfolio Snapshot
Chatham Lodging Trust is a U.S-focused lodging REIT with an equity value of $870 million. The real estate investment trust primarily invests in upscale, extended-stay hotels and premium-branded, select-service hotels. Chatham Lodging Trust's property portfolio includes different Marriott- and... more
As global stock markets plummeted for nearly three months starting from September last year, many investors were forced to re-think their investment strategies and allocate capital more efficiently to achieve an acceptable level of diversification. Many investors got a reality check regarding the state of the U.S. economy in this period, and the partial inversion of the yield curve created havoc in markets. Only then did investors realize the need to move on from stories and invest in facts, and this prompted many investors to go back to basics and identify which stocks were poised to do relatively better if markets continue to crash, or if the U.S. enters an economic recession.
This formed the backdrop for me as an investor and an analyst to do a couple of... more
Enterprise Products Partners L.P (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products. Midstream energy companies have had a harsh run over the past five years, as many operators within the space have witnessed depressed share prices compared to the S&P 500. In the fall of 2014, EPD broke $40 per share, and then the downward spiral in energy occurred, pummeling the share price down to $20.60 in February of 2016. It has traded sideways since then, only to break $30 and fall right back to the mid-to-high $20s.
I think EPD is very interesting, as the company offers a continuously growing dividend of $1.74 per share, which is a forward yield of 6.19%. The combination of a growing... more
HCP, Inc. (HCP) was once a staple in all dividend investors' portfolio. A high-yielding, continually increasing, dividend real estate investment trust (REIT) that we all loved. We all remember, it was like clockwork where the big REIT would announce an increase every January and it poured money back to the shareholder.
Then, in October of 2016, HCP decided to sell assets and package those assets into a spin-off company called QCP Properties. What investors perceived as a great deal, earning shares in a newly formed entity of QCP and a "fat" one-time dividend of $6.17 per share, turned out to be a very poorly run company with poor-performing assets in QCP. Further, QCP was then sold off to Welltower (NYSE: WELL) for $2 billion in cash, within less than 2 years.
To paint a picture... more
Co-produced with PendragonY for High Dividend Opportunities.
UBS ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend (SMHD) is a UBS Leveraged Exchange Traded Product that provides exposure to high-yielding stocks with a smaller market cap. By using the Solactive US Small Cap High Dividend Index that tracks 100 individual high yielding small cap stocks, the ETN mitigates the risks from holding any single company. SMHD currently yields 15.2%.
SMHD has the advantage of providing an instant diversification with exposure to 100 of the highest-yielding small cap stocks. We have been long SMHD for a while now and it has been a strong out-performer, returning 86% since we introduced it to our model high-dividend portfolio and recommended it to our investors exactly three years... more
The final month of the quarter is flying by. Where has time gone? With just under half of the month left, I wanted to follow Lanny's lead and prepare a March Dividend Stock watch list myself. Fresh off of my recent portfolio review, I am ready to continue pushing forward and grow our portfolio. This listing will have three stocks on it. Let's dive into my March dividend stock watch list.
I mentioned in a Tweet how this market is making it difficult to find a potentially undervalued dividend stock. March is yet another month of insane stock price appreciation. Luckily, with the help of a few Twitter followers, I was able to identify three stocks to keep an eye on. For each of the companies, we will use the following sources for information while running them through the infamous... more
By Karina Tjin
Today we examine the impact of the members of the S&P 500 Dividend Aristocrats Class of 2019 on the index's factor risk and sector composition. In our previous blog, we introduced these new constituents and discussed their quality ranking.
Risk decomposition of the S&P 500 Dividend Aristocrats using Axioma's US Fundamental Equity Risk Model MH4 supports the view that the index contains elements of the quality factor. Our definition of quality uses return on equity, accruals ratio, and financial leverage ratio. Of these three calculations, Axioma's Risk Model decomposes risk into profitability (return on equity) and leverage. A snapshot of the index on Jan. 31, 2019, shows us that the index is more actively exposed to those two factors than is the... more
Pure Multi-Family REIT (OTCQX:PMULF) (TSX: RUF.U or RUF.UN) delivered solid Q4 2018 earnings with mid-single digit same property net operating income growth. The company's outlook is looking good thanks to strong market fundamentals and favourable demographic trends. As a result, its dividend payout ratio is expected to fall below 100%. This should result in multiple expansion of its valuation. The company pays an attractive 5.7%-yielding dividend. It is a good candidate for investors seeking capital appreciation and dividend income.
Recent Developments: Q4 2018 Highlights
In Q4 2018, Pure Multi-Family grew its revenue by 5.3% year over year to US$27.6 million thanks to its strong SPNOI growth of 4.4%. In addition, its same property physical occupancy rate... more