Returning Cash to Investors…
Magna International Inc. (NYSE: MGA) may not be as well known as the other players in the automotive industry, but the company runs a rock-solid business and has been growing its payout at an impressive pace.
Let me explain…
Headquartered in Aurora, Ontario, Canada, Magna International is an automotive supplier. The company makes body, chassis, exterior, seating, powertrain, electronic, vision, closure and roof systems and modules for automakers.
Its customers include well-known names such as General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), Fiat Chrysler Automobiles NV (NYSE: FCAU), Tesla Inc (Nasdaq: TSLA), Bayerische Motoren Werke AG (ETR:BMW), Toyota Motor Corp (ADR) (NYSE: TM), among others.
On top of... more
World copper producing countries in order of amount produced are; Chile, China, Peru, United States, The Democratic Republic of Congo, Australia, Russia and Zambia. I wanted to start off with that, so that people can begin to see why the copper market can be such a great tell for what is happening in the markets. I am willing to bet that most people did not realize that the United States produces more copper than Australia. On the other end of things, copper is used in a wide variety of applications, from roofing and plumbing to electronics to fungicides used on farms. As the world goes around, copper is used throughout.
The year 2017 was a good one for copper prices. Prices dipped a bit into the early summer and then moved up significantly, due to some disruptions... more
Shares of Target Corporation (NYSE: TGT) over the past 3 months or so have continued to bounce up against resistance around the $63 handle. I feel it will only be a matter of time before the share price finally breaks through this barrier. Why? Well last quarter's earnings were exactly what the Doctor ordered in that we saw robust improvement in both eCommerce numbers and fulfillment by store. Target came late to the eCommerce party and with last quarter's digital sales only making up 4%+ of the overall take, there remains plenty of runway for growth in this channel.
What is interesting though is that implied volatility has spiked in Target. At present we are almost at the 33% mark which is basically at its highs for the year (see below). Implied volatility doesn't... more
As mentioned in my previous article on FS Investment Corp. (FSIC) "Upcoming BDC Dividend Cuts For Q3 2017":
"One of the BDCs that I believe could be reducing its dividend this month is FS Investment Corp. for the reasons discussed in this article."
As predicted, FSIC cut its dividend but there is a chance of a special dividend for the reasons discussed in this article. Another business development company ("BDC") that I predicted to cut dividends in August was Prospect Capital (PSEC) in my article "PSEC: Expected Dividend Cut of 20% to 30%".
Both of these articles came out weeks before the announced dividend cuts, but subscribers of my "Sustainable Dividends" platform on Seeking Alpha received plenty of... more
Dividend growth is a vitally important factor for income investing. Long-term income investors often choose companies that raise their dividends every year, in order to compound their wealth and beat inflation handily. I'm not an absolutist in this 'school of thought' of dividend investing, but I do end up following it much of the time.
Over the last year I've recommended a number of dividend growers when they were (and are) reasonably priced. In this article I would like to follow up on a handful of them, and map out what kind of dividend increases we can expect from them in 2018. This 'mini list' is by no means comprehensive. It merely covers some of the stocks I've regularly written about throughout 2017.
Phillips 66 (PSX) has thusfar had a great... more
Obviously you've heard about Bitcoin and you've seen "insane" charts like this:
I'm a conservative, value-based, dividend growth investor. I've been looking for better ways to value Bitcoin (and Ethereum, and Litecoin) but I just keep falling flat. I've also been trying to find a crystal ball to see future prices. If you figure out a valuation or pricing model let me know. Or better, if you find that crystal ball, can you lend it to me for a few minutes?
So, I've started to invert the problem. Rather than trying to figure out when, where, why, and how to invest to make money, I'm looking at how not to lose. I still want to keep playing the game, getting smarter, but I want avoid losing. I think if I do that, I'll end... more
One of the old rules investors follow is that a progressive interest rate curve where longer rates are higher than shorter rates favors banks. The reason is because a bank can lend money and receive higher income on that loan than they pay to the saver who deposited the money. The spread is the bank's profit.
Inflation conundrum While we are told that the Federal Reserve will continue to gradually raise rates, we are also told there is basically no inflation.
Most ordinary investors find this counter intuitive. When interest rates go up we expect inflation. But inflation has a lot of moving parts. Going back to old adages, simply stated, inflation is defined as too much money chasing too few goods.
The answer to the question of why inflation is technically... more
While are you probably busy shopping for your Xmas gifts, I'm spending my days reviewing what happened in 2017. This is a time of reflection to understand what happened and to look forward to 2018 perspectives. Before the holiday season is over, I will cover each industry and select three dividend growth stocks I think will do well in the upcoming year. Make sure to follow me if you want to be aware when each part is published.
Industry Review Besides technology, I think the financial sector is the one that will be the most exciting to follow in 2018. I write this statement with a geeky tone. I'm fascinated by the current financial environment. On one side, we have interest rate and quantitative easing measures in place as we were in the middle of a recession. On the... more
Instead of buying VEREIT, Inc.'s (VER) 7.0% common stock yield, income investors have the option to buy into the commercial REIT's preferred stock layer. As a matter of fact, I think VEREIT's preferred stock is underrated and a compelling alternative to the REIT's common stock. I discuss the advantages and disadvantages of investing in VEREIT's preferred stock layer in this article. An investment in VEREIT's preferred stock yields 6.48 percent.
VEREIT has come a long way since the company went through an accounting scandal in 2014 and suspended its dividend the following year: The REIT got a new CEO, rebranded itself, and sold off non-core restaurant properties in an effort to derisk and delever its portfolio and balance sheet.The dividend was eventually... more
Phillips 66 Partners (PSXP) hasn't turned out to be the awesome MLP investment that I have frequently written about on Seeking Alpha and that I thought it would be. Along with the rest of the MLP sector, it too has suffered with multiple sector-wide sell-offs over the past couple of years. However, that does not mean the partnership has not performed up to expectations - because it has. Starting with the commitment by the GP - Phillips 66 (PSX) - to grow distributions at a 30% CAGR:
Source: Q3 Presentation
Meantime, the growth trajectory stays on track with the most recent drop-down: a $2.4 billion acquisition that includes a 25% interest in the Bakken Pipeline System and the fuel-grade coke processing units at the Phillips 66 Sweeny refinery. The $2.4 billion price tag... more