Eli Lilly Dividend Increase Reveals Big Trend
Today’s chart highlights another quiet winner in the health care business…Eli Lilly and Co (NYSE: LLY).
Regular readers have heard our bullish argument on health care before. As Baby Boomers enter their golden years, they’ll need more pills, more medicine, and more doctor visits. And we’ve seen this trend driving dividends higher for many businesses, like pharma giants Pfizer Inc. (NYSE: PFE) and Bristol-Myers Squibb Co (NYSE: BMY).
We can see this trend pay off in the latest Eli Lilly stock news. The company has a leading position in the treatment of diabetes and osteoporosis. And with a number of potential blockbuster drugs in development, analysts have an optimistic view of this... more
As history's greatest investor, Warren Buffett's stamp of approval carries a lot of weight with buy and hold investors. Which is why the fact that Wells Fargo (WFC) remains 14.4% of Berkshire Hathaway's (NYSE: BRK-A) (BRK-B) portfolio is seen as a strong endorsement by many to own this venerable financial institution. That's based on the assumption that the bank's recent scandals represent a "this too shall pass" long-term buying opportunity.
Now I'm a big fan of Buffett's contrarian approach (be greedy when others are fearful). However, I also believe that one must be careful to differentiate the core reasons behind what has made Wells Fargo great in the past, to make sure that the investment thesis still holds.
In the... more
I want to discuss the intelligent way for retirees to structure their portfolio. There are a few good options. However, there is also one terrible option. I want to begin by addressing the terrible option. Occasionally, I hear from investors demanding 14% or even 16% annual returns from their portfolio. They don’t demand it because it is a reasonable goal. They demand it because that is the level required to sustain their retirement.
The problem is simple. 14% annualized returns are perfectly reasonable during a bull market. They are not perfectly reasonable for an average over multiple decades. If an investor begins their measurement period after the great recession, it should be no surprise if their annual returns are extremely high. On the other hand, if they had to include... more
CBL Properties (CBL) is in an interesting situation. I'll be primarily talking about their preferred shares but wanted to touch on the common stock first.
The stock price recently dropped by 20% after a dividend cut. However, it's not as if the company couldn't cover the dividend:
Source: CBL investor presentation
CBL has a strong payout ratio. On the Q3 2017 earnings call, CEO Stephen Lebovitz explained why they made the choice to cut the dividend (emphasis added):
This is not a step we take lightly and not one we plan to repeat. Consistency of our dividend is extremely important. As one of the largest shareholders of CBL, the reduction in the dividend impacts senior management drastically as well as our board and employees. At the same time, free cash... more
How well are typical American households faring through the third quarter of 2017?
To answer that question, we're going to turn to a unique measure of the well-being of a nation's people called the national dividend. The national dividend is an alternative way to measure the economic well-being of a nation's people that is primarily based upon the value of the things that they choose to consume in their households, which makes it very different and by some accounts, a more effective measure than the more common measures that focus upon income or expenditures throughout the entire economy, like GDP, which have proven to not be well suited for the task of assessing the economic welfare of the people themselves.
To get around that problem, we've developed the national... more
Statoil (STO) and Vermilion Energy (VET) are two of Europe's primary suppliers of natural gas. Both also produce Brent-priced crude oil in Europe and elsewhere. As a result, the two companies are in an excellent position to profit off of two recent events that have caused the price of European natural gas to spike higher. Yesterday, Bloomberg reported a hairline crack had been discovered in one of the world's most important pipelines: The Forties Pipeline System. The pipeline has been shut down for an estimated two-week repair. In response, Apache (APA) has suspended operations at its nearby Forties field. Then today Bloomberg reported an explosion at a natural gas hub in Austria. The Austrian terminal is one of the main points where natural gas from Russia enters Europe.
Actionable Conclusions (1-10): Brokers Estimate 53.3% To 123.65% Net Gains For Ten Wall St. Favored Stocks By Yield To December 2018
Four of ten top Wall St. Favorites by yield were among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart listing below). So, the yield-based forecast for Wall St. Target Favorites, as graded by Wall St., was 40% accurate.
Ten probable profit-generating trades revealed in YCharts for December 2018 were:
Advanced Emissions (ADES) was projected to net $1,236.53, based on a single target estimate from one analyst, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 172% more than the market as a whole.
Salem Media Group (SALM) netted... more
AG Mortgage Investment Trust Inc. (MITT) is a high-yield income vehicle in the mortgage REIT sector with an appealing dividend yield, on first glance. While the yield is enticing, there's a considerable risk that the mortgage REIT will cut its dividend again. AG Mortgage Investment Trust reduced its payout in the past, which shines the light on how risky an investment is.
When it comes mortgage REITs, it's not all just about a high yield, even though a lot of income investors seem to think it is. Mortgage REITs with high dividend yields are tempting for sure, often luring investors into buying them purely because of yield considerations. That said, dividend sustainability, past history of positive or negative dividend growth, and valuation are all aspects that income... more
The Cheesecake Factory (CAKE) has been challenged in 2017 to maintain its multi-year winning streak of uninterrupted growth – in terms of both comparable sales and operating profits. As with other casual dining chains and the restaurant industry overall, the company continues to face headwinds on both the demand and the cost sides of the equation.
Yet even as challenging industry dynamics are unlikely to soon lift, The Cheesecake Factory has numerous advantages that should enable it to continue to fundamentally outperform peers into 2018 and beyond. Here I explain why I am now adding to existing holdings of this solid dividend-growth name.
Growing From CAKE’s Strong Base Perhaps the company’s most distinguishing feature is the intense activity within the... more
The Stock - Home Depot, Inc. (NYSE: HD): My wife and I recently purchased our first house. When we purchased the house, we knew that it was going to need a lot of updating. Between painting every inch of the house, changing light fixtures, and hardware, hardware, I was making what felt like daily trips to Home Depot. Since I was contributing so much to the company's bottom line, I one day thought that I should perform a stock analysis over the company to see if the company fits our investing metrics. Why not try to invest in a company that you are supporting regularly if the metrics are right?
The company has had a couple of SEC filings in the last month that have caught my attention. First, the company reported earnings in the middle of November and announced strong results.... more