(07-11-2014, 10:02 AM)EricL Wrote: [ -> ]I think AT&T is a great value here at a 5.2% yield and I think the Direct TV merger and new product cycle from Apple will help its growth and hopefully provide upside to the dividend payout.
Fairly valued here, IMO. The slow earnings & dividend growth aren't anything to write home about but they're not going anywhere. However, every 3 months, they throw a good chunk of money at me and if you reinvest that helps with the slow dividend growth.
There's a lot of potential there if the greedy bureaucracy would get out of the way -- DirectTV, Uverse, wireless, etc.
(07-11-2014, 10:14 AM)Dividend Watcher Wrote: [ -> ] (07-11-2014, 10:02 AM)EricL Wrote: [ -> ]I think AT&T is a great value here at a 5.2% yield and I think the Direct TV merger and new product cycle from Apple will help its growth and hopefully provide upside to the dividend payout.
Fairly valued here, IMO. The slow earnings & dividend growth aren't anything to write home about but they're not going anywhere. However, every 3 months, they throw a good chunk of money at me and if you reinvest that helps with the slow dividend growth.
There's a lot of potential there if the greedy bureaucracy would get out of the way -- DirectTV, Uverse, wireless, etc.
With the Direct TV acquisition I think it will add some more breathing room to the payout ratio and possibly allow for more like 4-5% dividend growth going forward.
If it can deliver 5% earnings growth at a fairly valued earnings multiple and I get to start with a 5.2% dividend yield, I think its about as sure a thing as an 8-10% total return as you can get. I'll take it in this market.
Much more predictable results than Potash gave me with them being reliant on a volatile fertilizer market for earnings.
I'm watching Lorillard and hoping a deal gets announced next week for around $70 per share. Would love to be able to sell out there, take the proceeds and start a position in a higher yielding utility.
Have also been doing some soul searching on Aflac. I think the high growth days are over in the near term as Japan slogs along and interest rates stay low. I think there are more certain LYHG stocks out there that can give me a better growth on a 2.4% yield.
(07-11-2014, 10:27 AM)EricL Wrote: [ -> ]Have also been doing some soul searching on Aflac. I think the high growth days are over in the near term as Japan slogs along and interest rates stay low. I think there are more certain LYHG stocks out there that can give me a better growth on a 2.4% yield.
Try using this tool to search for candidates in the CCC list:
http://dividendandwhisky.com/dividend-screener/
(07-14-2014, 10:24 PM)Be Here Now Wrote: [ -> ] (07-11-2014, 10:27 AM)EricL Wrote: [ -> ]Have also been doing some soul searching on Aflac. I think the high growth days are over in the near term as Japan slogs along and interest rates stay low. I think there are more certain LYHG stocks out there that can give me a better growth on a 2.4% yield.
Try using this tool to search for candidates in the CCC list: http://dividendandwhisky.com/dividend-screener/
I saw that screener a week or two ago, pretty awesome little tool!
Here is a link to my
portfolio update on Seeking Alpha.
Will likely be another move in the next couple of days as Lorillard/Reynolds announced their merger this morning. LO sold off hard and is about 10% below the merger price so I think I will hold off and let the dust settle a bit before selling my shares. I own RAI in another account and rather than waiting for the merger to finalize I plan on selling my position and re-directing the cash. I'm leaning towards buying another utility for the portfolio.
(07-15-2014, 08:50 AM)EricL Wrote: [ -> ]Here is a link to my portfolio update on Seeking Alpha.
Will likely be another move in the next couple of days as Lorillard/Reynolds announced their merger this morning. LO sold off hard and is about 10% below the merger price so I think I will hold off and let the dust settle a bit before selling my shares. I own RAI in another account and rather than waiting for the merger to finalize I plan on selling my position and re-directing the cash. I'm leaning towards buying another utility for the portfolio.
You have a large portfolio, and since you are obviously young and have children you need to spend quality time with, I simply wonder where you get the time for your due diligence. When I was in the working world I had zero time even though I had no small children at home.
I commented on your article with some concerns about IBM. Hopefully others will chime in and you can get more feedback.
If you can wait for a good price for MO, I recommend starting a position. MO has some characteristics to its price action that make buying opportunities fairly easy to recognize. Now is not the time.
(07-15-2014, 02:46 PM)Be Here Now Wrote: [ -> ] (07-15-2014, 08:50 AM)EricL Wrote: [ -> ]Here is a link to my portfolio update on Seeking Alpha.
Will likely be another move in the next couple of days as Lorillard/Reynolds announced their merger this morning. LO sold off hard and is about 10% below the merger price so I think I will hold off and let the dust settle a bit before selling my shares. I own RAI in another account and rather than waiting for the merger to finalize I plan on selling my position and re-directing the cash. I'm leaning towards buying another utility for the portfolio.
You have a large portfolio, and since you are obviously young and have children you need to spend quality time with, I simply wonder where you get the time for your due diligence. When I was in the working world I had zero time even though I had no small children at home.
I commented on your article with some concerns about IBM. Hopefully others will chime in and you can get more feedback.
If you can wait for a good price for MO, I recommend starting a position. MO has some characteristics to its price action that make buying opportunities fairly easy to recognize. Now is not the time.
I am a night owl, so most of my research and reading is done at night after my wife and kids are in bed.
Personally, I think the concerns over IBM are overblown. They have been selling off pieces of the hardware business to focus more on the services and software segments, which are higher margins. This has caused revenue growth to stagnate, but earnings and cash flow are still pretty strong. With a low payout ratio the dividend should continue to grow and the current cheap valuation will allow them to retire a lot of shares at discounted prices.
You said that revenues have decreased by roughly 4% over the last 5 years, but during that time the earnings have doubled from $8.93 to an estimated $17.90 this year and dividends have more than doubled from $1.90 to $4.40. While revenues may be important, I don't have much concern with a 4% drop in revenues while the other metrics that are more important to me are continuing to rise.
If I'm wrong, the stock is just 2.7% of my portfolio. If I'm right, there should be considerable long term capital gains as the stock return to its historical earnings multiple.
I own MO in
another account, I paid $35.15 for it last August and am happy with the results so far.
(07-15-2014, 08:50 AM)EricL Wrote: [ -> ]Will likely be another move in the next couple of days as Lorillard/Reynolds announced their merger this morning. LO sold off hard and is about 10% below the merger price so I think I will hold off and let the dust settle a bit before selling my shares.
I was wondering the logic of beating the stock to a 10% discount of the merger price. I'm guessing the divestiture of the blu e-cig line and some of RAI's lines are causing people to think they won't be making it in the long term. RAI's e-cigs just don't have the marketing muscle that blu had over the last couple years. Maybe they'll ramp that up. It's new but I thought they'd be beating the bushes to build up anticipation -- especially since they've been planning this for a while. Buyouts/mergers don't happen overnight nor in a vacuum.
I too will hold until it gets closer to the buyout price, probably over $65 or $66, and then sell. I'm not really seeing the synergies here yet and will redirect the money elsewhere. I'm looking at MO or PM and possibly adding to my REIT exposure. Of course, this could all change as more details and management's strategy gets more delineated.
The arbs must be all over this.
Recent trades are that I sold out of my Lorillard position and began a new position in Kinder Morgan Inc. (KMI) at $37.75, providing a 5.3% forward yield based on the announced $2.00 dividend for 2015.
Earlier today I bought 18 shares of Mattel (MAT) to add to my position. I bought at $34.85 which is just off the 52 week low and yields 4.36% at the current payout.
I did a little portfolio shuffling today.
Sold CLX
Sold AFL
Bought AMP
Bought TUP
Clorox I sold because I felt that it was getting well past fair value with the recent run-up. I think its trading about 10% above fair value and with a yield down to 3.1% I felt good about locking in my gains and increasing my yield.
Aflac I sold because of stagnating earnings and dividend growth. The company is facing tough headwinds due to demographics and a weak currency in Japan. The yield is just 2.5% and there isn't enough growth for my tastes to make up for it.
Ameriprise I bought to replace Aflac and feel that what I gave up for in yield I will more than make up for with earnings growth and capital appreciation. I give up 0.6% in yield but get a company growing at 15-20% over Aflac that was growing around 5%.
Tupperware I bought for the higher dividend yield over Clorox and for an expected double digit earnings/dividend growth. The stock also appears to be undervalued with a forward PE under 12. The stock currently yields 3.9% and management has stated a policy of a desired 50% payout ratio. With earnings projected to grow in the low double digits going forward, I expect the dividend to increase in a similar fashion.
When its all said and done I pick up 0.2% in blended yield and an uptick in earnings growth that should double from around 6% to 12%+.
Thoughts?
Eric, it seems we seem to be on similar wavelengths lately and it's getting a little eerie.
I don't own CLX but it was high on my portfolio wishlist. I was waiting for a big enough dip. With the recent runup and Icahn's playing around with the stock, it's moved down considerably on my list. I think you made a good move.
I'm still holding AFL and as of right now I plan to continue but did take it off DRIP to redirect the cash to something else. Ameriprise I've never paid attention to. Probably won't look at it now either as I have several others that interest me right now which leads to ...
... TUP. I've been seriously looking at them for a couple months now but some other shiny things kept getting in the way. Now that I've sold LO (which I see above you did a month or so ago also -- see first sentence) and have some extra cash sitting in the account, I was looking at it a little closer. Can't fault your logic. The South American headwinds and higher oil prices (hence higher resin prices) kept giving me pause. I'll be thinking about TUP more frequently now provided it doesn't run back up again.
(09-27-2014, 12:54 AM)Dividend Watcher Wrote: [ -> ]Eric, it seems we seem to be on similar wavelengths lately and it's getting a little eerie.
Hopefully that means we are both geniuses and not something else
Thanks for the comments, its good to hear others agree with my train of thoughts.
I had run across Tupperware on some screens during the initial construction of my portfolio and thought it looked interesting, then became even more intrigued after Chuck Carnevale wrote an
article about it on SA earlier this year. With the stock down about 17% from when he wrote the article and now trading at a PE of under 13 with a near 4% yield I thought it looked like a great entry point.
Over the last decade the company has grown earnings at 16.5% annually and is projected to continue growing at 12.5% going forward. In the investor presentation on their website they state the intention of maintaining a 50% payout ratio, meaning that the dividend should continue growing at a double digit rate as well. Combine that with an efficient stock buyback program that has retired about 18% of shares over the last 5 years and I think this could be a great long term hold.
I think Clorox is a great company too, but with the stretched valuation and slower growth, Tupperware should be able to provide me greater total return over the years ahead.