Dividend Growth Forum

A couple more rate hikes are all but certain.  I was concerned the last one was going to knock the low DIV utilities like XEL down.  Get short bonds yielding much over 3% and there is just no need for anybody but a long-term investor to take the risk.  I've read articles that say the hedge fund managers are hiding in Utes the past few months after dumping tech.  That is probably the reason they are doing so well in the face on interest rate hikes.

And MO needed some good news. They've had a bad year.

(11-28-2018, 06:12 PM)vbin Wrote: [ -> ]Although Powell seems to be taking cautionary steps with increase in interest rates(there could be multiple reasons at play) but lower interest rates in current situation doesn't seem plausible. Interest rates will have to be increased sooner or later. Too late can actually hurt the currency and inflation control efforts and have much more serious consequences in longer run.

On a different note, anyone looking at SJM would appreciate some insights.

I bought SJM last year and doubled it on the dip now, it is still a relatively small position. I don't know the brand too well and I did not take a deep-deep look. Numbers look good, despite the fall in share price the top and bottom line both ncreased, yes, the guidance was lowered, so what. FCF payout is around 40% which is very good, div growth rate is great. The valuation is so-so, not something to get excited about, I think the current price is more or less fair.
The long term debt level is something I noticed, but given the powerful FCF I'm not too worried.
I think it's a nice one to have in a divi growth portfolio, but not with a large weight.

(11-28-2018, 05:31 PM)divmenow Wrote: [ -> ]MO great news after the bell.  Report They will be taking a minority stake in  Juul. Congrats to all those who bought low.

I'm initially lukewarm about this news (although I admit I haven't looked into it in any great detail).

I don't think that 'vaping' is a moaty business at all, it appears very competitive where consumers fave very low switching costs and competition drives discounting.

I have read about the alleged superiority of the product, the use of salts and the HUGE 75% market share - but remain unconvinced.

Vaping margins are far thinner than traditional cigarettes and I expect any margin to be competed away to the cost of capital in this commoditised industry moving forward.

It's great that MO are 'hedging' their bets but I'll have to await more details on the deal before making a judgement. Let's hope they didn't overpay!

(11-29-2018, 04:16 AM)DividendDragon Wrote: [ -> ]

(11-28-2018, 05:31 PM)divmenow Wrote: [ -> ]MO great news after the bell.  Report They will be taking a minority stake in  Juul. Congrats to all those who bought low.

I'm initially lukewarm about this news (although I admit I haven't looked into it in any great detail).

I don't think that 'vaping' is a moaty business at all, it appears very competitive where consumers fave very low switching costs and competition drives discounting.

I have read about the alleged superiority of the product, the use of salts and the HUGE 75% market share - but remain unconvinced.

Vaping margins are far thinner than traditional cigarettes and I expect any margin to be competed away to the cost of capital in this commoditised industry moving forward.

It's great that MO are 'hedging' their bets but I'll have to await more details on the deal before making a judgement. Let's hope they didn't overpay!

As a MO shareholder, I like the news. Vaping is one of the few areas of growth in the domestic U.S. tobacco industry, and MO is grabbing a foothold in one of the biggest players in that market. Also, once the federal prohibition on cannabis comes to an end, I suspect Juul pods will be one of the primary delivery mechanisms.

As you say, though, the price they paid relative to the value of Juul stake received is critical information we don't have. Valuation is important.

JUUL has taken a beating from FDA lately due to their kiddie flavored vaping products. The FDA wildcard they all deal with forever. I hate these pre-announced big buy ins. The chance of an attractive price is seems unlikely.

Bought some VPU today which is a Vanguard Utilities ETF with a 3 1/2% DIV. Top 10 holdings include most of the forum favorite utes.

Sold out of all airlines, interest rates will keep going up more than where they are now and if oil starts going up airlines will get hit.

(11-29-2018, 10:41 AM)fenders53 Wrote: [ -> ]JUUL has taken a beating from FDA lately due to their kiddie flavored vaping products.  The FDA wildcard they all deal with forever.  I hate these pre-announced big buy ins.  The chance of an attractive price is seems unlikely.  

Bought some VPU today which is a Vanguard Utilities ETF with a 3 1/2% DIV.  Top 10 holdings include most of the forum favorite utes.

Why not just buy XLU? Same holdings and much cheaper price. Its has a 3.38 yield as well

(11-29-2018, 05:23 PM)divmenow Wrote: [ -> ]

(11-29-2018, 10:41 AM)fenders53 Wrote: [ -> ]JUUL has taken a beating from FDA lately due to their kiddie flavored vaping products.  The FDA wildcard they all deal with forever.  I hate these pre-announced big buy ins.  The chance of an attractive price is seems unlikely.  

Bought some VPU today which is a Vanguard Utilities ETF with a 3 1/2% DIV.  Top 10 holdings include most of the forum favorite utes.

Why not just buy XLU? Same holdings and much cheaper price. Its has a 3.38 yield as well

They are virtually the same thing to my knowledge.  VPU is an attempt to emulate the index as well.  VPU has a 4 star Morningstar rating.  It's a decent ETF.  But the real answer to your question is the bulk of my brokerage holdings are in my Vanguard account.  I have positions in a half dozen ETFs like Utes, health, DIV Growth etc.  If I want to make 27 small purchases a day, I can, with no commissions.  I don't do that of course, but I have been known to break trades up small when the market is flying all over the place.   

On a side note, the Utes we both like outperform the index, so that is my primary target.  This is to make sure I have more ute exposure while my put game proceeds.

I prefer individual stocks over ETFs, but I think for those that don’t want to risk it too much then ETFs, just like mutual funds, are the way to go. Nice to get instant diversification.


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(11-30-2018, 01:29 AM)dhcruz67 Wrote: [ -> ]I prefer individual stocks over ETFs, but I think for those that don’t want to risk it too much then ETFs, just like mutual funds, are the way to go. Nice to get instant diversification.


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We should really start more threads around here instead of blowing this one up.    I think a half dozen of us would participate.  

ETFs have their place.  Not that anyone asked, but I currently have two mutual funds that are equity index funds.  A half dozen ETFS.  10-12 stocks I intend to hold long-term, a couple stocks I swing trade, and I almost always have 10+ option contracts open (option sales ONLY for me).   I can trade mutuals and ETFs for free so that effects my decision on the ETF matter.  They do offer diversification but you can lose money like a champion just the same. An ETF is no safer than a properly constructed individual stock portfolio.  I struggle to find 30 great individual stock ideas so the ETFs help me gain access to some sectors I believe in longterm.  

I'd like to have more individual stocks but not sure I could keep proper track of them.   It's a damn short list of companies I am comfortable with a buy and completely ignore strategy.  AAPL, JNJ, UTES etc.

Added to my positions in ENB, KMB, MO, and ORI this morning.

SLB still in free fall mode. Can't believe this stock is at $44 now. No position yet but thinking of buying at these levels. Yield now at 4.16%. Any of you guys own it, or thinking of buying?