+- Dividend Growth Forum (http://DividendGrowthForum.com)
+-- Forum: Dividend Growth Investing (http://DividendGrowthForum.com/forumdisplay.php?fid=15)
+--- Forum: Individual Dividend Growth Stocks (http://DividendGrowthForum.com/forumdisplay.php?fid=35)
+--- Thread: Best Single DG Stock RIGHT NOW (/showthread.php?tid=1160)
Pages:
1
2
RE: Best Single DG Stock RIGHT NOW - DividendDragon - 04-25-2015
Quote:(Just for fun, XOM scores a 78 in my silly system, compared to 62 for RTN and 71 for JNJ.)
Out of interest what is your 'silly system'
?
RE: Best Single DG Stock RIGHT NOW - Kerim - 04-25-2015
(04-25-2015, 11:03 AM)Lewys120 Wrote:Quote:(Just for fun, XOM scores a 78 in my silly system, compared to 62 for RTN and 71 for JNJ.)
Out of interest what is your 'silly system'
I sort of explained it in this old thread. Happy to provide more details if you're interested. It is really crude, but it scratches an itch I have. And it must be taken with a huge grain of salt.
RE: Best Single DG Stock RIGHT NOW - Dividend Watcher - 04-25-2015
(04-25-2015, 10:28 AM)Kerim Wrote: What arguments for RTN am I overlooking?
I had a pretty long reply written and then I went to answer the phone and my cat walked across the laptop and closed the window on me.
Let's see if I can reconstruct it.The P/E is a non-issue to me. The oil majors have maintained a lower P/E for the last few years because of the cyclicality of the oil market. We're experiencing that now. You would think the same could be said for the defense industry because war spending can be cyclical also. However, the threats have become more persistent the last couple decades. RTN has an immense intellectual property portfolio not only in the missile launching systems but also the radar/targeting systems as well. If the spending is not going directly to new hardware, there's a steady stream of money going towards maintenance and upgrades.
If you noticed, RTN recently put in a bid for Websense. RTN already had a cyberdefense division which you rarely hear anything about. You probably won't in the future either. The offer for Websense signalled to me that RTN was expanding in this field and it isn't just for government IT defense. Think water and power infrastructure, air traffic control, ground traffic control in big cities and the GPS system. HRS has a finger in this also.
On the other hand, demand for products from XOM will not be going away any time in the near future.
I happen to think both are fairly valued here. The deciding factor for me would be diversification and position size. I hold CVX instead of XOM and RTN. Both CVX and RTN have similar position sizes right now with CVX having a slight edge. I would lean towards more RTN right here only because of the prospects of a slightly higher dividend growth rate for the next few years.
I wouldn't argue about JNJ either but I think it's a little richer valued at this time. In 10 years from now it won't be much of a difference but over the short term it could be.
RE: Best Single DG Stock RIGHT NOW - crimsonghost747 - 04-25-2015
(04-25-2015, 10:28 AM)Kerim Wrote: What arguments for RTN am I overlooking?
My reasons for choosing RTN:
1. Missiles are a damn good business.
I can't recall the expiration time right now, but I believe it's somewhere between 10 and 15 years for most missile types. Now of course missiles are bought in big batches and stored, the oldest used first. But where I am going with this is, every single year, war or no war, a ridiculous amount of missiles will be bought simply because the old ones (in western countries at least) are used before they expire. If there is no real use then they will be shot during exercises. At the same time countries keep replenishing their storage with the new versions which are always slightly modified, win for the military and win for the company producing said missiles. RTN = number one when it comes to missiles.
2. Future systems.
I'll pack 4 things into this one. Communications, intelligence systems, cyber security and missile defence. All of those have huge potential. HUGE. RTN is heavily investing on all of them and is already pretty much the number one name when it comes to missile defence.
3. Increasing foreign sales.
One of the big issues with most defence contractors, RTN included, is the huge % of revenue coming from the USA. But obviously these big companies have the politicians on their side (I wonder why?....) so they will keep getting the contracts. What I like about RTN is that they are constantly getting new contracts from outside of the USA. Just last week Poland chose the Patriot missile defence system in a deal that could be worth up the $7 billion. Not only does it open new markets for systems maintenance/upgrades and future sales but it also lowers their exposure to changes in the US defence budget.
4. Increased instability.
Hey, sucks to say but the more people want to kill each other, the more companies like RTN will profit. The simple fact that there are risks due to general instability will already force governments to pay more attention to defensive measures. (hello my friends from #2: secure communications, intelligence, cyber security and missile defence)
In my opinion, RTN has really played it right when it comes to setting themselves up for a bright future. The only slight "miss" would be that as far as I know they aren't too active on the drone side of things, but then again I'm sure that while they don't manufacture the drones themselves there will be a lot of RTN technology in some of them. The payloads will certainly consist of many weapons manufactured by RTN.
All of the above might be slightly biased since RTN is the single biggest holding in my portfolio.
RE: Best Single DG Stock RIGHT NOW - Kerim - 07-23-2015
You RTN fans are sure having a great day today! Up 8.5 percent as I type.
RE: Best Single DG Stock RIGHT NOW - crimsonghost747 - 07-25-2015
(07-23-2015, 09:58 AM)Kerim Wrote: You RTN fans are sure having a great day today! Up 8.5 percent as I type.
Well of course I prefer lower prices so I can buy more but I guess I can't complain. But it's not like this came out of nowhere... the stock has been declining for the past few months even though there is nothing wrong with the company. This was more of a correction, right now the price is what it was towards the end of May.
And I still don't think it's expensive with a P/E in the 15-16 range.