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+--- Thread: Buy and hold FOREVER! (/showthread.php?tid=453)
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RE: Buy and hold FOREVER! - Concasto - 03-20-2014
WM/RSG - Waste management companies will always be in demand. These two may be out of business one day due to management mistakes, but the industry will only grow as more and more people enter the middle class and consumption grows.
RE: Buy and hold FOREVER! - Dividend Watcher - 03-20-2014
(03-20-2014, 10:15 PM)Concasto Wrote: WM/RSG - Waste management companies will always be in demand. These two may be out of business one day due to management mistakes, but the industry will only grow as more and more people enter the middle class and consumption grows.
In theory it makes perfect sense, Concasto. At least around here, Waste Management is a small cog in the trash field. There a hundreds of "family" and small closely-held corporate regional trash companies around not to mention many municipalities still providing trash services. Part of my family has been in the trash field for 3 generations. Often, they'll build the business up, sell out to WM or one of the regionals for a very good price and then a few years later go right back into the business in competition with their previous companies.
WM is dealing with a high debt load, slow growth and a high dividend payout ratio. Couldn't tell you about RSG since I know nothing about it. If you're thinking of investing, I'd make sure you had a good margin of safety.
In addition, many CEOs and analysts have talked about the bifurcation of the income levels with both P&G and KRFT lately specifically talking about the challenges of the barbell consumption patterns. The "middle class" growth has slowed versus high and low income classes for the last few years. I'm sure this can change over time but it may take a long time.
I looked at WM for a while but shied away for now. I wouldn't call it a "forever" stock without some higher growth unless you needed the higher yield but slower growth to boost your income.
RE: Buy and hold FOREVER! - rnsmth - 03-21-2014
I sold WM over a year ago
RE: Buy and hold FOREVER! - Concasto - 03-21-2014
(03-20-2014, 11:46 PM)Dividend Watcher Wrote:(03-20-2014, 10:15 PM)Concasto Wrote: WM/RSG - Waste management companies will always be in demand. These two may be out of business one day due to management mistakes, but the industry will only grow as more and more people enter the middle class and consumption grows.
In theory it makes perfect sense, Concasto. At least around here, Waste Management is a small cog in the trash field. There a hundreds of "family" and small closely-held corporate regional trash companies around not to mention many municipalities still providing trash services. Part of my family has been in the trash field for 3 generations. Often, they'll build the business up, sell out to WM or one of the regionals for a very good price and then a few years later go right back into the business in competition with their previous companies.
WM is dealing with a high debt load, slow growth and a high dividend payout ratio. Couldn't tell you about RSG since I know nothing about it. If you're thinking of investing, I'd make sure you had a good margin of safety.
In addition, many CEOs and analysts have talked about the bifurcation of the income levels with both P&G and KRFT lately specifically talking about the challenges of the barbell consumption patterns. The "middle class" growth has slowed versus high and low income classes for the last few years. I'm sure this can change over time but it may take a long time.
I looked at WM for a while but shied away for now. I wouldn't call it a "forever" stock without some higher growth unless you needed the higher yield but slower growth to boost your income.
Very interesting, thanks.
What are some good debt measurements you guys like to look at for a long term buy? Debt/equity, debt/income etc
When I look at the debt/equity ratios of many stocks it doesn't make sense. In this case it appears equity does not equal book value. Anyone have an idea?
RE: Buy and hold FOREVER! - EricL - 03-21-2014
Waste Management's CAGR for dividend growth trend.
1 YR = 2.8%
3 YR = 5.0%
5 YR = 6.2%
10 YR = 64.6%
Current payout ratio = 65%
Analyst estimates are for a 7% EPS growth rate over the next 5 years, which is suspect to me as estimates have come down for both 2014 and 2015 over the last 60 days and the growth rate over the last 5 years has been just 2.6%.
You could do worse with a 3.6% payout, but if I'm looking for that slow of growth I'd park it in VZ, T or a utility and pick up an extra 1-2% yield.
RE: Buy and hold FOREVER! - Dividend Gamer - 03-27-2014
I was just talking about a lot of these same ideas(and companies, WM, RSG) in my previous posts.
I am a huge proponent of the buy and hold forever idea. But it cannot be too literal. You have to be able to evaluate what you are invested in, do not stick your head in the sand or hold too dearly to any stock and develop an emotional or irrational attachment.
I will admit to being a very positive optimist, which I can attribute a great deal to my young age(26), and youthful zeal.
I also love all of this finance stuff, and want to spend my entire life trying to help reach and teach as many people as possible about the virtues and benefits that investing can provide.
Too many of friends and acquaints around my age are just churning away on the hedonic treadmill of conspicuous consumption and rampant consumerism.
I have recently been getting interested in stoic ideals and philosophies, which is giving some new thoughts and perspectives. It dovetails nicely with dividend oriented investing.