(04-16-2014, 09:53 AM)hendi_alex Wrote: I don't own any of them, but would consider any of the 3%+ yielding issues as potential covered call plays, if the calls are rich enough. Right now GE, AAPL, and INTC are the only somewhat similar covered calls in place.
As strictly dividend investments, the DG stocks just don't have high enough yields to attract my interest. After all, $1M invested in your selection kicks out a paltry $30,000. Who can live on that? Someone says [yeah, but in 10 years they will be kicking out $60K.] My main question of that is, [ how much will that $60k buy compared to what $30K buys today?] Secondly, how safe are those projected growth rates for the next ten years?
For me, I'll continue to take a bird in the hand, skimming the market for more solid cash flow returns. When and if the big cap DG stocks move back to historically attractive p/e's, they will once again get my attention.
Here is how I view it:
I have a base of income that is more than adequate to meet our needs. That includes pensions, social security and dividend income. I am not looking to maximize dividend income, but rather am looking to increase income from dividends at a rate significantly higher than inflation from financially strong companies that have a habit of increasing their dividends on an annual basis. When combined with smaller annual increases in pensions and SS, I should be able to stay ahead of inflation for the foreseeable future. In my view, deflation remains a more immediate threat than inflation.
I own a mix of companies whose yields range from 2.1% to 11%. All of them are dividend growth stocks! The average dividend increase in 2013 was around 10%. The current yield of the mix was right at 3.9% the last time I looked, in late March.
I am meeting my goals with a fairly low risk way of going about it. Other folks have different goals and use different tactics to help them meet their goals. That adds to the variety and richness of the discussion.