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07-13-2016, 11:12 PM
(This post was last modified: 07-19-2016, 03:39 PM by Dividend Watcher.)
Welcome to the MCD Owners Club, Martin. Did you get the secret handshake instructions yet?  The Hamburglar taught me. 
You're probably excited about the nice capital gains you've accrued so far. Now the fun part ... sitting in this price range for another 6 months or beyond while earnings catch up to the valuation. INTC, and now MCD, have taught me to be verrrrry patient and just collect the dividends in the meantime as long as you think company is viable. Both took time and a new CEO to put some zip back into the price action.
Of course, all bets are off if we get another market swoon but at least I can turn on the DRIPs again.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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(07-13-2016, 11:12 PM)Dividend Watcher Wrote: be verrrrry patient and just collect the dividends in the meantime as long as you think company is viable."
Basically sums up my philosophy for DGI.
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(07-13-2016, 11:12 PM)Dividend Watcher Wrote: Did you get the secret handshake instructions yet?
That's a trap question. Certainly I am not allowed to answer whether I got it or not - in public.
When I started my "dividend bussiness" last year, I thought, the local MCD would be the appropriate place for the anual shareholder meeting: conference room an table for free and catering paid from dividends - myLittleOmaha. So with respect to your question, all I can say is that I will not use the Sacred Parchment as a napkin. ( https://www.youtube.com/watch?v=HmEtR17A6ck)
Quote:Your probably excited about the nice capital gains you've accrued so far. Now the fun part ... sitting in this price range for another 6 months or beyond while earnings catch up to the valuation.
I did three valuations based on my buy price and data from 2015. 1) DCF, 2) P/E in 10 years based on EPS growth and 3) P/E in 10 years based on ROE (from growth of equity). The latter two described in "Buffettology". The tables of (2) and (3) say that the value per share will reach $122 in 2021. So if I want to become a serious DGI, all I should do is to watch the dividends rolling in?
Table (3) was a bit confusing as which numbers to use. MCD doubled debt per share and almost quartered down equity per share since 2014 (data from stockrover).
Based on equity and ROE from 2014 I will have a YOC of 14% in 2025.
Based on recent/last DGR 4.7%, the YOC in 2025 will be 5.6%
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(07-14-2016, 04:49 PM)Forticus Wrote: So with respect to your question, all I can say is that I will not use the Sacred Parchment as a napkin.
I did three valuations based on my buy price and data from 2015. 1) DCF, 2) P/E in 10 years based on EPS growth and 3) P/E in 10 years based on ROE (from growth of equity). The latter two described in "Buffettology". The tables of (2) and (3) say that the value per share will reach $122 in 2021. So if I want to become a serious DGI, all I should do is to watch the dividends rolling in?
Table (3) was a bit confusing as which numbers to use. MCD doubled debt per share and almost quartered down equity per share since 2014 (data from stockrover).
Based on equity and ROE from 2014 I will have a YOC of 14% in 2025.
Based on recent/last DGR 4.7%, the YOC in 2025 will be 5.6%
Are you asking should you hold MCD with these predictions to be considered a DGI. Mais non! If you're calculations are correct, some would sell here and take the capital gains.
Others, like me, are satisfied to just collect the dividends for now. Yes, I could give up the gains should MCD return to more "normal" valuation levels but that could be several years. Since I am working on my dividend income stream for retirement that's less than 10 years away, I'd rather either use the dividends to add to my smaller positions or add a new position. Perhaps, if the valuation took a big enough dip, I'd turn on the DRIP again and add a few more shares to my pile.
I can see a younger person taking the gains and using it for something else.
It all depends on your needs, goals and how you manage your portfolio. I don't think there's a correct answer.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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thanks
I think I have never added to a position. Always bought "full" positions", smaller "fulls" if too speculative.
So there is more work to do on my mindset. Also maybe to re-interpret stop-loss signals as add-signals.
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(07-19-2016, 04:48 AM)Forticus Wrote: I think I have never added to a position. Always bought "full" positions", smaller "fulls" if too speculative.
Keep in mind that your definition of a "full" position will grow over time as your entire portfolio grows. When I first started out many years ago, I saved up $5k and split it evenly into JNJ, WMT, AFL, KO, and CVX. At the time, $1k was a ton of money to me and I never thought I would add to the position.
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MCD keeps chugging along. The recent dividend raise to 94 cents per share didn't exactly knock my socks off, but I actually was expecting a little less.
I don't think I'd buy much at these prices with "new" money, but happy to hold my shares and reinvest the dividends.
A happy meal indeed.
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MCD is good at $100 for me.
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While I write up my annual report for the family (with absolute numbers) I like to thank you for your support with MCD and present a relative number here. The motivation to buy MCD wasn't exactly DGI. However, after two raises (three different quaterlys received), MCD turns out as the DGI flagship ;-)
So far, I didn't sell any shares. Yield on Buy was 3,5%, Yield on Cost is now 3,9%.
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(01-21-2017, 03:13 AM)Forticus Wrote: While I write up my annual report for the family (with absolute numbers) I like to thank you for your support with MCD and present a relative number here. The motivation to buy MCD wasn't exactly DGI. However, after two raises (three different quaterlys received), MCD turns out as the DGI flagship ;-)
So far, I didn't sell any shares. Yield on Buy was 3,5%, Yield on Cost is now 3,9%.
I love watching YOC increase every quarter!
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Nice investor day for MCD. Announced goal of high-single digit EPS growth, which translates to double-digit total returns with the dividend.
Not too shabby if they can do it.
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(03-01-2017, 05:12 PM)EricL Wrote: Nice investor day for MCD. Announced goal of high-single digit EPS growth, which translates to double-digit total returns with the dividend.
Not too shabby if they can do it.
Sure was. There on of the few restaurant stocks getting it right along with DPZ. Wish I had MCD but never bought when it was on sale. Too late to get in now.
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