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My next article was posted this morning. I welcome feedback if anyone has any.
The list was dominated by blue chip companies as just one small cap stock, TESS, made the list. It seems like the blue chip cash cows are un-loved right now as the hot market chases growth. I think there are some good opportunities for long term orientated investors.
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I just looked into QCOM and liked what I found so much that I'm going to start a position next week. Strong recurring revenues, high projected growth, a 20% dividend increase and a commitment to fast dividend growth, a strong cash position and no debt as of Q1/14, low payout ratio, and a reasonable valuation. In their annual meeting they actually said they plan to grow the dividend faster than earnings for several years, so I think now is the time to get in before they become a 3% yielding, slow growth blue chip.
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(03-30-2014, 04:04 PM)earthtodan Wrote: I just looked into QCOM and liked what I found so much that I'm going to start a position next week. Strong recurring revenues, high projected growth, a 20% dividend increase and a commitment to fast dividend growth, a strong cash position and no debt as of Q1/14, low payout ratio, and a reasonable valuation. In their annual meeting they actually said they plan to grow the dividend faster than earnings for several years, so I think now is the time to get in before they become a 3% yielding, slow growth blue chip.
All reasons why I took the plunge last spring. Long since last March at about $67.
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Good article, Eric.
Gives me some ideas when my INTC short call gets exercised. TESS intrigued me a while back but then let that drop with their low yield. I'm going to look again now that they've had a few more years of dividend growth under their belt.
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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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(03-31-2014, 01:24 AM)Dividend Watcher Wrote: Good article, Eric.
Gives me some ideas when my INTC short call gets exercised. TESS intrigued me a while back but then let that drop with their low yield. I'm going to look again now that they've had a few more years of dividend growth under their belt.
Thanks DW.
This is the first I've looked into TESS, I've never noticed it before on the CCC List. It seems to be a well run company in a booming field, hard to argue with how its performed the last decade. Its been added to my watch list.
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03-31-2014, 08:33 AM
(This post was last modified: 03-31-2014, 08:58 AM by earthtodan.)
I also have Intuit (INTU) on my tech watch list. I started looking into it because of TurboTax and liked what I saw. They have a short but growing dividend history, a decent balance sheet, easy coverage with a low payout ratio, fast growth, and software portfolio that is very sticky with customers and difficult to imitate. They also have a shareholder return policy, although it consists mostly of buybacks. Unfortunately I started watching it last year at $55, didn't buy, and since then it's run up to $80, so I'll wait for a big pullback before jumping in.
^ Proud new owner of 25 shares of QCOM! I bought at an all time high but I'm not gonna beat myself up about that.
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(03-31-2014, 08:33 AM)earthtodan Wrote: I also have Intuit (INTU) on my tech watch list. I started looking into it because of TurboTax and liked what I saw. They have a short but growing dividend history, a decent balance sheet, easy coverage with a low payout ratio, fast growth, and software portfolio that is very sticky with customers and difficult to imitate. They also have a shareholder return policy, although it consists mostly of buybacks. Unfortunately I started watching it last year at $55, didn't buy, and since then it's run up to $80, so I'll wait for a big pullback before jumping in.
^ Proud new owner of 25 shares of QCOM! I bought at an all time high but I'm not gonna beat myself up about that.
Took a quick look and it certainly has a great track record of growth. Will add it to my watch list as well, thanks for bringing it to my attention.
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04-16-2014, 03:58 PM
(This post was last modified: 04-16-2014, 03:59 PM by earthtodan.)
SNDK is looking really good right now. Much better valuation than INTU (although less sticky with customers, I suspect). They're growing in the enterprise cloud storage space. They just posted a huge earnings beat. They also declared their fourth consecutive dividend, so next quarter is the moment of truth for whether they intend to grow it, but the payout ratio is 10% of last year's earnings.
It's funny how some of the tech stocks look like the value plays in today's market. MSFT especially.
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(04-16-2014, 03:58 PM)earthtodan Wrote: SNDK is looking really good right now. Much better valuation than INTU (although less sticky with customers, I suspect). They're growing in the enterprise cloud storage space. They just posted a huge earnings beat. They also declared their fourth consecutive dividend, so next quarter is the moment of truth for whether they intend to grow it, but the payout ratio is 10% of last year's earnings.
It's funny how some of the tech stocks look like the value plays in today's market. MSFT especially.
I agree, big cap tech looks pretty cheap to me. Huge cash flows, large share buyback programs, attractive dividends. Some of them are actually similar to utility companies now with the recurring revenues from their products. AAPL, MSFT, CSCO, ORCL, HPQ, IBM all similar cash cows.
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Many make very good covered call plays also, giving as much as 10% per six months in contract returns. I've had running tech CC plays going on for about three years now. CSCO INTC AAPL are my current batch at about 30% portfolio weighting.
Alex
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04-16-2014, 04:51 PM
(This post was last modified: 04-16-2014, 04:52 PM by earthtodan.)
Sandisk now up 7% after hours. Wish I'd gone with my gut and chased it before earnings. But then, neither guts nor wishes have any place in investing.
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