Possible CSCO replacements

[rnsmth]

As I have written, I have been doing some looking at alternatives to CSCO if it remains a laggard in its dividend increase coming up in early 2022, probably announced in Feb. if they keep the same schedule they did last year. Some folks have made the case that one should be patrient with CSCO, and it is a credible case. Nonetheless, in a continuation of the work of looking at what I might choose to do if I liquidated CSCO.  

Here are some data on the comparisons, made on the assumption that I would split the proceeds of my overweight CSCO position 4 ways, 1/4th of the proceeds into each  

Ticker followed by current yield, most recent dividend increase and SSD safety score

CSCO, 2.53%, 2.8%, 91

SNA, 2,66%, 15%. 99
LMT, 3.24%, 7,7%, 84 
WEC. 3.06%, 7.4%, 87
RY, 3.76%, 11%, 80

If I chose this path, the dividend of those four combined would be roughly 20-25% higher than that of CSCO, depending in part on exactly how many shares of each that 1/4th of the CSCO position would buy.

That would not be as big a deal as it might sound like. CSCO currently provideds 2.7% of our portfolio income.  

Anyway, that is as far as I have gone so far. LMT and WEC are current positions. SNA and RY would be new positions.

[ken-do-nim]

I don't quite follow what you're after; but here is a good article on Cisco competitors: https://www.astrogrowth.com/blog/cisco/. I don't think a lot of them pay a dividend, but JNPR, IBM and AVGO are on the list. Juniper Networks (2.38% yield) looks like the closest replacement if you're looking for a similar company.

[rnsmth]

I am not after CSCO competitors. I would be after mid-yield, faster dividend growth companies. I am sector agnostic in regard to this.

[ken-do-nim]

(12-14-2021, 11:27 AM)rnsmth Wrote: I am not after CSCO competitors.  I would be after mid-yield, faster dividend growth companies.  I am sector agnostic in regard to this.

Check out BX Blackstone.  3.23% yield, 102.10% growth year-to-date, P/E 17.48

[crimsonghost747]

I do not hold CSCO so I can't really comment on that part of the trade.

Nor do I know SNA. But I do like WEC/LMT/RY.
You did mention that you don't have RY, do you have any Canadian banks? If not then I would indeed recommend grabbing one, it doesn't get much better when it comes to dividend safety in the financial sector. And with interest rates finally starting to go up banks should profit nicely from that.

JNJ/PEP also both at the 2.5% mark, if that is high enough for you then I can't see how it could go wrong long-term with either of these.

Looks like you could pretty easily indeed get both more dividends right now and higher dividend growth without taking on much, if any, additional risk.
There is always the option of not selling all of your CSCO, you could leave half and move the other half to a mix of better div payers / higher div growers according to your preference.

[rnsmth]

(12-14-2021, 11:30 AM)ken-do-nim Wrote:

(12-14-2021, 11:27 AM)rnsmth Wrote: I am not after CSCO competitors.  I would be after mid-yield, faster dividend growth companies.  I am sector agnostic in regard to this.

Check out BX Blackstone.  3.23% yield, 102.10% growth year-to-date, P/E 17.48Ti

Your numbers are not current  BX current yield is 2.83% and it has a Borderline Safe SSD dividend safety rating.
Its dividend payments have been erratic over the past 6 years or so and has a negative 5 year dividend growth rating.  
There may be an explanation to that, but with the DSS score of 41, I am not going to spend time running it down.
All data from SSD.  Their data provider is S&P.

[rnsmth]

(12-14-2021, 01:30 PM)crimsonghost747 Wrote: I do not hold CSCO so I can't really comment on that part of the trade.

Nor do I know SNA. But I do like WEC/LMT/RY.
You did mention that you don't have RY, do you have any Canadian banks? If not then I would indeed recommend grabbing one, it doesn't get much better when it comes to dividend safety in the financial sector. And with interest rates finally starting to go up banks should profit nicely from that.

JNJ/PEP also both at the 2.5% mark, if that is high enough for you then I can't see how it could go wrong long-term with either of these.

Looks like you could pretty easily indeed get both more dividends right now and higher dividend growth without taking on much, if any, additional risk.
There is always the option of not selling all of your CSCO, you could leave half and move the other half to a mix of better div payers / higher div growers according to your preference.

I own two Canadian banks, CM and TD.  I also own JNJ and PEP and do not need any more of them.  Their dividend growth is nothing to party about, but they are solid, core companies in our account.

Thanks

[crimsonghost747]

(12-14-2021, 02:46 PM)rnsmth Wrote:

(12-14-2021, 01:30 PM)crimsonghost747 Wrote: I do not hold CSCO so I can't really comment on that part of the trade.

Nor do I know SNA. But I do like WEC/LMT/RY.
You did mention that you don't have RY, do you have any Canadian banks? If not then I would indeed recommend grabbing one, it doesn't get much better when it comes to dividend safety in the financial sector. And with interest rates finally starting to go up banks should profit nicely from that.

JNJ/PEP also both at the 2.5% mark, if that is high enough for you then I can't see how it could go wrong long-term with either of these.

Looks like you could pretty easily indeed get both more dividends right now and higher dividend growth without taking on much, if any, additional risk.
There is always the option of not selling all of your CSCO, you could leave half and move the other half to a mix of better div payers / higher div growers according to your preference.

I own two Canadian banks, CM and TD.  I also own JNJ and PEP and do not need any more of them.  Their dividend growth is nothing to party about, but they are solid, core companies in our account.

Thanks

Good choices there, I also chose CM and TD for my portfolio. CM has been there forever, TD is a newer addition. 
Hmm.. trying to think of some other options here. From what I understand you are looking for something with their yield still in the 2%+ range? 

BIP has a good mix of yield and growth. It's a bit complicated though and I'm not sure if you need to consider tax stuff as I believe they are domiciled in Bermuda or another one of those tiny islands. But it is a great company.

I think you are in a good position, since with what you have now you could probably even add a growthier stock into the mix and still come out with more yield than what CSCO is giving you. Again, I don't know CSCO well enough to comment on the thought of selling it, but if you can grab a higher current yield and higher expected dividend growth then that does sound like a win-win situation.

[rnsmth]

(12-14-2021, 04:29 PM)crimsonghost747 Wrote:

(12-14-2021, 02:46 PM)rnsmth Wrote:

(12-14-2021, 01:30 PM)crimsonghost747 Wrote: I do not hold CSCO so I can't really comment on that part of the trade.

Nor do I know SNA. But I do like WEC/LMT/RY.
You did mention that you don't have RY, do you have any Canadian banks? If not then I would indeed recommend grabbing one, it doesn't get much better when it comes to dividend safety in the financial sector. And with interest rates finally starting to go up banks should profit nicely from that.

JNJ/PEP also both at the 2.5% mark, if that is high enough for you then I can't see how it could go wrong long-term with either of these.

Looks like you could pretty easily indeed get both more dividends right now and higher dividend growth without taking on much, if any, additional risk.
There is always the option of not selling all of your CSCO, you could leave half and move the other half to a mix of better div payers / higher div growers according to your preference.

I own two Canadian banks, CM and TD.  I also own JNJ and PEP and do not need any more of them.  Their dividend growth is nothing to party about, but they are solid, core companies in our account.

Thanks

Good choices there, I also chose CM and TD for my portfolio. CM has been there forever, TD is a newer addition. 
Hmm.. trying to think of some other options here. From what I understand you are looking for something with their yield still in the 2%+ range? 

BIP has a good mix of yield and growth. It's a bit complicated though and I'm not sure if you need to consider tax stuff as I believe they are domiciled in Bermuda or another one of those tiny islands. But it is a great company.

I think you are in a good position, since with what you have now you could probably even add a growthier stock into the mix and still come out with more yield than what CSCO is giving you. Again, I don't know CSCO well enough to comment on the thought of selling it, but if you can grab a higher current yield and higher expected dividend growth then that does sound like a win-win situation.

My sweet spot, as I call it, are mid yield (2.5% to 4%) with average to fast dividend growth - say 5% to 12%+ annually)

I fund this, as there is no new money going into the accont, though holdings in higher yield companies, like VZ, ENB, TU, GILD, PBA, KMI and 4 small positions in CEFs,  for example.  The other way I do is by trimming or selling positions to raise money for sweet spot buys.  Recently I sold MDU (3% yield, low growth) and used the proceeds to buy EOG.  

I am not dripping any companies.  I accumulate all the dividends and decide where to deploy them.  2021 has pretty much the year of SCHD.  It is ending the year with about a 2.9% yield and a 10.8% dividend growth for 2021 over 2020 and is not our 3rd largest position at 5.6% of our combined portfolios.  

As I continue to do this, the higher yield portion of our portfolios become a smaller proportion of them.  Dividend growth increases and everyone is happy.

[rnsmth]

Here is something I wrote on SA a month ago that illustrates what I am doing portfolio wise these days

just saw a graphic on the screen on CNBC that showed the five worst Dow stock performers in the past year. They are (worst to less worse):
VZ, AMGN, BA, V, WMT
+++
I own VZ among those and I replied, writing, "I own VZ. I enjoy reinvesting the oversized and Very Safe dividends into mid-yield, higher dividend growth equities and a fund."

So I took a look at our portfolio from a different angle. 14 our 26 positions are above what I would call mid-yield today. Twelve are in what I would call mid-yield: 3.26% to 2.34%. Not all of those are higher dividend growth. In fact, the two Canadian banks have not increased for a year or more, but their regulators just gave them the go-ahead, so I am confident they will resume high single digit to low double digit increases in 2022.

The higher yielding ones start with a current yield of 3.93% and go up from there. They account for almost 65% of our portfolio income at the current time.

Here are the mid-yield ones - ticker followed by current yield followed by SSD dividend safety scores.

TD 3.29% 80
LMT 3.26% 84
UGI 3.07% 99
WEC 2.99% 87
MDU 2.97% 92
SCHD 2.83% ETF
DLR 2.79% 94
CSCO 2.66% 91
JNJ 2.65% 99
PEP 2.53% 93
TXN 2.38% 90
PG 2.34% 99

Now, not all of these have Fast 5 year DGRs, but they are all faster than that of VZ.

Over time, slowly but surely, as I selectively reinvest acccumulated dividends into mid-yield stocks, their share of our portfolio income will increase. That is the plan, anyway.

SSD scores, of course, are the current dividend safety scores from Simply Safew Dividends.

[ken-do-nim]

(12-14-2021, 02:43 PM)rnsmth Wrote:

(12-14-2021, 11:30 AM)ken-do-nim Wrote:

(12-14-2021, 11:27 AM)rnsmth Wrote: I am not after CSCO competitors.  I would be after mid-yield, faster dividend growth companies.  I am sector agnostic in regard to this.

Check out BX Blackstone.  3.23% yield, 102.10% growth year-to-date, P/E 17.48Ti

Your numbers are not current  BX current yield is 2.83% and it has a Borderline Safe SSD dividend safety rating.
Its dividend payments have been erratic over the past 6 years or so and has a negative 5 year dividend growth rating.  
There may be an explanation to that, but with the DSS score of 41, I am not going to spend time running it down.
All data from SSD.  Their data provider is S&P.

Ah, I've just been using google search for quick quote checks.  I see that yahoo finance has the correct numbers.

[rnsmth]

(12-15-2021, 07:45 AM)ken-do-nim Wrote:

(12-14-2021, 02:43 PM)rnsmth Wrote:

(12-14-2021, 11:30 AM)ken-do-nim Wrote:

(12-14-2021, 11:27 AM)rnsmth Wrote: I am not after CSCO competitors.  I would be after mid-yield, faster dividend growth companies.  I am sector agnostic in regard to this.

Check out BX Blackstone.  3.23% yield, 102.10% growth year-to-date, P/E 17.48Ti

Your numbers are not current  BX current yield is 2.83% and it has a Borderline Safe SSD dividend safety rating.
Its dividend payments have been erratic over the past 6 years or so and has a negative 5 year dividend growth rating.  
There may be an explanation to that, but with the DSS score of 41, I am not going to spend time running it down.
All data from SSD.  Their data provider is S&P.

Ah, I've just been using google search for quick quote checks.  I see that yahoo finance has the correct numbers.

Ah.  It has been a long time since I have used google for anything, or been to the Yahoo finance site.