Is American Electric Power's Dividend Safe?
Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash... more
Appetite For US High Yield Bonds Remains High As Yields Tighten
High yield bond ETFs concentrate on lower quality corporate bonds, which are considered riskier than higher-quality or more established companies. Because of this higher level of risk, high-yield bonds, also known as junk bonds, offer higher yields to investors. US high yield bond ETFs invest at least 65% of capital in binds that are not rated or are rated by S&P or Moody's at or below BB (considered speculative). Because of high returns and the potential for diversification across many markets, regions, and industries, high yield bonds are a major part of many investment strategies. We track asset class movement and you can see here the fixed income table which is updated weekly. Assets Class Symbols 05/06 ... more
Is Computer Sciences' Dividend Safe?
Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash... more
47 Million Reasons to Buy These 5 Dividend Stocks
If so, you're likely one of the 47.5 million people who currently depend on Medicare for either all or a portion of their medical expenses. Unfortunately, the trustees of the Medicare trust fund just released some information that could rearrange the way you think about your finances. Read on and I'll tell you why the road to retirement may not be as smooth as you had imagine, and then I'll give you five great stocks you can buy -- today. The bad news keeps comingIt's true that after the terrible financial collapse of 2008, the market bounced back resiliently. Saving accounts have been increased, 401(k) balances restored, and company matching gotten back on the right track.... more
Top 10 Tech Stocks for the Dividend Growth Investor
Technology stocks have historically been thought of as growth stocks. In truth, the majority of technology stocks have been quite cyclical. But most importantly, technology has not been thought of as a dividend growth sector, until recently that is. As the technology sector has matured, from the start up, new industry, fast growth phase of their business evolutions, the nature of their business models and attitude toward shareholders has matured and evolved as well. Many technology stocks, including some of the biggest and best-known have instituted dividend policies in recent years. Consequently, this industry, once thought of as a pure growth industry, is rapidly morphing into a dividend growth story. Since technology stocks behaving as dividend growth stocks is such a new phenomenon,... more
Is Colgate-Palmolive's Dividend Safe?
Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash flow per... more
Is Tim Hortons' Dividend Safe?
Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash... more
Is Timken's Dividend Safe?
Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash... more
Income Investors: Owning Dividend ETFs vs. the 'Real Thing'
“The Real Thing” was once a slogan for Coca-Cola (KO), which is among the “Dividend Aristocrats,” companies with a rich history of raising dividend payments. And Coca-Cola is one of the stocks I picked to compare the performance of 7 individual “real” stocks against owning two widely held ETFs that emphasize dividend-paying equities. One of these ETFs that comes to mind is the S&P Dividend ETF (SDY). It tracks the S&P High Yield Dividend Aristocrats Index, which is weighted (subject to some limits) by “indicated annual dividend yield.” And there’s another widely held ETF from iShares, the Dow Jones Select Dividend Index Fund (DVY). It tracks a similar group of stocks, also using a dividend-weighted approach. But should income investors buy shares in these ETFs... more
The Most Promising Dividends in Motion Pictures
Yields and growth rates and payout ratios, oh my! Before we get to those companies, though, you should understand just why you'd want to own dividend payers. These stocks can contribute a huge chunk of growth to your portfolio in good times, and bolster it during market downturns. As my colleague Matt Koppenheffer has noted: "Between 2000 and 2009, the average dividend-adjusted return on stocks with market caps above $5 billion and a trailing yield of 2.5% or better was a whopping 114%. Compare that to a 19% drop for the S&P 500."... more