Dividends and the Importance of Free Cash Flow
You have to love the GEICO commercials that run on television. Whether it is the little piggy going “wee, wee all the way home” or Randy Johnson throwing snowballs, they seem to strike our funny bone. A recent one is a spoof of the popular antique show from PBS where folks bring collectibles and have them valued. A lady brings a ceramic hand with a bird in it. The gentleman looks at her in all seriousness and announces that it is worth “two in the bush”. The lady that owns it is very happy to get that premium valuation. The US stock market has been handing out some very tough lessons to investors over the last ten years and, in our opinion, most participants are missing one of the more important of these lessons. Are you ready? A bird in the hand is worth two in the bush. For the... more
One Year Performance of Dividend Watch List Stocks
We’ve decided to revisit our watch list from one year ago to see if we can extract any valuable lessons from our "research of quality stocks at a new low" approach. The table on our site (located here) compares the performance of our dividend watch list from September 25, 2009 to September 21, 2010. Despite being at or near new 52-week lows none of the companies on the watch list experienced any loss. However, not all high quality dividend-paying stocks are created equal. The gains ranged from 4% to 23.8% with dividend included. Overall, the average gain was 10.8% without dividends and 13.9% with dividends, which is a little better than the S&P 500 but lagged the Dow Jones Industrial Average.... more
The 9 Elite Dividend Stocks of 2010
As dividend growth investors, we want to limit our purchases to only the very best stocks. Our first step is to look at published lists of dividend companies such as S&P 500 Dividend Aristocrats, U.S. Broad Dividend Achievers™ Index and The U.S. Dividend Champions. These lists are used to narrow the population of all publicly traded companies down to the very best dividend stocks. When these lists are combined, as I did with the Stock Ideas list, it is still a large and daunting collection of 218 unique companies. So, how do we find the Elite companies on this list?... more
Microsoft (MSFT) Caves to 23% Dividend Hike, Authorizes More Debt
Microsoft (Nasdaq: MSFT) announced a much anticipated dividend hike late Tuesday, in a move to return more of its cash hoard to frustrated shareholders. The software giant raised their quarterly dividend by 3 cents, or 23 percent, to $0.16 per share. On an annual basis the new dividend is $0.64, representing a dividend yield of 2.54 percent. In addition to the dividend hike, Microsoft's board of directors authorized up to $6 billion in additional debt made up of commercial paper and longer-term debt. Microsoft's new dividend is payable December 9 to shareholders of record on November 18. The ex-dividend date is November 16. The software giant also has $23.7 billion remaining under its September 2008 share repurchase plan. While the move will be welcomed by Microsoft... more
5 Stocks That Made This Super-Smart Move
Great companies know how to treat their customers right. When those companies need to manage their capital, their investors are their customers -- and treating them right means giving those investors what they want and need. That's why it's great to see so many companies starting to respond to their shareholders' demands. While shareholder initiatives on a wide range of topics have started to gain traction among certain companies, one of the most beneficial things a company can do for its shareholders is happening more and more often: many companies are starting to pay dividends for the first time.... more
Give These 3 Dividends a Try
Many investors lost money over the past couple of years, but the endowments at prestigious universities suffered even worse. Investment performance at Harvard and Yale "badly trailed" the results at the average college, as The Wall Street Journal so delicately put it. I'm shocked -- but not because of these endowments' lackluster returns. With exotic strategies and illiquid investments, Princeton registered a 24% loss in 2009, while Cornell took a 26% hit, and Harvard suffered a 27% drop. Compare those losses to the 18% drop for the median large endowment. Worse yet, many such institutions fund their operating expenses with the capital from endowments like these. If they don't generate capital gains, they may be forced to cut budgets and slash salaries.... more
5 Top Dividend Growth Stocks
In terms of popularity, Lady Gaga's got nothing on dividends. This isn't hyperbole -- according to Google News, "Lady Gaga" has appeared in 15,200 articles over the past month, while "dividends" appeared in 16,800 articles.... more
3 Hefty Yields From High Performers
Many investors lost money over the past couple of years, but the endowments at prestigious universities suffered even worse. Investment performance at Harvard and Yale "badly trailed" the results at the average college, as The Wall Street Journal so delicately put it. I'm shocked -- but not because of these endowments' lackluster returns. With exotic strategies and illiquid investments, Princeton registered a 24% loss in 2009, while Cornell took a 26% hit, and Harvard suffered a 27% drop. Compare those losses to the 18% drop for the median large endowment. Worse yet, many such institutions fund their operating expenses with the capital from endowments like these. If they don't generate capital gains, they may be forced to cut budgets and slash salaries.... more
Secure Your Future With These Stocks
Many investors lost money over the past couple of years, but the endowments at prestigious universities suffered even worse. Investment performance at Harvard and Yale "badly trailed" the results at the average college, as The Wall Street Journal so delicately put it. I'm shocked -- but not because of these endowments' lackluster returns. With exotic strategies and illiquid investments, Princeton registered a 24% loss in 2009, while Cornell took a 26% hit, and Harvard suffered a 27% drop. Compare those losses to the 18% drop for the median large endowment. Worse yet, many such institutions fund their operating expenses with the capital from endowments like these. If they don't generate capital gains, they may be forced to cut budgets and slash salaries.... more
3 Fat Dividends From Solid Stocks
Many investors lost money over the past couple of years, but the endowments at prestigious universities suffered even worse. Investment performance at Harvard and Yale "badly trailed" the results at the average college, as The Wall Street Journal so delicately put it. I'm shocked -- but not because of these endowments' lackluster returns. With exotic strategies and illiquid investments, Princeton registered a 24% loss in 2009, while Cornell took a 26% hit, and Harvard suffered a 27% drop. Compare those losses to the 18% drop for the median large endowment. Worse yet, many such institutions fund their operating expenses with the capital from endowments like these. If they don't generate capital gains, they may be forced to cut budgets and slash salaries.... more