Friday, February 17, 2017

Coca-Cola (KO) Dividend Stock Analysis

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverages worldwide. This dividend king has paid uninterrupted dividends on its common stock since 1893 and increased payments to common shareholders every for 55 years in a row. Warren Buffett’s Berkshire Hathaway (BRK.B) is the largest shareholder of the world’s largest beverage company.

The company’s last dividend increase was in February 2017 when the Board of Directors approved an 5.70% increase to 37 cents/share. Coca-Cola’s largest competitors include PepsiCo (PEP), Dr. Pepper Snapple (DPS) and Monster Beverage (MNST).

Over the past decade this dividend growth stock has delivered an annualized total return of 8.90% to its shareholders.

Thursday, February 16, 2017

The Most Successful Dividend Investors of all time

Dividend investing is as sexy as watching paint dry on the wall. Defining an entry criteria that selects quality dividend stocks with rising dividends over time and then patiently reinvesting these dividends while sitting on your hands is not exciting. While active traders have a plethora of hedge fund managers on the covers of Forbes magazine there are not many well-publicized successful dividend investors. Even value investing has its own superstars – Ben Graham and Warren Buffett.

I did some research and uncovered several successful dividend investors, whose stories provide reassurance that the traits of successful dividend investing I outlined in a previous post are indeed accurate.

Wednesday, February 15, 2017

Are you ignoring investment risks you know about?

I have always had a deep fascination with investing. I like learning about different ways to make money, strategies, and investments. It is always fascinating to watch how others make money in the markets, as you can always learn something from it.

Several months ago I watched a Netflix documentary called “ The Pit”.  It is a documentary about open outcry trading, where people buy and sell futures on an exchange floor. A long time ago, stocks, bonds and commodity futures were traded by actual humans on a trading floor ( think NYSE for stocks or the movie " Trading Places") For 20 years, one trader said, they were told that the exchange will become electronic. Yet, it never became electronic. As a result, it was a running joke that it would become an electronic exchange one day. When it did, many of these people were out of a way to earn a livelihood.

So how does it relate to me as a dividend investor? Long term readers know that my biggest investments are in the likes of Altria (MO) and Philip Morris International (PM). Combining Philip Morris International and Altria, I have a decent sized allocation to tobacco.

Monday, February 13, 2017

Seven Dividend Stocks Rewarding Shareholders With a Raise

Every week, I review the list of dividend increases as part of my monitoring process. I usually focus my attention on companies that have managed to boost annual dividends for at least a decade. This increases the odds of identifying companies that pay dependable dividends, and are committed to growing them over time. I then also review the trends in operating performance, such as earnings per share, in order to determine whether the business can support future dividend hikes.I follow a similar,but slightly more detailed process every few weeks or so, when I screen the list of dividend champions and contenders for investment opportunities. All of this helps me familiarize with story of as many companies as possible. That way, when the right quality company is available for sale at a good valuation, I can take action.

There were several companies which raised dividends to shareholders over the past week. The companies include:

Friday, February 10, 2017

How much money do you need to retire

The most important question that investors ask themselves is how much money do they need to retire. There are several things to consider, in order to answer this question. I will share those questions, and also share a rule of thumb that I have found helpful in my personal retirement planning.

1) How much money are you spending

In general, I have found that traditional rules of thumb that focused on salary income to be misleading. I prefer to focus on the spending levels in retirement. The more you save, the more you will be able to invest, and the faster you will reach financial independence. In order to get there, you need to compile a list of annual expenses from credit cards, checking accounts and other sources in order to get a reasonable gauge of past expenses. Putting everything in one place really helps in this direction.

The next step involves determining what your retirement may look like. Perhaps you will not be commuting one or two hours per day to work, and you won’t be needing professional business attire. So certain expenses would be taken out from the budget. However, if you expect to be doing more travelling, you may need to incorporate those numbers. If you are able to downsize your home, or plan to move to another location, this should also be taken into consideration.

If you expect to spend more in retirement, this means you may need a larger nest egg to support you. However, if you expect to spend less in retirement, you may get by on a smaller nest egg.

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