Tuesday, May 23, 2017

Merrill Edge Offers Commission Free Trades for Dividend Investors

I have reviewed a lot of brokerages throughout the years. All of the reviews have been based on my personal experience with the services. The personal experience and ideas is a main point of what I write about on this site too. I try to spread out my assets between several brokerage accounts, for additional diversification and peace of mind.

Over the past few years, I have opened and maintained an account with Merrill Edge. After a few years of contributions, the balance is set to exceed $50,000 for the first time. Why is that important?

Well for starters, Merrill Edge will provide me with 30 free trades per month, provided that I have at least a $50,000 combined balance between my Merrill Edge brokerage account and my Bank of America checking account. You need to have a Bank of America checking account, in order to take advantage of this bundled deal. When you have a checking account, the fees are waived, as long as you still have at least $50,000 in combined assets. Once you reach $50,000 in assets for three months in a row, you become part of their platinum preferred rewards tier. The value of your stocks, bonds and ETFs/funds counts towards that combined balance calculation.

Wednesday, May 17, 2017

Three REITs Approaching Value Territory

There are several REITs which seem to be punished excessively as of lately. A few, which have caught my eye are listed in more detail in the article.

There is a risk that retail is going down the drain, which would result in bankruptcies and vacancies for landlords. Depending on your beliefs, real estate investment trusts are either bargains today or they are value traps which are destined for mediocrity. Rather than fall for broad generalization, I decided to look at top tenants for each REIT I analyzed in this article, in order to determine the degree to which the business is subject to destruction from online. I also believe that while many retailers will have a harder time earning profits, the landlords that own the real estate have some margin of safety due to the long-term lease contracts. In addition, those landlords could always sell or repurpose those locations.

The other risk for retailers includes potentially higher interest rates, which would make many projects more expensive. Higher interest rates will reduce FFO and cash available to pay dividends to shareholders. The contra-argument to the rising interest rates thesis has been that rising rates are an indication of increased economic activity, which should bode well for landlords. The other contra-argument is that most of the REITs below have staggered maturities, and are mostly capitalized by equity rather than debt. The third contra-argument is that existing debt is already taken at low fixed interest rates. Rising interest rates should affect debt refinancing and profitability spread for new properties. Of course, everyone has been expecting rising interest rates for almost a decade now. Noone can predict the future.

As I mentioned before, I analyze REITs using the guidelines listed in this post. The guidelines include focusing on:

Monday, May 15, 2017

Five Dividend Paying Companies Rewarding Shareholders With A Raise

I review the list of dividend increases every week, as part of an effort to monitor my holdings and review promising companies in action. I usually focus on the companies with a minimum ten years of annual dividend increases. I then narrow the list down to companies which are raising distributions by more than a token amount. After that, I review the trends in earnings, dividends/distributions, and decide whether a company is worth it for further research or not. Reasons for not recommending myself to do further research on a company also involves high valuations. This exercise is helpful for my monitoring process, since it provides me with the discipline to go out and do the monitoring work.

Over the past week, there were five of companies that met the above mentioned requirements and raised dividends last week. The companies, along with my commentary are listed below:

The Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. It operates through four segments: Cleaning, Household, Lifestyle, and International. The company raised its quarterly dividend by 5% to 84 cents/share. This marked the 40th consecutive annual dividend increase for this dividend champion. Over the past decade, Clorox has managed to raise dividends at a rate of 10.50%/year.

The rate of dividend growth has been slowing down over the past decade however, as the payout ratio increased from 37% in 2007 to 63% in 2016.

Thursday, May 11, 2017

Why Magellan Midstream Partners Is the Best Dividend Growth Opportunity for 2017

Energy output has boomed across the country, and this little-known dividend stock could make investors a fortune.

New technologies have unlocked billions of barrels of oil and gas, even at prices that were once unthinkable. Traders betting the farm on drilling stocks over the past few months earned themselves overnight windfalls.

But when it comes to energy investing, the real money isn’t always in the firms doing the grunt work. “Pick-and-shovel” businesses provide the vital tools and services to a booming industry. Rather than taking the “all-or-nothing” route of searching for the next big strike, selling rigs, gear, and equipment can be a safer (and more lucrative) way to profit.

One of my favorites? Magellan Midstream Partners, L.P. (NYSE:MMP). This partnership owns pipelines, terminals, and processing plants across the country. And while it doesn’t get a lot of interest in the press, it’s one of my top dividend growth stocks for a couple of reasons.

Tuesday, May 9, 2017

J. M. Smucker (SJM) Dividend Stock Analysis

The J. M. Smucker Company (SJM) engages in manufacturing and marketing branded food products primarily in the United States, Canada, and internationally. The company is a member of the dividend achievers index, and has boosted distributions for nineteen years in a row.

The company’s last dividend increase was in July 2016 when the Board of Directors approved an 11.90% increase to 75 cents/share. The company’s largest competitors include Conagra (CAG), Kraft Heinz (KHC) and Hershey (HSY).

Over the past decade this dividend growth stock has delivered an annualized total return of 14.10% to its shareholders.

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