Showing posts with label dividend aristocrats. Show all posts
Showing posts with label dividend aristocrats. Show all posts

Tuesday, February 26, 2013

S&P Dividend Aristocrats Index – An Incomplete List for Dividend Growth Investors

When I was first getting started with dividend growth investing, one of the biggest authorities on dividend investing was the S&P Dividend Aristocrats Index. This list of stocks was compiled by a respectable agency and included companies which had raised dividends for at least a quarter of a century each.

The more I researched my way into the world of dividend investing however, the more companies I uncovered which were not included in this elite index of stocks. Chevron (CVX) is an example of a company which has consistently raised distributions for 25 years in a row and is not part of the index. Colgate –Palmolive (CL) is a company which has rewarded shareholders with higher distributions for 49 consecutive years, yet it was only recently added to the index. In addition, most recently a company which had only raised distributions for much less than 25 years had been added to the index – Ecolab (ECL). The company has only boosted dividends for 21 years in a row. This did not make much sense, and as a result I have paid very little attention to this index which I previously viewed as elite. The list was too exclusive and was leaving out a lot of potentially great dividend growth stocks. You can view the S&P Dividend Aristocrats Index list here.

I did a little further research on the index, and found out the criteria for inclusion in it:

1. A company has to be a member of the S&P 500
2. A company must have increased dividends every year for at least 25 consecutive years
3. The company must meet minimum float-adjusted market capitalization and liquidity requirements defined in the index inclusion and index exclusion rules below.

After reviewing the criteria, I realized that this index might be great for someone who might decide to start a mutual fund or an ETF based on it, and earn recurring fees, rather than for the serious do it yourself dividend investor. As a dividend investor, I do not really focus exclusively on companies that are part of the S&P500 index. In fact, I want to have a list of all companies raised dividends for over 25 years, and then decide for myself which companies to focus on. I prefer to focus on quality, than remove companies because of irrelevant criteria.

Having minimum liquidity and float requirements is important if you are creating an index, as it would make it easy for big institutional investors to put money in them. For individual investors however, these requirements are irrelevant, as few have the tens of millions of dollars in net worth that would make investing in stocks with low trading volumes difficult.

While I was a big fan of the 25 year rule, I found out that in certain circumstances, companies which have raised distributions for at least 20 consecutive years could be added if few other firms fit the criteria for inclusion. These criteria are related to maintaining a minimum 40 companies in the index and preventing certain sectors from comprising over 30% of the index.

Other mysterious omissions from the S&P Dividend Aristocrat index are related to special dividends and stock spin-offs.

Back in the mid 2000’s, the company Nucor (NUE) was experiencing a really good profitability, and had record profits. The company raised regular distributions significantly, but also started paying a large special dividend every quarter. With the recession in 2008 and decline in prices for steel, the company scrapped its special dividends. At the same time it kept raising distributions to shareholders, albeit at a slower pace than before. The reason why S&P removed this stock from its list of Dividend Aristocrats in 2009 was probably because they were using computer data and saw a decrease in total dividends paid, without taking the time to really understand the driver behind the change. In 2012, Nucor managed to raise its quarterly dividend for the 40th consecutive year in a row.

Another mysterious deletion from the S&P Dividend Aristocrats index occurred in 2008, after Altria Group (MO) had spun off Kraft Foods in the previous year. While this resulted in a decrease in the amount of distributions paid to Altria shareholders after the spin-off, this was mostly due to the distribution of Kraft shares to investors. An investor who purchased Altria stock in early 2007, received shares in Kraft Foods. The total amount of dividends paid by their shares in Altria (MO) and the Kraft shares they received in 2008 more than exceeded the distributions paid in 2006 and 2007.

As a result, I have focused my attention exclusively on the Dividend Champions list by David Fish. It includes over 100 companies which have regularly boosted dividends for over 25 years in a row, which provides for a more thorough list of stocks for further research.

Full Disclosure : Long MO, NUE, CL ,CVX

Relevant Articles:

Why do I like Dividend Aristocrats?
Dividend Aristocrats List
Dividend Aristocrats List for 2009
The World’s Best Dividend Portfolio
Most Widely Held Dividend Growth Stocks
- Carnival of Wealth

Wednesday, December 7, 2011

Dividend Aristocrats List

The Dividend Aristocrats index was created by Standard and Poor’s, to include companies in the S&P 500 which have increased dividends for at least 25 consecutive years. The types of companies included in the index are representative of several sectors, and thus the list is relatively well diversified. The stocks offer both capital appreciation potential as well as a growing dividend payment. Besides being a member of S&P 500 index, companies need to have a float of at least $3 billion, an average daily trading volume of $5 million and have increased distributions for at least 25 years in a row. Companies are deleted from the list, if they fail to increase or cut dividends in a given year.

The index is typically rebalanced once per year in December. The number of constituents bottomed at 42 in 2010, and will increase to 50 in 2012. Recently, Standard and Poor’s announced that it would not take into account special dividends in its determination of a streak of 25 years of dividend increases in a row. As a result, several new companies were added to the index:

AT&T Inc. (T), together with its subsidiaries, provides telecommunication services to consumers, businesses, and other service providers worldwide. The company has raised dividends for 27 consecutive years. Yield: 5.90% (analysis)

HCP, Inc. (HCP) is an independent hybrid real estate investment trust. It primarily invests in properties serving the healthcare industry including sectors of healthcare such as senior housing, life science, medical office, hospital and skilled nursing. The company has raised dividends for 26 consecutive years. Yield: 5.50% (analysis)

Sysco Corporation (SYY), through its subsidiaries, engages in the marketing and distribution of a range of food and related products primarily to the foodservice or food-away-from-home industry. The company has raised dividends for 42 consecutive years. Yield: 3.70% (analysis)

Illinois Tool Works Inc. (ITW) manufactures a range of industrial products and equipment worldwide. The company has raised dividends for 48 consecutive years. Yield: 3.30%

Genuine Parts Company (GPC) distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, Canada, and Mexico. The company has raised dividends for 55 consecutive years. Yield: 3.50% (analysis)

Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. The company has raised dividends for 34 consecutive years. Yield: 3% (analysis)

Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised dividends for 48 consecutive years. Yield: 2.70% (analysis)

T. Rowe Price Group, Inc. (TROW) is a publicly owned asset management holding company. The company has raised dividends for 24 consecutive years. Yield: 2.40% (analysis)

Franklin Resources Inc. (BEN) is a publicly owned asset management holding company. The company has raised dividends for 30 consecutive years. Yield: 0.90%

The only company, removed from the index includes CenturyLink (CTL).

CenturyLink, Inc. (CTL), together with its subsidiaries, operates as an integrated communications company. The company has maintained its quarterly dividend at 72.50 cents/share for two years, which is why it is being kicked out of the index after raising distributions for 37 years in a row.

The complete listing is included below:



While I initially considered the Dividend Aristocrat’s index the cream of the crop and the first stop in my dividend research, the volume and capitalization requirements have somewhat turned me off of the index. For example, companies which have managed to raise dividends for over a quarter of a century with a market capitalization of less than $3 billion and average daily volume of less than $5 million dollars would not be included. This is the reason why I prefer to use the Dividend Champions index instead. The only drawback of the Champions index is that the total returns are not calculated, whereas the total returns on the S&P Dividend Aristocrat’s index are.

Full Disclosure: Long MMM, AFL, ABT, APD, ADM, ADP, BF/B, CB, CINF, CL, CLX, KO, ED, EMR, XOM, FDO, GWW, ITW, JNJ, KMB, LOW, MKC, MCD, MHP, MDT, PEP, PG, SYY, WMT, WAG


Relevant Articles:

Wednesday, December 22, 2010

Dividend Aristocrats list for 2011

The Dividend Aristocrats index includes members of the S&P 500 which have raised distributions for at least 25 years in a row. This is no small accomplishment, given the fact that this long period of time includes several recessions, oil price shocks and two wars in Iraq. The companies that could achieve this accomplishment have been able to generate rising dividends for at least 25 years, due to their strong competitive advantages and sound business models. Only a company with a competitive advantage could afford to raise dividends to shareholders for such a long period of time.


Over the past few years, the S&P Dividend Aristocrats index has consistently beaten the S&P 500. Over the past 5 years, it has delivered annualized total returns of 5.20%, which was over four percent higher than S&P500's 1% annualized return for the same time period. This is despite the fact that many former dividend aristocrats in the financial sector cut dividends and were booted out of the elite dividend index during the financial crisis of 2007-2009. There are 42 stocks remaining right now. Below you could see the list of all current dividend aristocrats.


The S&P announced that it was adding three new components and deleting three old components of the index. The companies that were added include:

MCCORMICK & CO INC (MKC)
HORMEL FOODS CORP (HRL)
ECOLAB INC (ECL)

The companies that were deleted, include:

LILLY (ELI) & CO (LLY)
SUPERVALU INC (SVU)
INTEGRYS ENERGY GROUP INC (TEG)

The screen that I used in order to gauge the attractiveness of each o the 42 dividend aristocrats had the following criteria:

1) Company was a member for the S&P Dividend Aristocrats Index
2) Company traded at a P/E ratio less than 20
3) The dividend payout ratio was less than 60%
4) The current dividend yield was at least 2.50%

I have highlighted the ones that look attractively valued at the moment:

Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of health care products worldwide. It operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. The company has raised dividends for 38 years in a row. (analysis)

Automatic Data Processing, Inc. (ADP) provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers. It operates in three segments: Employer Services, Professional Employer Organization Services, and Dealer Services. The company has raised dividends for 36 years in a row. (analysis)

Bemis Company, Inc. (BMS) manufactures and sells flexible packaging products and pressure sensitive materials in the United States, Canada, Mexico, South America, Europe, and Asia. The company operates in two segments, Flexible Packaging and Pressure Sensitive Materials. The company has raised dividends for 27 years in a row. (analysis)

The Chubb Corporation (CB), through its subsidiaries, provides property and casualty insurance to businesses and individuals. The company has raised dividends for 45 years in a row. (analysis)

Cincinnati Financial Corporation (CINF), through its subsidiaries, operates in the property casualty insurance business in the United States. It operates in four segments: Commercial Lines Property Casualty Insurance, Personal Lines Property Casualty Insurance, Life Insurance, and Investment. The company has raised dividends for 50 years in a row. (analysis)

The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. The company operates through four segments: Cleaning, Lifestyle, Household, and International. The company has raised dividends for 33 years in a row. (analysis)

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company has raised dividends for 48 years in a row. (analysis)

Kimberly-Clark Corporation (KMB) , together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional & Other, and Health Care. The company has raised dividends for 38 years in a row. (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. The company has raised dividends for 48 years in a row. (analysis)

McDonald’s Corporation (MCD), together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald’s restaurants that offer various food items, soft drinks, coffee, and other beverages. The company has raised dividends for 34 years in a row. (analysis)

The McGraw-Hill Companies, Inc. (MHP) provides information services and products to the education, financial services, and business information markets worldwide. It operates in three segments: McGraw-Hill Education, Financial Services, and Information & Media. The company has raised dividends for 37 years in a row. (analysis)

PepsiCo, Inc. (PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. The company operates in four divisions: PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAB), PepsiCo Europe, and PepsiCo Asia, Middle East and Africa (AMEA). The company has raised dividends for 38 years in a row. (analysis)

The Procter & Gamble Company (PG) provides consumer packaged goods in the United States and internationally. The company operates in three global business units (GBUs): Beauty and Grooming, Health and Well-Being, and Household Care. The company has raised dividends for 54 years in a row. (analysis)

PPG Industries, Inc. (PPG) manufactures and supplies protective and decorative coatings. The company has raised dividends for 39 years in a row. (analysis)

V.F. Corporation (VFC), together with its subsidiaries, engages in the design, manufacture, and sourcing of branded apparel and related products for men, women, and children in the United States. The company has raised dividends for 38 years in a row. (analysis)

Screening for quality dividend stocks is just part of the process of identifying the best dividend stocks. Astute dividend investors should also research in detail each company in order to gauge whether it has any competitive advantages that would enable it to increase earnings and dividends over the next decades.

Full Disclosure: Long ABT, ADM, ADP,AFL, APD, BF-B,CB,CINF, CLX, ED, EMR, FDO, GWW, JNJ, KMB, KO, MCD, MHP, MKC, MMM, PEP, PG, WAG, WMT ,XOM
Relevant Articles:

Monday, August 23, 2010

Exxon Mobil’s Stingy Dividend Payout

Exxon Mobil (XOM) is one of the largest oil companies in the world. Its roots could be traced to Standard Oil, which was broken into several separate companies in 1911. Eventually two of those companies merged in 1999 to form Exxon Mobil. The company has benefited tremendously over the past decade, as the price of oil has increased over 8 times since 1999. This dividend aristocrat has paid dividends since 1911 and has consistently raised them for 28 years in a row. Despite the fact that many believe so called alternative energy sources would replace fossil fuels in the future, oil and gas would still be around at least for the next few decades. As a result investing in oil companies makes sense for income investors. Check my analysis of the stock.

The largest oil companies in the world include Exxon Mobil (XOM), Royal Dutch (RDS-B), Chevron (CVX), Total (TOT), Conoco Phillips( COP), and British Petroleum (BP).







(Source: Yahoo Finance from Aug 16, 2010)


Of all oil companies, Exxon Mobil has the lowest yield and one of the lowest dividend payouts. BP had a higher dividend payout and a higher dividend yield before it cut dividends this year. Exxon seems to be plowing most of its earnings into stock buybacks. Historically share buybacks have not been one of the smartest ways for management to allocate cash, as most buybacks occur when the price of the underlying is at its highest.

For example General Electric (GE) repurchased stock worth billions of dollars when the price was above $30, only to sell it back at $22 during the global financial crisis of 2007-2009. Exxon has been raising dividends, but the disproportionate amount of share buybacks to dividends suggests that management is not certain about the future profitability of the company. If they believed that oil prices would stay higher over the next few decades, this would mean that earnings per share could only go higher from here. This would support a higher dividend than the one we have today. Of course if oil prices plunge below $50 and stay there, then profitability would suffer and if dividends are too high, they might be cut. This could lead to angry shareholders and depressed stock price for some time. With buybacks however this could all be avoided, since they could be canceled at any time, without much publicity.

Other than that, Exxon Mobil (XOM) could afford to be more generous with shareholders, and raise dividends at a pace that is higher than the 5% annual dividend growth it has delivered over the past decade. That being said, Exxon Mobil (XOM) does appear to be attractively valued, as it could deliver not only decent dividend growth but solid price returns as well. Other oil companies which have stable and growing dividend payments include:

Chevron Corporation (CVX) operates as an integrated energy company worldwide. Chevron Corporation is a component of the S&P 500 and Dow Jones Industrials Indexes. The company is also a dividend achiever, which has consistently raised its dividends for 23 years in a row. Chevron trades at a P/E of 9.30, yields 3.70% and has an adequately covered dividend payment. (analysis)

Royal Dutch Shell Plc (RDS.B) operates as an oil and gas company worldwide. The company explores for, and extracts crude oil and natural gas. Royal Dutch Shell has managed to boost distributions at least since 1993. Currently the company is trading at a P/E of 11.10 and yields 6.30%. (analysis)

ConocoPhillips operates as an integrated energy company worldwide. It operates through six segments: Exploration and Production (E&P), Midstream, Refining and Marketing (R&M), LUKOIL Investment, Chemicals, and Emerging Businesses. ConocoPhillips has raised dividends for ten years in a row. Currently the company is trading at a P/E of 8.90 and yields 4%.

Full Disclosure: Long CVX RDS.B and XOM

Relevant Articles:

- Three Dividend Stocks to Capitalize on BP’s weakness
- Chevron Corporation (CVX) Dividend Stock Analysis
- Exxon Mobil (XOM) Dividend Stock Analysis
- Dividends versus Share Buybacks/Stock repurchases

Friday, July 23, 2010

Wal-Mart (WMT): A High Dividend Growth Stock

Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. The company is member of the S&P 500, Dow Jones Industrials Average and the S&P Dividend Aristocrats indexes. Wal-Mart Stores has consistently increased dividends every year for 36 years. The company announced an 11% dividend raise in March 2010.


Over the past decade this dividend stock has delivered a negative average total return of 0.50% annually. The stock is trading at the same levels it was changing hands a decade ago.


The company has managed to deliver an 11.60% average annual increase in its EPS between 2000 and 2009. Next year Wal-Mart is expected to earn $4.01 share, followed by $4.40/share in FY 2011.

With growth slowing down, the price/earnings multiple could contract even lower. This being said I believe Wal-Mart is an excellent business, as it always investing in innovation that helps control inventory and focus on certain types of merchandise that offsets weaker demand in recessions. Despite the expected slow down in consumer spending, Wal Mart is well positioned with its diverse product mix of consumer staples and foods that it is offering on its shelves. It has lower prices in comparison to its competitors, which could drive more traffic for the retailer. Just like Walgreen (WAG), Wal-Mart Stores expects to slow down on the rate of opening new stores and instead would try to focus on developing the profitability of existing locations, without cannibalizing sales in its existing outlets. The lower capital spending has freed up enough cash flow to fund the company's agressive share buyback program.
A potential growth area for the company are its international operations, where selling space has increased by more than 40% since 2006. Wal-Mart (WMT) currently has 267 locations in China, operating under Wal-Mart or Trust Mart’s names. The company had 3615 international locations at the end of 2008. There is still room for growth in Chinese operations, fueled by the increase in number of middle-class families in the country. For Wal-Mart, China represents the biggest frontier since it conquered America. China's voracious consumers are pushing retail sales to a 15 percent annual growth rate; that market will hit $860 billion by 2009, according to Bain & Co. (source).

The Return on Equity has firmly remained above 20%. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.




Annual dividends have increased by an average of 18.30 % per annum since 2000, which is higher than the growth in EPS. The disparity is mostly due to a gradual increase in the dividend payout ratio and the billions of dollars the Bentonville, AR based retailer has spend on stock buybacks.An 18 % growth in dividends translates into the dividend payment doubling almost every four years. If we look at historical data, going as far back as 1981, Wal-Mart has actually managed to double its dividend payment every three years on average. Wal-Mart is an example of a company that kept paying dividends while enjoying strong double digit growth for several decades.



The slowdown in capital spending could free up more cash for dividend increases and share buybacks. Thus, despite expectations for EPS growth of 7% over the next few years, Wal-Mart could still manage to deliver low double-digit dividend growth.The dividend payout ratio has been on the rise, although it is still much lower than my 50% threshold. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.




Currently Wal-Mart Stores is trading at 13.40 times earnings, yields 2.40% and has an adequately covered dividend payment. The company does spend a lot of its cash flow on stock buybacks, which could prove beneficial in the long run since it could provide above average dividend growth over time for the same effort.

Full Disclosure: Long WMT

Monday, July 12, 2010

Will higher taxes bring dividend stocks down?

Back in 2003 the Bush administration cut the top rates on dividends and capital gains to 15%. After seven years the preferential treatment of investment income is set to expire. If congress doesn’t extend the tax cuts, the top rates on dividend income could increase to as much as 39%. This leaves many investors wondering whether dividend stocks will be negatively affected by the tax hike.

Since 2003 there has been great interest in dividend paying stocks. Many companies such as Yum Brands (YUM) initiated dividends for the first time ever, while companies like Microsoft (MSFT) paid onetime special dividend payments to shareholders. In addition to that several dividend focused exchange traded funds such as iShares Dow Jones Select Dividend index (DVY) and SPDR S&P Dividend (SDY) were formed, attracting millions in assets under management. In addition to that many long time dividend payers such as PepsiCo (PEP) started increasing distributions at a higher pace than before, which further benefited their shareholders.

As a result, some dividend investors are concerned that the increase of tax rates on dividends will negatively affect payouts, which would negatively affect dividend stock prices for the next few years. In general the future tax rates on investment income for 2011 and beyond are still not set in stone by Congress, which makes most assumptions on taxation of dividends or capital gains pure speculation. It is possible that the top rate on dividend income could only increase to 23.60%, as 20% was the highest tax on dividend income for which Obama campaigned in 2008, while the 3.60% comes as the extra tax for high income earners which generate investment income.

So should dividend investors worry about the potential increase in taxes on dividend income? The answer is that it depends. While some companies might cut dividends as a result of the tax hike, many dividend payers would keep following a strategy of regularly raising distributions, provided that these companies can generate enough in free cash flow. Most dividend growth investors would not be affected by much, particularly since most dividend achievers and dividend aristocrats have increased distributions for over 10 and 25 years, which was before the Bush tax cuts were initiated. The companies that are less likely to cut distributions than grow them include:

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide.Johnson & Johnson is a major component of the S&P 500, Dow Industrials and the Dividend Aristocrats Indexes. One of the company’s largest shareholders includes Warren Buffett. JNJ has been consistently increasing its dividends for 48 consecutive years.(analysis)

McDonald’s Corporation (MCD), together with its subsidiaries, franchises and operates McDonald’s restaurants in the food service industry worldwide. The company is also a dividend aristocrat, which has been consistently increasing its dividends for 33 consecutive years. (analysis)

The Procter & Gamble Company (P&G), together with its subsidiaries, provides branded consumer goods products worldwide. The company operates in three global business units (GBU): Beauty, Health and Well-Being, and Household Care. Procter & Gamble is a dividend aristocrat as well as a component of the S&P 500 index. One of its most prominent investors includes the legendary Warren Buffett. Procter & Gamble has been increasing its dividends for the past 54 consecutive years. (analysis)

Wal-Mart Stores, Inc. (WMT)operates retail stores in various formats worldwide. The company is member of the S&P 500, Dow Jones Industrials Average and the S&P Dividend Aristocrats indexes. Wal-Mart Stores has consistently increased dividends every year for 36 years. (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. The company is member of the S&P 500, Dow Jones Industrials and the S&P Dividend Aristocrats indexes. Coca-Cola has paid uninterrupted dividends on its common stock since 1893 and increased payments to common shareholders every year for 48 years. (analysis)

Exxon Mobil Corporation (XOM) engages in the exploration, production, transportation, and sale of crude oil and natural gas. The company is a component of the S&P 500, Dow Jones Industrials and the Dividend Aristocrats indexes. Exxon Mobil has been consistently increasing its dividends for 28 years in a row, and has paid dividends for over one hundred years. (analysis)

In addition to that, investors could avoid paying taxes on dividend income by investing through tax-deferred accounts such as the ROTH IRA. There is a contribution limit of $5000 for taxpayers, and there is also an additional catch up contribution for taxpayers over the age of 50. Those contributions should come from earned income (such as employee income) and are phased out for high income individuals. While a ROTH IRA would not generate any tax savings today, any money put in it compound tax free forever, there are no required minimum distributions and any distributions from it are tax free.

Furthermore I doubt that quality dividend stocks such as the dividend achievers or dividend aristocrats would be affected much even if tax rates increase, because not every individual would pay top rates on dividend income. In addition to that dividend returns are much less volatile than stock price returns, which is the reason why retirees prefer dividend stocks in retirement. Focusing too much on just one aspect of the investment process could lead to subpar returns over time. Many investors who wait for a few months longer before they sold their stock in order to qualify for long-term capital gains treatment could see their paper gains evaporate and turn into massive losses. This is just one reason why focusing just on tax rates while ignoring business or market fundamentals of the companies one is invested in is a dangerous exercise.

Full Disclosure: Long all stocks mentioned except MSFT

This article was featured on the Carnival of Money Stories – Starting A Sideline Edition

Relevant Articles:

- The case for dividend investing in retirement
- Capital gains for dividend investors
- Dividend ETF or Dividend Stocks?
- Why Dividend Growth Stocks Rock?


Friday, July 2, 2010

McDonald’s Corporation (MCD), a must own dividend stock

McDonald’s Corporation, together with its subsidiaries, franchises and operates McDonald’s restaurants in the food service industry worldwide. The company's share of the US fast food market is several times larger than its closest competitors, Burger King (BKC) and Wendy's (WEN).


McDonald’s is a major component of the S&P 500 and Dow Industrials indexes. The company is also a dividend aristocrat, which has been consistently increasing its dividends for 33 consecutive years. McDonald’s is one of the world’s most recognizable brands. Because of this and because it has performed very well to stockholders over the years, it is one of the most widely held income stocks by dividend investors.

Over the past decade this dividend stock has delivered an annual average total return of 8.70% to its shareholders.


At the same time company has managed to deliver an impressive 12.20% average annual increase in its EPS since 2000. Analysts are expecting MCD to grow EPS to $4.49 by 2010 and $4.87 in 2011.. The economic slowdown is making consumers to trade down and dine out at fast food places like the ones owned by the Golden Arches. Mcdonald’s has been focusing more on expanding the sales of existing restaurants since 2003 versus relying on new stores to be the driver for growth. Same store sales and profits have been driven by product innovation, and comparable-store sales growth, and are part of the company’s recent success. The constant innovations in the menu are indeed fueling strong same store sales volumes. The McCafe Offerings, in addition to the Dollar Breakfast Menu and Restaurant remodeling are further fuelling the growth in sales.

International operations, which accounted for almost half of operating profits in 2008, have been a major growth factor over the past two decades. This however exposes the company to fluctuations in exchange rates, which could add or detract from EPS performance. MCD's stated operating priorities include fixing operating inadequacies in existing restaurants; taking a more integrated and focused approach to growth, with an emphasis on increasing sales, margins and returns in existing restaurants; and ensuring the correct operating structure and resources, aligned behind focusing priorities that create benefits for its customers and restaurants.

The ROE has been increasing since it hit a low of 14 in 2002. Recently it hit 30%, and has stayed above that level for two consecutive years.

Annual dividend payments have increased by an average of 28.20% annually since 2000, which is almost two and a half times higher than the growth in EPS.


A 28 % growth in dividends translates into the dividend payment doubling almost every two and a half years. Since 1979 McDonald’s has actually managed to double its dividend payment almost every four and a half years on average. Future dividend payments would likely grow at 10% for the foreseeable future.
The dividend payout ratio has steadily increased over the past decade, due to the fact the dividend growth was much faster than earnings growth. Currently the payout is at 50% . A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings. The slow growth in earnings could put future dividend increases at risk.



McDonald’s is currently attractively valued. The stock trades at a P/E of 16.50, yields 3.10% and has an adequately covered dividend payment. The company has proven to be somewhat recession resistant. I would be a buyer of MCD at current prices.

Full Disclosure: Long MCD

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Wednesday, June 30, 2010

Benchmarking Dividend income

The investment returns of most fund managers are generally compared against a common benchmark. This provides for an objective evaluation of their performance over a period of time. A common benchmark for most mutual fund managers is the total returns of the S&P 500 index. This benchmark is also useful for comparison to dividend investors as well. For many long-term dividend investors however, income growth is very important as well. Thus having an increase or decrease in dividend incomes does not mean much, unless it is being compared to a common benchmark.

While there have been several dividend indexes such as the Dividend Aristocrats and the Dividend Achievers, which have dividend ETFs that provide accurate information on dividend and price returns, these have not been around as much as the broad S&P 500 index. In addition to that the S&P 500 is sector diversified, and most information is widely available. Because of that, I would consider the changes in annual dividend income of the S&P 500 index as an important barometer against which to benchmark your dividend income over time.

Over the past 32 years, S&P 500 dividends have grown by 5% per year on average.


Below you could find a complete breakdown of annual changes in reported dividends of the S&P 500 companies:


The top ten holdings of S&P 500 have an almost 19% weight in the index. All of them pay dividends except for Apple Computers (AAPL), although three of them have cut distributions over the past one year. It is expected in a dividend portfolio that even some of the best dividend stocks are susceptible to dividend cuts or eliminations. General Electric (GE) and Bank of America (BAC) are two such examples of former dividend aristocrats which had to cut distributions during the financial crisis of 2007-2009. Many income investors which had an allocation to financial stocks, suffered similar drops in dividend income in 2008 and 2009.


(Ten S&P 500 components with the highest weight in the index)

Other companies such as International Business Machines (IBM), Johnson & Johnson (JNJ), Procter & Gamble (PG), AT&T (T) and Exxon-Mobil (XOM) continue raising dividends, despite the broad economic slowdown. Because of their large size, the companies in the S&P 500 are representative for most dividend stocks commonly held by dividend investors.
International Business Machines (IBM) has raised dividends for 15 consecutive years and thus is a member of the Dividend Achievers index. Yield: 2% (analysis)

Johnson & Johnson (JNJ) has raised dividends for 48 years in a row. Yield: 3.70%(analysis)

Procter & Gamble (PG) has boosted distributions for 54 consecutive years. Yield: 3.20% (analysis)

AT&T (T) has increased dividend payments for 26 years in a row. Yield: 6.80% (analysis)

Exxon-Mobil (XOM) has a record of 28 consecutive annual dividend increases. Yield: 3% (analysis)

Full Disclosure: Long CVX, PG, JNJ and XOM

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Friday, June 25, 2010

Johnson & Johnson (JNJ):the best dividend growth stock

Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Johnson & Johnson is a major component of the S&P 500, Dow Industrials and the Dividend Aristocrats Indexes. One of the company’s largest shareholders includes Warren Buffett. JNJ has been consistently increasing its dividend for 48 consecutive years. Dividend author Dave Van Knapp has also included the company in his most recent book "The Top 40 Dividend Stocks for 2010".

Over the past decade this dividend stock has delivered a 4.90% average annual total return to its shareholders.

At the same time company has managed to deliver a 11.10% average annual increase in its EPS since 2000. Analysis expect a 9.80% increase in EPS to $4.83 in 2010, follow by an 8% increase to $5.23 in 2011.

Johnson & Johnson is the first stock that comes to mind when illustrating the benefits of dividend investing. The company has been enormously successful, has a strong competitive advantage and as a result has managed to boost distributions for 48 consecutive years. It is no surprise that it is found in the portfolios of most dividend investors. The company’s sales and earnings growth would be driven by the company’s ongoing acquisition program, its pharmaceutical pipeline as well as expansion in emerging markets. Remicade and Stelara are two drugs which could fuel growth in sales, as is a new blood thinner drug under development, which would prevent strokes in patients. The company should do well due to its diversified revenues coming from drugs, consumer products and medical devices. Despite its size, Johnson & Johnson is highly innovative and aggressively funding new product development in order to maintain leadership positions.

The ROE has remained largely between 25% and 30%, with the exception of 2006 and 2007.


Annual dividend payments have increased by an average of 13.40% annually since 2000, which is much higher than the growth in EPS. A 14% growth in dividends translates into the dividend payment doubling almost every five years. Since 1971 JNJ has indeed managed to double its dividend payment every 5 years.

The dividend payout ratio has remained in a range between 36% and 45%. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.


JNJ is attractively valued at a price/earnings multiple of 12.50, a low dividend payout ratio and at a current dividend yield of 3.60%. In comparison Abbott Laboratories (ABT) trades at a P/E of 13.90 and yields 3.60% while Bristol-Myers Squibb (BMY) trades at a P/E of 5 and yields 5.00%. I would keep accumulating Johnson & Johnson (JNJ) stock.
Full Disclosure: Long ABT and JNJ
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Friday, June 18, 2010

Air Products and Chemicals (APD) Dividend Stock Analysis

Air Products and Chemicals, Inc. offers atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide. The company is member of the S&P 500, Dow Jones Industrials and the S&P Dividend Aristocrats indexes. Air Products and Chemicals has paid uninterrupted dividends on its common stock since 1954 and increased payments to common shareholders every year for 28 years.
Over the past decade this dividend stock has delivered an average total return of 11.80% to its shareholders.

The company has managed to deliver a 20.20% average annual increase in its EPS over the past decade, largely due to low earnings in 2000. Analysts are expecting an increase in EPS to $4.98 for 2010 and $5.63 by 2011. This would be a nice increase from the 2009 earnings per share of $3.

The company is one of the largest producers of industrial gases and also owns a large specialty chemicals business. The potential areas of growth include growth in industrial gases, including electronics, hydrogen for petroleum refining, health care and Asian operations. The market for industrial gases gas increased at double the rate of the economy over the past years, which could be another driver of revenue growth. Air Products and Chemicals has announced its intent to acquire Airgas (ARG) in an unfriendly take-over in February 2010. This deal could benefit the company through cost savings if successful.

The Return on Equity has been stable around 15% over the past decade. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.

Annual dividend payments have increased by an average of 10.30% since 2000, which is lower than the growth in EPS. The company last raised its dividend by 8.90% in February 2010, for the 28th year in a row.

A 10 % growth in dividends translates into the dividend payment doubling every seven years. If we look at historical data, going as far back as 1983, Air Products and Chemicals has indeed managed to double its dividend payment every seven years on average.

The dividend payout ratio remained below 50% for the majority of the past decade, with the exception of 2000 and 2009. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently Air Products and Chemicals is trading at 17.30 times earnings and yields 2.90%. In comparison Praxair (PX) trades at a P/E multiple of 19 and yields 2.40%. I consider Air Products and Chemicals attractively valued at the moment.

Full Disclosure: Long APD

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Friday, June 4, 2010

Coca Cola (KO) Dividend Stock Analysis

The Coca-Cola Company manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. The company is member of the S&P 500, Dow Jones Industrials and the S&P Dividend Aristocrats indexes. Coca-Cola has paid uninterrupted dividends on its common stock since 1893 and increased payments to common shareholders every year for 48 years. One of the largest holders of Coca-Cola stock is no other than the Oracle Warren Buffett, who is the chairman of Berkshire Hathaway (BRK.A;BRK.B) and one of the best investors in the world.

Over the past decade this dividend stock has delivered an average total return of 3.60% to its shareholders. The stock has largely traded between $65 and $40 over the past decade.

The company has managed to deliver a 14.30% average annual increase in its EPS over the past decade. Analysts are expecting an increase in EPS to $3.45 for 2010 and $3.76 by 2011. This would be a nice increase from the 2009 earnings per share of $2.93. Future drivers for earnings could be the company’s tea, coffee and water operations. Cost savings initiatives could also add to the bottom line over time, as well as increases in volumes in emerging markets such as China.

The acquisition of Vitaminwater in 2007 has increased growth in the company’s non-soda business, which is where Coke lags behind PepsiCo. The acquisition of CCE’s North American bottling business, should bring in sufficient cost savings for the company’s North American supply chain, which would result in increase in cash flows. The deal is expected to deliver approximately $350 million dollars in cost savings over the first four years of implementation. In addition to that, it will bring more control over North American operations, deliver more flexibility in the company’s strategy implementation and reduce conflicts over the product mix with bottlers.

The Return on Equity has been in a decline after hitting a high in 2001. It has stabilized since 2005 at a very impressive 30%. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.

The reason for the high returns on equity is that the company does not generally own the high capital intensive bottlers or fountain wholesalers, which produce and distribute the actual drinks. Instead it sells syrups, which are then mixed at the bottlers plants, and then are packaged and distributed. Coca Cola does have partial interests in 38 bottlers and distributors however, which accounted for over half of its worldwide volumes. Coca Cola Enterprises (CCE), in which Coca Cola (KO) owns a 34% stake, accounts for almost half of Coca-Cola’s US concentrate sales.

Annual dividend payments have increased by an average of 10.30% since 2000, which is lower than the growth in EPS. The company last raised its dividend by 7.30% in February 2010, for the 48th year in a row.

A 10 % growth in dividends translates into the dividend payment doubling every seven years. If we look at historical data, going as far back as 1968, The Coca Cola Company has aindeed managed to double its dividend payment every seven years on average.

The dividend payout ratio remained above 50% for the majority of the past decade. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently Coca Cola is trading at 17.30times earnings and yields 3.40%. In comparison arch rival in the cola wars Pepsi Co (PEP) trades at a P/E multiple of 16.10 and yields 3.10%. Check my analysis of Pepsi Co (PEP). I consider Coca Cola Company is just as attractively valued at the moment as Pepsi Co. I would add to my position in the stock as long as it trades below $58.60.

Full Disclosure: Long KO and PEP

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Wednesday, May 26, 2010

A dividend portfolio for the long-term

As a dividend growth investor you would find that over time some stocks tend to fall off your radar and no longer fit the rising income stream criteria that you purchased them for in the first place. Thus it is important to monitor your portfolio on a regular basis and place such stocks on your sell radar. M&T Bank (MTB) and British Petroleum (BP) are two companies which I am closely monitoring, since they have both frozen dividends for several quarters in a row.

The four important characteristics of successful dividend portfolios include entry and exit criteria, diversification, dollar cost averaging and selective dividend reinvestment. I have built my dividend portfolio around those important characteristics over the past few years. I have grouped the stocks I own by sector. I have also included additional information about each company, and I have also marked any companies which I do not find attractive at the moment with "HOLD". Just because a company is not attractively valued at the moment however does not mean that it is automatically a sell. Any companies which I have considered to be a sell have been sold off.

Consumer Discretionary

Family Dollar Stores, Inc. (FDO) operates a chain of self-service retail discount stores for low to lower-middle income consumers in the United States. This dividend aristocrat has raised dividends for 33 consecutive years and yields 1.50%. (analysis) HOLD

McDonald’s Corporation (MCD), together with its subsidiaries, franchises and operates McDonald’s restaurants in the food service industry worldwide. This dividend aristocrat has raised dividends for 33 consecutive years and yields 3.20%. (analysis)

The McGraw-Hill Companies (MHP), Inc. provides information services and products to the education, financial services, and business information markets worldwide. This dividend aristocrat has raised dividends for 37 consecutive years and yields 3.30%. (analysis)

The Sherwin-Williams Company (SHW) engages in the development, manufacture, distribution, and sale of paints, coatings, and related products in North and South America, Europe, and Asia. This dividend aristocrat has raised dividends for 32 consecutive years and yields 1.90%. (analysis) HOLD

Consumer Staples

Archer-Daniels-Midland Company(ADM) procures, transports, stores, processes, and merchandises agricultural commodities and products in the United States and internationally. This dividend aristocrat has raised dividends for 35 consecutive years and yields 2.40%. (analysis) HOLD

The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. This dividend aristocrat has raised dividends for 32 consecutive years and yields 3.20%. (analysis)

Kimberly-Clark Corporation (KMB), together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. This dividend aristocrat has raised dividends for 38 consecutive years and yields 4.30%. (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. This dividend aristocrat has raised dividends for 48 consecutive years and yields 3.40%. (analysis)

PepsiCo, Inc. (PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. This dividend aristocrat has raised dividends for 37 consecutive years and yields 3%. (analysis)

The Procter & Gamble Company (PG) engages in the manufacture and sale of consumer goods worldwide. This dividend aristocrat has raised dividends for 53 consecutive years and yields 3.10%. (analysis)

Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. This dividend aristocrat has raised dividends for 35 consecutive years and yields 2.40%. (analysis)

Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. This dividend aristocrat has raised dividends for 47 consecutive years and yields 2.70%. (analysis)

McCormick & Company, Incorporated (MKC) engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. This dividend achiever has raised dividends for 24 consecutive years and yields 2.70%. (analysis)

Universal Corporation (UVV), together with its subsidiaries, operates as the leaf tobacco merchants and processors worldwide. This dividend champion has raised dividends for 39 consecutive years and yields 3.90%. (analysis)

Altria Group, Inc. (MO), through its subsidiaries, engages in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. This dividend stock yields 6.70%. (analysis)

Diageo plc (DEO) engages in producing, distilling, brewing, bottling, packaging, distributing, developing, and marketing spirits, beer, and wine. This international dividend achiever has raised dividends for over one decade and yields 3.80%. (analysis)

Philip Morris International Inc. (PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. This dividend stock yields 5.20%. (analysis)

Sysco Corporation (SYY), through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice industry in the United States. This dividend champion has raised dividends for 40 consecutive years and yields 3.40%. (analysis)

Unilever PLC (UL) provides fast-moving consumer goods in Asia, Africa, Europe, and Latin America. This international dividend achiever has raised dividends for over one decade and yields 4.10%. (analysis)

Energy
BP p.l.c. (BP) provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. This international dividend achiever has rewarded shareholders with dividend raises for 16 consecutive years and yields 7.70%. (analysis) HOLD

Chevron Corporation (CVX) operates as an integrated energy company worldwide. This dividend achiever has raised dividends for 22 consecutive years and yields 3.90%. (analysis)

Enbridge Energy Partners, L.P. (EEQ) owns and operates crude oil and liquid petroleum transportation and storage assets, as well as natural gas gathering, treating, processing, transmission, and marketing assets in the United States. This dividend stock yields 8.80%.

Kinder Morgan Management, LLC (KMR) operates as an energy transportation and storage company in North America. This dividend achiever has rewarded unitholders with regular distribution increases for 13 years in a row and yields 8.10%. (analysis)

Financials
Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. This dividend aristocrat has raised dividends for 27 consecutive years and yields 2.60%. (analysis) HOLD

The Chubb Corporation (CB), through its subsidiaries, provides property and casualty insurance to businesses and individuals. This dividend aristocrat has raised dividends for 45 consecutive years and yields 2.90%. (analysis)

Cincinnati Financial Corporation (CINF), through its subsidiaries, offers property, casualty, personal, and life insurance products to businesses and individuals in the United States. This dividend aristocrat has raised dividends for 49 consecutive years and yields 5.90%. (analysis)

Hingham Institution for Savings (HIFS) provides various financial services to individuals and small businesses in Massachusetts. The company currently has nine branches and several ATM locations in Boston and southeastern Massachusetts. The board of directors has raised annual dividends for sixteen years in a row. The stock yields 3%. (analysis)

M&T Bank Corporation (MTB) operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions. This former dividend aristocrat ended its 27-year streak of consistent dividend increases in 2008. The stock yields 3.30%. (analysis) HOLD

National Retail Properties (NNN), Inc. is a publicly owned equity real estate investment trust. This dividend achiever has raised dividends for 20 consecutive years and yields 6.90%. (analysis) HOLD

Realty Income Corporation (O) engages in the acquisition and ownership of commercial retail real estate properties in the United States. This dividend achiever has raised dividends for 16 consecutive years and yields 5.60%. (analysis)

The Toronto-Dominion Bank (TD), together with its subsidiaries, provides retail and commercial banking, wealth management, and wholesale banking products and services in North America and internationally. This international dividend achiever has raised dividends for 15 consecutive years and yields 3.60%. (analysis) HOLD

Health Care

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. This dividend aristocrat has raised dividends for 47 consecutive years and yields 3.50%. (analysis)

Teleflex Incorporated (TFX) primarily develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers worldwide. This dividend champion has raised dividends for 31 consecutive years and yields 2.40%. (analysis) HOLD

Industrials

Emerson Electric Co. (EMR), a diversified global technology company, engages in designing and supplying product technology, as well as delivering engineering services and solutions to various industrial, commercial, and consumer markets worldwide. This dividend aristocrat has raised dividends for 53 consecutive years and yields 2.90%. (analysis)

W.W. Grainger (GWW), Inc. and its subsidiaries distribute facilities maintenance and other related products and services in the United States, Canada, Japan, and Mexico. This dividend aristocrat has raised dividends for 38 consecutive years and yields 2.10%. (analysis) HOLD

3M Company (MMM), together with its subsidiaries, operates as a diversified technology company worldwide. This dividend aristocrat has raised dividends for 52 consecutive years and yields 2.60%. (analysis)

United Technologies Corporation (UTX) provides technology products and services to the building systems and aerospace industries worldwide. This dividend achiever has raised dividends for 17 consecutive years and yields 2.60%. (analysis)

Illinois Tool Works Inc. (ITW) manufactures a range of industrial products and equipment worldwide. This dividend champion has raised dividends for 45 consecutive years and yields 2.70%. (analysis) HOLD

Information Technology
Automatic Data Processing, Inc. (ADP) provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers. This dividend aristocrat has raised dividends for 35 consecutive years and yields 3.30%. (analysis)

Materials

Air Products and Chemicals, Inc. (APD) offers atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide. This dividend aristocrat has raised dividends for 27 consecutive years and yields 2.90%. (analysis)

Nucor Corporation (NUE), together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. This dividend champion has raised dividends for 33 consecutive years and yields 3.40%. (analysis)

RPM International Inc. (RPM) engages in the manufacture, marketing, and sale of various specialty chemical products to industrial and consumer markets worldwide. This dividend champion has raised dividends for 33 consecutive years and yields 4.20%. (analysis)

Telecommunications

AT&T Inc. (T) provides telecommunication products and services to consumers, businesses, and other telecommunication service providers under the AT&T brand worldwide. This dividend champion has raised dividends for 33 consecutive years and yields 6.80%. (analysis) HOLD

Utilities

Consolidated Edison, Inc. (ED), through its subsidiaries, provides electric, gas, and steam utility services in the United States. This dividend aristocrat has raised dividends for 33 consecutive years and yields 5.50%. (analysis)

Dominion Resources, Inc. (D), together with its subsidiaries, engages in producing and transporting energy in the United States. This dividend stock currently yields 4.60%.

There are several companies which I hold, that no longer fit my entry criteria, although they might have fit the entry criteria at some point in the past. Building a dividend portfolio does take some time to implement. I typically have between ten to fifteen stocks which are attractively valued at any time. I also keep a list with stocks I would consider buying on dips. This list typically varies depending on market conditions. Back in 2008 and 2009 this list was rather small, and the list of attractively valued stocks was large due to depressed market prices. If a stock is very close to my entry price I might consider initiating a small position and then build my exposure from there. It is very important however to keep current on the overall market environment in order to scoop up any bargains from the waiting list.


Update Note (July 1, 2011): I have since sold off shares of BP after the dividend cut. I also sold shares in AT&T (T) as well.
Update: (January 1, 2012): I have initiated positions in EPD and OKS over the past year as well.

Full Disclosure: Long all stocks mentioned above

This post was featured in the Carnival of Personal Finance #260: Forces of Nature Edition

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