Monday, June 18, 2018

Five Dividend Increases From Last Week

As part of my monitoring process, I review the list of dividend increases every week. I usually focus on the dividend increases for companies with a status of a dividend contender. A dividend contender is a company which has managed to grow its dividend for at least ten years in a row.

After I come up with a list of companies, I do a brief review of the most recent dividend increase relative to the ten year average. It is helpful to see whether dividend growth is staying constant or decelerating. This exercise is most helpful when done in conjunction with reviewing the dividend payout ratio, in order to check for dividend safety.

I also find it very helpful to review trends in earnings per share over the past decade, in order to determine if the business is growing or stagnant. The dividend investor has to be careful about noise in the data. This means that the information presented always needs to be put in the context of the type of business we are reviewing, and also through the lens of the big picture.

Last but not least, I also review valuations. Putting all of those pieces together has been invaluable for me in selecting investments for my dividend machine.

The five companies that raised dividends over the past week include:

Thursday, June 14, 2018

Historical Performance Of The Dividend Kings List

The dividend kings list includes the most elite dividend growth companies in the US. A dividend king is a company that has managed to increase its dividends to shareholders for at least 50 years in a row.

This is a testament to the endurance and resilience of those businesses over the past 50 years. This great track record make each dividend king an excellent case study on what makes for a successful and lasting investment.

I first came up with the term dividend king in 2010. Since then, there have been hundreds of copycats who talk about the concept, without even giving me any credit.

For the purposes of today's article, I backtested the performance of the dividend kings list since the end of 2007. I used data from the compilation of historical Dividend Champions lists created by the late Dave Fish and stored by the site of Robert Allan Schwartz.

I calculated to total returns performance per year for each group of dividend kings. I assumed that portfolios were equally weighted in a tax-deferred account that qualified for commission free trades.

I followed the historical changes in the dividend kings list using information that an investor at the time would have used. Therefore, the 2008 total return was for the dividend kings available on December 31, 2007. The 2009 total return was for the dividend kings available on December 31, 2008 etc. This method assumes annual rebalancing at year-end in order to account for new additions and removals, and to equally weight the components at year-end. All of this was to ensure that this backtest doesn’t suffer from survivorship bias.

Monday, June 11, 2018

Three Dividend Growth Stocks Rewarding Shareholders With a Raise

Over the past week, there were two companies that raised dividends to shareholders. For my review, I included only those companies which have managed to grow dividends for at least a decade.

The next step involves reviewing the trends in fundamentals and dividends, in order to determine if they are sustainable. Last but not least, we also review valuations, in order to determine if the companies are worth purchasing today.

The companies include:

Philip Morris International Inc. (PM) manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. The company raised its quarterly dividend by 6.50% to $1.14/share. This marked the tenth consecutive annual dividend increase for this future dividend achiever. The company has managed to grow its quarterly distribution by 9.50%/year. Earnings per share grew from $2.75/share in 2007 to $3.88/share in 2017. Philip Morris International is expected to earn $5.21/share in 2018. Unfortunately, the company has been unable to grow earnings per share since 2012. While the shares look attractively valued at 15 times forward earnings and spot a high yield of 5.70%, the lack of earnings growth and the high forward payout ratio of 87.50% is concerning. Without growth in earnings, future dividend growth will be limited. In addition, high payout ratios increase the risk of a dividend cut. As a result, I view the stock as a hold today. I view Altria (MO) as a more attractive tobacco investment.


Lowe's Companies, Inc. (LOW),operates as a home improvement retailer in the United States, Canada, and Mexico. The company raised its quarterly dividend by 17.10% to 48 cents/share. This marked the 56th consecutive annual dividend increase for this dividend king. Over the past decade, the company has managed to grow dividends at an annual rate of 19.30%/year. Over the past decade, the company has managed to grow earnings per share by 8.20%/year to $4.09/share in 2018. Lowe's is expected to earn $5.45/share in 2019. Right now, the stock is richly valued at 18.40 times forward earnings and yields 2%.

Helmerich & Payne, Inc. (HP) primarily engages in drilling oil and gas wells for exploration and production companies. The company operates through U.S. Land, Offshore, and International Land segments. The company raised its quarterly dividend by 1.40% to 71 cents/share. This dividend champion has raised distributions for 46 years in a row. The ten year dividend growth rate is 31.60%/year. However, the rate of dividend increases since 2014 very slow, due to the slowdown in the energy sector. The stock is overvalued, given the forward earnings of $0.10/share for 2018. This is a far cry from the highest earnings of $6.65/share, achieved in 2013. In addition, the dividend doesn’t seem sustainable either. The new yield is 4.30%, though I do not believe it to be sustainable at the current rate of earnings. It is challenging to value companies with cyclical business models, because they earn most at the top of the cycle, which makes them appear cheaper than they are. At the bottom of the cycle, most of these companies tend to have very low earnings ( or even losses), which makes them to appear more expensive than their intrinsic value.

Relevant Articles:

The ten year dividend growth requirement
Not all P/E ratios are created equal
Look beyond P/E ratios dividend investors
Getting Started – The Hardest Part About Dividend Investing
39 Dividend Champions To Consider

Thursday, June 7, 2018

Five Consumer Staples to Consider On Dips

The other day, I shared with you a list of four attractively valued consumer staples for further review. The companies had attractive valuations, a record of dividend and earnings growth, and well covered distributions.

Today, I will share with you a short list of a few consumer staples with good track records of dividend growth and solid earnings growth. Unfortunately, these shares are overvalued today or are close to the top of the valuation range. In general, I prefer to buy shares at a P/E ratio below 20. However, the lower the entry price, the better my chances of earning good returns and locking in a higher yield from the start.

The companies I am considering on dips include:

The Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. It operates through four segments: Cleaning, Household, Lifestyle, and International. The company is a dividend aristocrat, with a 41 year history of annual dividend increases. Over the past decade, it has managed to increase its dividends at a rate of 8%/year. Earnings per share grew at an annual rate of 8%/year over the past decade to $5.35/share in 2017.The company is expected to earn $6.19/share in 2018. The stock is selling at 19.70 times forward earnings and yields 3.15%. I see it as attractive below $107/share. Check my analysis of Clorox for more information about the company.

Monday, June 4, 2018

Four Cheap Consumer Staples For Dividend Investors

The consumer staples sector has been hated by investors over the past year or two. There are several headwinds that appear to have depressed the share prices for many quality consumer staples with reliable dividend payments. Some of these headwinds include slowing growth, threats of product obsolescence, rising interest rate and a general decrease in investor demand for these securities.

I believe that investors are overly conservative in their expectations for consumer staples today, which is why the valuations are overshooting on the downside. This is in stark contrast to the situation in 2016, when valuations were overshooting to the upside.

The market is a manic-depressive entity. Back in 2016, consumer staple stocks were red-hot and selling at high valuations relative to their growth prospects. Investors were bidding them up and happy to pay 25 – 30 times forward earnings. For example, back in 2016, General Mills was expected to earn roughly $3/share and sold as high as $69/share for a cool 23 times forward earnings.

Right now, General Mills (GIS) is still expected to earn roughly $3/share, but is selling for $42/share, for a cheap 14 times forward earnings. The business prospects for the entity were equally grim in 2016 and in 2018. The only thing that changed is the investor perception of the entity. This rosy perception triggered investors to be excited and willing to overpay dearly at 23 times earnings in 2016 for a business that was not growing. Once the perception became grimmer, investors were unwilling to pay even 14 times forward earnings in 2018 for the same entity, with the same prospects. The problem with General Mills today is that earnings per share have not grown since 2011.

Therefore future dividend growth will be limited and the return will be dependent on the dividend yield plus a potential expansion of the P/E multiple. This is why I see it as a hold.

In general, I try to buy into companies with growing earnings and dividends, and hold on to them for years, rather than try and “forecast” whether the P/E multiple will shrink or expand. However, if management turns the ship around and ekes out some growth in earnings and revenues, shareholders will be rewarded well.

After performing some reviews, I came up with a list of companies in the consumer staples sector, which are attractively priced today. I believe that each one of these companies has sustainable dividends. Each one of those companies is also growing earnings per share, which will be helpful for future dividend growth and to increase the intrinsic value of our share investments over time. All of those companies are priced below 20 times forward earnings.

Sunday, June 3, 2018

RIP David Fish

I just learned that David Fish, who was the creator of the Dividend Champions, Contenders and Challengers list, passed away last month at the age of 68. This is a link to his obituary.

David Fish was a generous and kind man, who shared his research with dividend investors. He created, updated and freely shared the CCC list for over a decade, without expecting anything in return. Updating the list on a monthly basis for over ten years was definitely a painstaking process. His work definitely helped a lot of dividend growth investors out there, who have benefited tremendously from this research.

This type of a quiet individual, who works hard to selflessly help others is a rarity!

This is tragic news. He will be missed!

RIP David Fish




You may sign the guestbook to honor his memory.

PS: You can read his bio on the Moneypaper website from here. David Fish was a former accountant, turned investment writer and a co-manager of the MP63 Fund (DRIPX), which has beaten the S&P 500 since its inception

Thursday, May 31, 2018

Best Dividend Investing Articles For May

For your reading enjoyment, I have highlighted several articles that the readers found of particular interest this month. I have included the article title, as well as a short description.


38 Dividend Champions To Consider
As part of my investing process, I screen the list of dividend champions every month, looking for companies to add to my dividend portfolio. In this article, I discussed the entry criteria I used to come up with the list of 38 dividend champions for further research. I believe that the ability to develop a strategy to achieve your goals, and sticking to it is very important.

The ability to follow your strategy and making regular investments is very important. By buying stock regularly, you are dollar cost averaging your way into building your dividend machine. You are building your future income stream one investment at a time. The next step is the hard one – holding patiently for the long-term and reinvesting that dividend income during the accumulation phase.


Dividends Provide a Tax-Efficient Form of Income
In this article, I discuss the tax treatment of qualified dividends for US investors. Qualified dividend income receives a better tax treatment than wage income. Depending on your taxable income, you may end up without any taxable liability to the IRS if certain conditions are met. For my retirement strategy, I plan to live off qualified dividends to pay for expenses. For married couple today with no other forms of income, a qualified dividend income below $101,200 results in a zero tax rate at the Federal Level.


Three Dividend Growth Stocks Delivering Higher Returns To Shareholders
I discussed three companies that raised distributions to their shareholders over the preceding week. As part of my monitoring process, I review the list of dividend increases every week. I use this exercise to check up on my holdings, and to get a feel for the rate of dividend increases for companies I may be interested in at some price point.


Five Dividend Contenders Raising The Bar
I discussed five companies which boosted dividends to their shareholders. I also discussed the general guidelines I utilize when reviewing any group of dividend growth stocks, be it the list of weekly dividend increases or the list of dividend champions. All of those guidelines help me get an adequate margin of safety when selecting companies for my dividend growth portfolio.

Relevant Articles:

2018 Dividend Kings List


Tuesday, May 29, 2018

Five Dividend Stocks Working Hard For Their Owners

I review the list of dividend increases weekly, in order to monitor existing holdings and review companies on my list for accumulation at the right price. This exercise is part of my monitoring process.

It is helpful to check the rate of dividend growth relative to the historical average. In addition, it is helpful to see the earnings performance over the past decade. Looking at these two variables shows me whether there is room for further dividend growth, and whether I should spend my time digging further into a corporation.

I also find it helpful to review valuation, in order to acquire that future income stream at a discount. I review current P/E ratios relative to earnings growth expectations and current dividend yields. I use valuation as a tool to compare between different companies.

For the weekly review of dividend increases, I focus only on the companies that have managed to rewards shareholders with a raise for at least ten years in a row. That way, I focus on companies that have managed to boost dividends throughout a whole economic cycle of expansion and contraction. This indicates a higher likelihood that those businesses are resilient.

Over the past week, there were five companies which raised dividends and have a long track record of annual dividend increases. The companies include:

Thursday, May 24, 2018

38 Dividend Champions To Consider

In order to succeed in dividend investing, you need to have a long-term focus, follow your strategy by making investments at regular intervals and by diversifying your exposure. I believe that the ability to sit tight for a long period of time is underrated, because short-term noise usually gets in the way by scaring off the inexperienced into mindless trading action.

I also believe that the ability to develop a strategy to achieve your goals, and sticking to it no matter what happens, is very important. The inability to develop a strategy would lead to chasing hot tips, and never really learning what works for you and what doesn’t ( while losing a lot of hard-earned money in the process).

The ability to follow your strategy and making regular investments is very important. By buying stock regularly, you are dollar cost averaging your way into building your dividend machine. You are building your future income stream one investment at a time. The next step is the hard one – holding patiently for the long-term and reinvesting that dividend income during the accumulation phase.

As part of my investing process, I screen the list of dividend champions every month, looking for companies to add to my dividend portfolio. I focus on the following criteria, in order to come up with a list of companies for further consideration:

Monday, May 21, 2018

Three Dividend Growth Stocks Delivering Higher Returns To Shareholders

As part of my monitoring process, I review the list of dividend increases every week. I use this exercise to check up on my holdings, and to get a feel for the rate of dividend increases for companies I may be interested in at some price point.

I try to focus on companies that have raised distributions for at least a decade. I have found that the ten year requirement tends to remove a lot of companies which fail at getting serious about establishing a serious track record of annual dividend increases.

I then review the rate of the most recent dividend increase relative the ten year average. I have found that the latest dividend hikes in percentage terms reflect management expectations for near-term growth.

I also want to review the growth in earnings per share over the past decade, in order to determine whether dividend growth is sustainable or is running on fumes.

Last but not least, we also want to determine whether the valuation is attractive. In general, we want a good balance between valuation and the growth trajectory of fundamentals.

Over the past week, there were three companies which raised dividends to their shareholders and have managed to increase dividends for at least ten years in a row. The companies include:

Friday, May 18, 2018

Cardinal Health (CAH) Dividend Stock Analysis

Cardinal Health, Inc. (CAH) is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices worldwide. The company provides clinically-proven medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency from hospital to home. Cardinal Health connects patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management.

Cardinal Health is a dividend aristocrat, which has managed to reward shareholders with a dividend increase for 34 consecutive years. The last dividend increase was just last week, when the board of directors approved a 3% increase in the company’s quarterly dividend to 47.63 cents/share. This was the second dividend increase in a row of 3%. The slow rate of recent dividend hikes for two years in a row suggests that management sees turbulence ahead for the company’s business.

Cardinal Health has delivered an annualized total return of 5.18%/year over the past decade to its shareholders. The returns over the next decade could be better than the growth rate of earnings per share, due to the low valuation today.

Wednesday, May 16, 2018

Two Buy Stories from the Q2 Earnings Season


The following is a guest post from Mike, a former private banker and passionate investor blogging at The Dividend Guy Blog and founder of Dividend Stocks Rock.

In May, we often read a bunch of articles about stats telling us to sell away and come back in the fall. As a dividend growth investor, I always found those stories strange. After all, why would I sacrifice one or two dividend payments from my favorite stocks just because *they might* lose in value? So while others are selling, I’m keeping a close eye on the market to find buy stories.

Over the past month, I went through hundreds of quarterly earnings to find the most interesting stocks on the market. I’ve found many stories I liked, and I wanted to share 2 Kings stories with a happy ending for your portfolio. 

#1 The King with a Knee on the Floor


Source: Ycharts

Monday, May 14, 2018

Five Dividend Contenders Raising The Bar

As part of my monitoring process I review the list of dividend increases every week. I filter out the companies that have not reached dividend contender or dividend achiever status yet. I do this in order to focus on those companies that have a long track record which spans a period that covers a recession and an expansion.

The next step in the process involves reviewing the rate of most recent dividend increase relative to the ten year average. I have found that the rate of the latest dividend increase usually shows the confidence in near term business prospects for the company.

I also like to review trends in historical dividend growth relative to the trends in earnings per share during the same time periods. In general, we want roughly similar rates of earnings and dividend growth over time. However, there are individual exceptions for companies in the initial phases of dividend growth which tend to start off from a lower dividend payout ratio. In general, it is helpful to see an upward trend in earnings per share over time. Future dividend payments can be in danger when we have flat or declining earnings per share.

Last but not least, I also like to see quality companies available at attractive valuations. I try to avoid overpaying for future income streams. In order to do that, I have some pre-set maximum P/E ratios I will pay for a stock.

These are the general guidelines I utilize when reviewing any group of dividend growth stocks, be it the list of weekly dividend increases or the list of dividend champions. All of those guidelines help me get an adequate margin of safety when selecting companies for my dividend growth portfolio.
Over the past week, there were five dividend contender companies that raised dividends by more than a token amount. The companies include:

Thursday, May 10, 2018

Paychex Dividend Stock Analysis

Paychex, Inc. (PAYX) provides payroll, human resource (HR), retirement, and insurance services for small to medium-sized businesses in the United States and Germany. The company is a dividend challenger, which has rewarded shareholders with an annual dividend raise since 2010. Paychex was a dividend achiever until 2009, when it stopped raising dividends during the Global Financial Crisis.

Last week, the company announced that its board of directors approved a $0.06 increase in the company’s regular quarterly dividend, an increase of 12 percent. The dividend will go from $.50 per share to $0.56 per share.

“This dividend increase demonstrates our commitment to providing a benefit to our shareholders as a result of the Tax Cuts and Jobs Act (TCJA) and continues the company’s history of providing outstanding shareholder value and a leading dividend yield,” said Martin Mucci, Paychex president and CEO. “Paychex is uniquely positioned in our industry to benefit from the TCJA due to our strong margins. As we realize these tax benefits, we continue to invest in strategic growth opportunities. These investments, combined with our financial strength, enable us to expand the returns we deliver to our shareholders.”

Over the past decade, this dividend growth stock has compounded shareholder wealth at an annual rate of 9.40%/year.


Monday, May 7, 2018

Church & Dwight (CHD) Dividend Stocks Analysis

Church & Dwight Co., Inc. (CHD) develops, manufactures, and markets household, personal care, and specialty products. The company operates through three segments: Consumer Domestic, Consumer International, and the Specialty Products Division. The company is a dividend achiever, which has increased distributions for 22 years in a row.

Back in February, the Board of Directors approved a 14% increase in the quarterly dividend to 21.75 cents/share.

Over the past decade, this dividend growth stock has delivered an annualized total return of 14.60% to its shareholders.


Thursday, May 3, 2018

Dividends Provide a Tax-Efficient Form of Income

A famous saying goes that there are two things certain in this world: death and taxes. While I am pretty sure I can’t escape death, I know that I can try to legally minimize taxes as much as possible. I hate paying more taxes than I have to. In a previous series of articles I discussed how I am maxing out tax-deferred accounts today, in order to minimize my tax liabilities as much as possible. In addition, I am trying to get a deduction today, and then roll these amounts into Roth and try to pay as close to zero percent on the conversion as possible. The amounts in tax-deferred accounts will be the tip of the iceberg, or the “safety net” in case my main strategy experiences turbulence. In effect, these tax-deferred accounts are equivalent to an emergency fund for my retirement.

However, I think I didn't stress enough the fact that most of my income in retirement would be coming from qualified dividends. This will be my bread and butter, because dividends provide the best tax-efficient method of income in the US.

Did you know that if you were single, and your taxable income does not exceed $38,600 in 2018, you would owe zero dollars in Federal taxes on your qualified dividend income? If you were married, filing jointly, you won’t owe a dime in taxes on qualified dividends at the Federal level as long as your taxable income does not exceed $77,200.

Tuesday, May 1, 2018

Five Tips to Avoid Dividend Cuts

Have you ever held a stock that eventually cut its dividend?

Or do you worry that a company you own might have to reduce its dividend in the future?

If so, you aren’t alone.

Most of the dividend investors I know are focused on building a safe income stream (typically for retirement) and want to preserve their capital.

Avoiding dividend cuts can help with both objectives, and in this article I will explore five techniques that can help identify companies with the best potential of delivering safe, growing dividends over time. 

But first, I want to thank Dividend Growth Investor for letting me share with you.

His blog has been an inspiration and a wealth of quality information for dividend investors for nearly a decade, and it’s an honor to be part of it today.

Let’s take a look at five of the most important factors you can use to understand the safety of a company’s dividend and make better informed investment decisions.

Monday, April 30, 2018

Ten Dividend Growth Stocks Working Hard For Their Owners

As part of my monitoring process, I review the list of dividend increases every week. This process is helpful in observing how my investments are performing. This process is also helpful in monitoring companies on my watchlist for a potential addition to the portfolio.

I start by focusing my attention on companies that have managed to boost distributions for at least a decade. The next step includes reviewing each company, in order to compare the latest dividend increase against the ten year performance in terms of annual dividend growth. It is helpful to see if a company is accelerating or decelerating its rate of annual dividend growth from year to year.

The next step involves reviewing trends in earnings per share. In an ideal world, we would want earnings and dividends to be rising in tandem. While there will be some differences from a period to period due to one-time items, we want those two indicators to be growing in sync. Otherwise, a growth in dividends that is not supported by growth in earnings per share would show the investor that the dividend streak may be in jeopardy. Reviewing the payout ratio is helpful, in order to determine dividend safety. I review the payout ratio as an absolute number, and also by reviewing ten year trends in this ratio.

The last step to consider involves looking at valuation. I believe that even the best company in the world is not worth overpaying for. You want to have an adequate margin of safety when investing in a solid blue chip dividend payer.

The companies that raised dividends last week include:

Saturday, April 28, 2018

Best Dividend Investing Articles For April

For your reading enjoyment, I have highlighted several articles that the readers found of particular interest this month. I have included the article title, as well as a short description.

How to Generate a 15% Yield on Cost in Ten Years

I highlighted the real story of one investor who put some money to work in a popular REIT a decade ago. After that, they automatically reinvested dividends for a decade, and they left their investment alone. After a decade of dividend growth and patient dividend reinvestment, this investment is generating an yield on cost of 15%.

Four Dividend Growth Stocks Rewarding Shareholders With A Raise

I highlighted several dividend growth stocks which rewarded their shareholders with a raise in April. There are some prominent and widely held companies on that list. It is important to keep monitoring investments for changes in fundamentals.

Are you ready for the next bear market?

After a 9 year bull market, it is hard to imagine share prices declining and staying low for more than a few months. Despite the fact that we are long-term investors we have to be prepared for the eventual bear markets. This is where focusing on company fundamentals such as earnings and dividends can be helpful in staying the course. The beauty of dividend investing is that in retirement you are living off dividends, and do not have to sell shares. This means that investors in the accumulation phase should be praying for lower prices, while retired investors should largely ignore stock prices and focus on the stability of their dividend income stream. This is why we focus so much on analyzing what we own, and making sure that the dividends are safe and that the assets we own are acquired at an attractive value.

Three Cheap Dividend Stocks To Consider

I highlighted three dividend paying companies, which sell at bargain prices today. Fears of Amazon entering the drug distribution market have plagued the share prices for these companies. According to recent reports I have read, Amazon has shelved plans to sells drugs to hospitals. That’s because these companies may have some competitive advantages that would take quite a few obstacles for a new incumbent such as Amazon. Selling drugs online is a different business from selling books online.

Thank you for reading!

Relevant Articles:

- 2018 Dividend Kings List

Friday, April 27, 2018

Johnson & Johnson: My Favorite Dividend King For Reliable Dividend Growth And Income

Johnson & Johnson (JNJ), together with its subsidiaries, is engaged 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 & Diagnostics. This dividend king has paid dividends since 1944 and has managed to increase them for 56 years in a row. Dividend increases have been like clockwork every year for decades.

The company's latest dividend increase was announced in April 2018 when the Board of Directors approved a 7.10% increase in the quarterly dividend to 90 cents /share.

Over the past decade this dividend growth stock has delivered an annualized total return of 9.80% to its shareholders.


The company has managed to deliver 4.10% average increase in annual EPS over the past decade, which was slower than the rate of dividend growth. Johnson & Johnson is expected to earn $8.12 per share in 2018 and $8.57 per share in 2019. In comparison, the company earned $5.41/share in 2017 ( adjusted for the provisional amount of $4.94/share associated with the recent enactment of tax legislation)

Wednesday, April 25, 2018

Kimberly Clark (KMB) Dividend Stock Analysis

Kimberly-Clark Corporation (KMB), manufactures and markets personal care, consumer tissue, and health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional, and Health Care. This dividend champion has paid dividends since 1935 and has increased them for 46 years in a row. The company’s peer group includes Procter & Gamble (PG), Colgate-Palmolive (CL), and Clorox (CLX).

The company’s last dividend increase was in January 2018 when the Board of Directors approved a 3.10% increase in the quarterly annual dividend to $1/share.

Over the past decade this dividend growth stock has delivered an annualized total return of  9.50% to its shareholders.


Monday, April 23, 2018

Five Dividend Growth Stocks Boosting Shareholder Distributions

I review the list of dividend increases every single week as part of my portfolio monitoring process. It is helpful to see dividend growth in action for companies I own, and also for companies I may consider owning at the right valuation. I usually focus my attention on companies which have rewarded shareholders with a raise for at least ten years in a row. I ignore the rest for a few years ( until they meet the required dividend streak)

In the past week, there were five dividend paying companies that raised dividends to their shareholders that met the criteria stated above. I reviewed every company, outlining their dividend track record in terms of length and rate of change. I also reviewed the changes in fundamentals, in order to determine if the dividend growth is sustainable. Last, but not least, I also review the valuation for attractiveness. All of these points should be viewed all at once, in order to get the best picture of investment reality.

The companies include:

Thursday, April 19, 2018

Tobacco Companies Offer An Opportunity For Income Investors

I was reviewing my portfolio today, and noticed that tobacco companies are getting smoked this morning. Phillip Morris International is down 16% as of the time of this writing, while Altria is down 8%.

Altria yields close to 5% today, and sells at a forward P/E of 14.20. PMI also yields 5% and sells at a forward P/E of 16.20.

I believe that this is an overreaction to the slight revenue miss by Phillip Morris International this morning. I also believe that these stocks could get lower today too. As a result, I believe that there is some opportunity to start reviewing tobacco companies for further research. I am going to look closely into adding more shares on the way down. 

I already own too much Phillip Morris International (PM), but I do want to add some more to Altria (MO).

You may check my last analysis of Altria here:

That being said, it is better to slowly add to positions over time, and not put everything at once. This is a risk management technique I learned during the 2007 - 2009 bear market.
Thank you for reading!


Wednesday, April 18, 2018

Three Cheap Dividend Stocks To Consider

I wanted to send in a quick note to readers about an interesting recent development. According to recent reports I have read, Amazon has shelved plans to sells drugs to hospitals. Fears of Amazon have plagued the share prices for companies such as Cardinal Health (CAH), CVS Health (CVS) and Walgreen's (WBA).

Selling pharmaceuticals is a different business from selling books online. You cannot simply ship them using Fedex or UPS. Amazon would need to build a more sophisticated logistics network that can handle temperature-sensitive pharmaceutical products. Before that however, it needs to build the trust of big hospitals first.

In addition, Amazon is not able to sell products, such as pacemakers, which are directly implanted in the human body. As a result, it does not have the ability to become a vendor that offers complete solutions to hospitals.

Amazon had found it difficult to sell and distribute pharmaceutical products.Amazon has not been able to convince big hospitals to change their traditional purchasing process, which typically involves a number of middlemen and loyal relationships.

The health-care supply chain is well-entrenched and will be hard to break into. The hospital and health-care systems have entangling alliances with their existing purchasing and supply chain partners.

Monday, April 16, 2018

Four Dividend Growth Stocks Rewarding Shareholders With A Raise

As part of my monitoring process I review the list of dividend increases every single week. I use this exercise to check on the health of companies I own. I also check the list of dividend increases as part of my overall monitoring of companies I am reviewing for potential addition to my dividend portfolio.

I do find it helpful to narrow the list down by focusing only on the companies that have raised distributions every single year for at least a decade. Next, I tried to discuss each company and provide some helpful stats in order to determine if they look promising under certain circumstances.

The fact that a company that has raised dividends for a decade is just the first step in the process for further research. Making sure that those dividend increases are as a result of improving fundamentals is important. Equally important is making sure that the dividend company in question is also attractively valued.

Over the past week, there were four companies that raised dividends to their shareholders. Each one of those companies has managed to boost distributions for at least ten years in a row. The companies include:

Thursday, April 12, 2018

McCormick & Company (MKC) Dividend Stock Analysis

McCormick & Company (MKC) engages in the manufacture, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates in two segments, Consumer and Industrial. This dividend aristocrat has paid dividends since 1925 and has increased them for 32 years in a row.

The company’s latest dividend increase was announced in November 2017 when the Board of Directors approved a 10.60% increase in the quarterly annual dividend to 52 cents /share.

Over the past decade this dividend growth stock has delivered an annualized total return of 13.40% to its shareholders.

Monday, April 9, 2018

How to Generate a 15% Yield on Cost in Ten Years

A few years ago I shared the story of one small investment of a beginner income investor I met at the beginning of my own dividend journey. This story shows that anyone can start learning investing, no matter what age, level of money they can set aside. All that truly matters is having the right attitude that you can achieve anything you set your mind to, through hard work, persistence, patience and determination. Of course, the most important thing about dividend investing is to get started.

You do not need a lot of money to get started with dividend investing. One should never despise the days of small beginnings, and think that they need a large pike of cash before starting dividend investing. If you start slowly, even with an investment of a few dollars, you are years ahead of most other individuals. Unless you are drowning in debt, you do not have any excuse to avoid investing in some of the strongest dividend paying blue chips today. With brokerages like Robinhood, it is possible to purchase shares in companies you like without paying any commission. Of course, you should increase the amounts you put to work for you as your level of income increases over time. Otherwise, you would need to spend a higher amount of time working prior to accumulating a sufficient nest egg.

So back in May 2008, my young friend opened an account with Sharebuilder with $40 that he had to his name. He paid a steep $4 commission, but managed to purchase 1.4196 shares of Realty Income (O) at 25.36/share. Being a poor college student, he was low on cash so he took advantage of a brokerage deal at Sharebuilder. As part of the deal, he received a $50 cash bonus for opening an account and making one investment. So after he made the investment, he essentially started playing with the house’s money, as he had no funds at risk after the rebate.

Thursday, April 5, 2018

Aflac (AFL) Dividend Stock Analysis

Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance. The company is a member of the dividend aristocrats’ index, has paid dividends since 1973 and increased them for 36 years in a row.

The company’s last dividend increase was in February 2018 when the Board of Directors approved a 15.60% increase in the company’s quarterly dividend to 26 cents/share. The company’s stock recently split 2:1 as well. The company’s largest competitors include Nippon Life Insurance Company, Asahi Mutual Life Insurance Company and American fidelity Assurance Company.

Over the past decade this dividend growth stock has delivered an annualized total return of 5.40% to its shareholders.


Tuesday, April 3, 2018

Are you ready for the next bear market?

It is not a secret that stock prices have been rising for 8 - 9 years in a row now. This makes it easy to hold on to stocks, and believe that we will have smooth sailing until we reach our goals and objectives.

In my investing, I do like to think about different scenarios. What if my quoted portfolio goes down by 50% in 2018?

I know a lot of investors who are focusing only on total returns would be unhappy. Imagine if you saved for 20 years, and accumulated a net worth of $1 million. Then boom – in one year, half of your net worth, blood,sweat and tears – gone. Would you panic?

I myself would likely be indifferent to a 50% stock price drop. As a dividend investor, I am somewhat insulated from stock price fluctuations. This is because I focus on the earnings power of the business, and the dividend payments that the businesses in my portfolio generates. It is very comforting to keep receiving cash, even when the quoted value of investments throughout the world is falling. When everyone else is hurting, I have the luxury of generating cash from my investments, which I can then deploy at ridiculously low valuations. As long as the underlying fundamentals of the businesses I own are intact, I can ignore stock price fluctuations. This is one of the most important traits of successful dividend investors. Those who do not understand that, are usually the ones that have not made any money in stocks to begin with.

Sunday, April 1, 2018

Help! I have a serious spending addiction

I have a serious spending addiction – any time I find myself with some extra cash on hand, I end up spending it. This is particularly troublesome, as I tend to salivate when I see an item that I really want.

Anytime there is a big sale, especially one with large markdowns, my spending problem comes out on the surface and I sometimes go through all of my cash on hand and sometimes even borrow money to spend. The exhilarating feeling of spending my cash is similar to probably what a drug addict feels when they get their daily dose. I look at the list of items I spent my money on, and it provides me with an internal sense of happiness and accomplishment. Sometimes, I even look for ways to save money from recurring expenses in order to have more money to spend. I am often scrambling to find enough cash, as I always have at least 15 – 20 deals on my radar, just waiting to be purchased.

I spend a large portion of my monthly income on dividend paying stocks. I willingly spend my money on dividend stocks because I know that I am contributing towards my retirement goals. I view every dollar that I can invest in a quality dividend stock at attractive valuation such as PepsiCo (PEP), Altria (MO) or Johnson & Johnson (JNJ), will work hard for me and produce several more dollars over their lifetime for me.

Wednesday, March 28, 2018

39 Dividend Champions To Consider

As part of my screening process, I look at the list of dividend champions every month. I have been doing this for a decade.

I believe that investors should focus on tools within their control. These things include their ability to stick to a strategy that will help them reach their goals, and save and invest money regularly. This is the recipe for successful dividend investing in a nutshell – stay the course, keep adding to your dividend machine and reinvest dividends in the accumulation phase.

Over the past two months, prices of many securities have finally started going lower. This is great news for those who are in the accumulation phase. This is because lower prices paid for stocks result in higher dividend yields and higher expected future returns. Therefore, the investors today should be praying for even lower prices. If you are retired, your only concern is the safety of the dividend payments, and enjoying the fruits of your labor.

I applied my entry criteria to the list of dividend champions, and came up with a list of companies worth further research.

My screening criteria include:

1) A company with a minimum 25 year track record of annual dividend increases
2) Forward P/E ratio below 20
3) Forward Dividend payout ratio below 60%
4) Annual dividend growth exceeding inflation over the past 5 and 10 years
5) Dividend growth generated by solid growth in earnings per share

My next step was to briefly review the trends in fundamentals for each of the companies, and taking out those that didn’t seem promising enough.

As a result of this review, I came up with the following list of 39 dividend champions for further research:

Monday, March 26, 2018

Raytheon Rewards Shareholders With Reliable Dividend Raises

Raytheon Company (RTN) develops integrated products, services, and solutions for defense and other government markets worldwide. It operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.

Last week, the Board of Directors of Raytheon Company (RTN) increased the company's annual dividend payout rate by 8.8 percent, from $3.19 to $3.47 per share.

"With today's announcement, we have increased our annual dividend for 14 consecutive years," said Thomas A. Kennedy, Raytheon Chairman and CEO. "The dividend increase is a key part of our capital deployment strategy, and reflects our confidence in the company's growth outlook and our continued focus on creating value for shareholders."

Over the past decade, this dividend achiever has managed to boost dividends at an annual rate of 12%/year. At a rate of 12%/year, dividends per share double every 6 years, using the rule of 72.


Friday, March 23, 2018

W.P Carey (WPC): A High Dividend Dividend REIT For Current Income

W. P. Carey Inc. (WPC) is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The firm primarily invests in commercial properties that are generally triple-net leased to single corporate tenants including office, warehouse, industrial, logistics, retail, hotel, R&D, and self-storage properties.

W.P. Carey is a dividend achiever, which has managed to boost dividends for 20 years in a row.  The most recent dividend increase was just last week, when the Board of Directors increased its quarterly cash dividend to $1.015 per share, equivalent to an annualized dividend rate of $4.06 per share. The attitude towards distributions was summarized quite well by the statement of W. P. Carey's CEO Jason Fox:

"W. P. Carey has delivered consecutive annual dividend increases since going public in 1998. We are proud of our long-standing track record of providing shareholders with stable and recurring income generation across all market cycles,"

In September 2012, this dividend achiever converted from a partnership form into a real estate investment trust. After this transformation, as well as merger with one of its privately managed REIT, dividend growth has been spectacular initially.Subsequently, it to slowed down  and I expect it to be slow for the foreseeable decade.

The company not only invests in triple-net lease properties throughout the world, but it also managed privately held REITs. As a result, its sources of revenues are derived from the stable and recurring rents from those properties, which are usually leased to tenants under long-term leases. Those triple-net leases also allow for rent escalation over time. Under a triple-net lease, the tenant is required to pay all expenditures associated with maintaining and operating the property under lease.

Wednesday, March 21, 2018

CVS Health (CVS) Dividend Stock Analysis

CVS Health Corporation (CVS), together with its subsidiaries, provides integrated pharmacy health care services. It operates through Pharmacy Services and Retail/LTC segments. The Pharmacy Services Segment provides a range of pharmacy benefit management (PBM) solutions. The Retail Pharmacy segment includes retail drugstores, online retail pharmacy Websites and its retail healthcare clinics. This dividend achiever has paid a dividend since 1916 and increased it for 14 years in a row.

The most recent dividend increase was in December 2016, when the Board of Directors approved a 17.60% increase in the quarterly dividend to 50 cents/share. Pending the company's acquisition of insurer Aetna (AET), the board has stopped the share buybacks and dividend increases. While the company is not going to grow dividends every year, because it will focus on debt repayment, I find its valuation compelling enough to give it preference over Walgreen Boots Alliance (WBA).

The largest competitors for Walgreen include Walgreen Boots Alliance (NYSE:WBA), Wal-Mart (NYSE:WMT) and Rite-Aid (NYSE:RAD).

Over the past decade this dividend growth stock has delivered an annualized total return of 6.90% to its shareholders. Future returns will be dependent on growth in earnings and dividend yields obtained by shareholders.

Monday, March 19, 2018

Realty Income Delivers High Yields and Dependable Dividend Growth

Realty Income (O) is a real estate investment trust, which invests in commercial properties. The REIT owned 5,172 properties at the end of 2017, most of which were single-tenant ones. Realty Income has a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.50 years. These are triple-net leases, where the tenant pays everything from taxes to maintenance on the property, while the landlord like Realty Income collects rent that escalates over time. It is a pretty sweet deal, provided that you can purchase great locations at attractive valuations.

I analyzed the REIT using the guidelines listed in this post. The guidelines include focusing on:

  • Valuations
  • FFO trends
  • Occupancy
  • Tenant Concentration
  • Streak Consecutive Annual Dividend Increases

Realty Income is a dividend achiever which has raised dividends for 24 years in a row. The REIT has a strong track record of paying dividends monthly, and raising them several times per year. It is the Golden Standard of Triple Net Leases. The company usually raises its monthly dividends every quarter by a little bit, which amounts to a respectable year-over-year raise. The latest raise was just last week, as the monthly distribution was boosted to 21.95 cents/share ( or $2.628/share annualized). This was the 96th dividend increase since Realty Income's listing on the NYSE in 1994. The new dividend is 4% higher than the dividend paid during the same time last year.


Thursday, March 15, 2018

Clorox (CLX) Dividend Stock Analysis

The Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. It operates in four segments - Cleaning, Household, Lifestyle and International. This dividend aristocrat has paid dividends since 1968 and has increased them each year since 1977.

Last month, Clorox hiked its dividend by 14% to 96 cents/share. This was an accelerated declaration of the company's dividend increase, which typically takes place in the month of May.

Over the past decade this dividend growth stock has delivered an annualized total return of 11.70% to its shareholders.


The company has managed to deliver a 5.20% average increase in annual EPS over the past decade. Clorox is expected to earn $6.13 per share in 2018 and $6.51 per share in 2019. In comparison, the company earned $5.35/share in 2017.

Monday, March 12, 2018

Four Dividend Growth Stocks Working Hard For Their Shareholders

As part of my monitoring process, I review the list of dividend increases every week. I use this list to check for dividend increases for companies I own, as well as monitor companies I am interested in researching at the right valuation.

I narrowed the list down to focus only on companies that have rewarded their shareholders with a dividend raise for at least ten years in a row. I want to focus my attention on companies that have managed to grow dividends over a full economic cycle. I also review each company, in order to determine whether past dividend growth was sustainable, and it came mostly from earnings growth. I am not interested in companies that grow dividends by mere expansion of the dividend payout ratio, while their earnings per share stagnate.

Last but not least, I look for an attractive entry valuation. Even the best company in the world is not worth buying at an inflated price. As a result, I try to avoid purchasing companies above 20 times earnings.

The companies that raised dividends over the past week, and met the above criteria include:

Friday, March 9, 2018

Hormel Foods (HRL) Dividend Stock Analysis

Hormel Foods Corporation (HRL) produces and markets various meat and food products worldwide. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.

The company is a dividend king which has managed to increase annual dividends for 52 years in a row. There are only twenty-six dividend kings in the world, which have each managed to boost annual dividends every single year for at least half a century.

Hormel’s last dividend increase was in November 2017 when the Board of Directors approved a 10.30% increase in the quarterly distribution to 18.75 cents/share.

Hormel’s largest competitors include Tyson Foods (TSN), Conagra Foods (CAG), General Mills (GIS), Campbell Soup (CPB) and J.M. Smucker (SJM).

Over the past decade this dividend growth stock has delivered an annualized total return of 14.20% to its shareholders.


Wednesday, March 7, 2018

TJX Companies (TJX) Dividend Stock Analysis

The TJX Companies, Inc. (TJX) operates as an off-price apparel and home fashions retailer in the United States and internationally. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX Europe. TJX Companies is a dividend achiever, which has raised dividends for 22
years in a row.

The most recent dividend increase was in March 2018, when the Board of Directors approved a 25% increase in the quarterly dividend to 39 cents/share.

The company’s largest competitors include Ross Stores (ROST), Kohl’s (KSS) and Target (TGT).

Over the past decade this dividend growth stock has delivered an annualized total return of 19.20% to its shareholders. Future returns will be dependent on growth in earnings and starting dividend yields obtained by shareholders.

Monday, March 5, 2018

Altria Delivers High Dividends and Strong Dividend Growth

Altria Group, Inc. (MO) manufactures and sells cigarettes, smokeless products, and wine in the United States. The company is well known in dividend growth investor circles, and is a common holding for many of us. Altria delivers dependable dividend growth and high total returns, and has been doing that for decades.

Altria raised its quarterly dividend by 6.70% to 70 cents/share just last week. This was the second dividend increase over the past year, after Altria hiked its distributions by 8.20% to 66 cents/share back in August 2017. Altria is a dividend champion, which has rewarded shareholders with a raise for the past 48 years in a row.

The company’s press release really summed it up very well:

Today’s dividend increase reflects Altria’s intention to return a large amount of cash to shareholders in the form of dividends and is consistent with Altria’s dividend payout ratio target of approximately 80% of its adjusted diluted earnings per share. Altria has increased its dividend 52 times in the past 49 years.

The company is hiking the dividends, because its tax rate is going lower. As a result, its earnings per share are increasing faster than expected, which leaves more room for further dividend increases to be shared with long-term shareholders like us.

For some strange reason, Altria was booted from the dividend aristocrats index in 2007, which is why I prefer to focus on the dividend champions list, maintained by David Fish.

The company has managed to almost double dividends per share between 2009 and 2017.

Friday, March 2, 2018

Disney (DIS) Dividend Stock Analysis

The Walt Disney Company (NYSE:DIS) operates as an entertainment company worldwide. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. The company is not a typical dividend growth stock, although it has paid dividends since 1957, and has never cut them. Disney is a dividend angel which often raises dividends several years in a row, after which it keeps them unchanged. This is followed by another round of dividend raises again.

The most recent dividend increase was in December 2017, when the Board of Directors approved a 7.70% increase in the semi-annual dividend to 84 cents/share. The largest competitors for Disney include Time Warner (NYSE:TWX), Viacom (NYSE:VIA) and Twenty-First Century Fox (NASDAQ:FOXA).

Over the past decade the stock has delivered an annualized total return of 14.20% to its shareholders. Future returns will be dependent on growth in earnings and dividend yields obtained by shareholders.

Thursday, March 1, 2018

Two Wide Moat Dividend Stocks to Consider on Dips

I like to invest in quality companies, with an established track record of dividend increases. I want to acquire these quality companies at an attractive entry price, and then see earnings per share, dividends per share and intrinsic values grow over time.

The beauty of quality companies is that you need to get one decision right – that is the ability to identify their business model, and then buy those companies in the first place without overpaying for them.

I do not want to worry about buying at a low price, and then selling at a high price. I want to make one decision, and then let these quality companies do the heavy lifting for me. My favorite holding period is forever. While some may fail, I know that by building a diversified portfolio of dividend growth stocks, I will do just fine over time.

Speaking of quality companies, there are two I have my eye on, whenever they start to look attractively valued. The companies include:

Monday, February 26, 2018

Five Dividend Growth Stocks Rewarding Shareholders With A Raise

I review the list of dividend increases every week, as part of my monitoring process. This is a helpful step that helps me check for dividend increases for companies I own. I update my dividend portfolio spreadsheet with the new dividend rates, in order to see if my portfolio’s organic dividend growth rate is increasing above the rate of inflation.

I also use this process in order to identify hidden dividend gems for further research.

I started with the list of all dividend increases for the week, and then narrowed it down by focusing only on those companies that have managed to grow dividends for at least a decade. I came up with a list of five companies for today’s review. The next step involves a brief analysis of each company, analysis of trends in earnings and dividends, followed by a brief take on valuation. The goal is to analyze not only historical dividend growth, but try to determine if it was supported by growth in fundamentals. It is helpful to evaluate the latest dividend hike against the historical dividend growth. We are looking for companies that grow earnings, grow dividends and grow intrinsic values over time. However, we also want to get those companies only if the valuation is right. Even the best company in the world is not worth overpaying for.

The five dividend growth companies which raised dividends over the past week include:

Thursday, February 22, 2018

Dividend Investors: Stay The Course

The past month has been difficult for many investors. It is during times like these that you see who really is a long-term investor, and who is just a pretender. When you are a long-term buy and hold investor, you stand the best chances to take maximum advantage of the power of compounding, and end up with the probability for the highest dividend income and capital gains. These are the times where having a disciplined approach to investing pays off. These are the times when the ability to allocate capital to use in quality dividend stocks would seem stupid in the short-term, but potentially really brilliant 10 – 20 years down the road. When stock prices fall, there is an urge in the investor to protect their nest eggs from further price impairment.

This is a dangerous situation to be in because:

Tuesday, February 20, 2018

Dividend Companies Showering Shareholders With More Cash

As part of my monitoring process, I review the list of dividend increases every week. I usually focus on companies that have managed to boost dividends to shareholders for at least a decade. It looks like this year may be classified as the year of higher dividend growth.

This is because of the new tax law, which went into effect this year. As a result of the lowering of corporate tax rates, companies are increasing the amounts of their regular dividends to shareholders, and are initiating new share buyback programs. Some companies are accelerating their dividend increases schedules, and therefore showering their shareholders with more cash. As shareholders in many prominent blue chips, we can hardly complain of course.

Over the past week, the following companies raised their dividends to shareholders:


The Sherwin-Williams Company (SHW) develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers primarily in North and South America, the Caribbean, Europe, and Asia. The company operates in four segments: Paint Stores Group, Consumer Group, Global Finishes Group, and Latin America Coatings Group. The company raised its quarterly dividend by 1.20% to 86 cents/share. This is the third dividend increase in a row of a penny per share. This increase follows 39 consecutive years of dividend increases for this dividend aristocrat. The company is prioritizing debt repayment over high dividend hikes, which seems prudent. The company has managed to hike its annual dividends at a rate of 10.40%/year over the past decade. The stock yields 0.90%. The company managed to grow its earnings per share from $4.70/share in 2007 to $15.07/share in 2017. Currently, the stock is overvalued at 26 times earnings and yields 0.90%. I would be interested in Sherwin-Williams on dips below $300/share.


Saturday, February 17, 2018

Annual Market update for 2017

Good Morning,

I wanted to share the market commentary from a dividend growth investor friend of mine, who manages money. This is not a paid post, and I do not receive any compensation from him. Rather, I have interacted with Joe off and on over the past decade. He is one of those readers who have stuck around for a while, who I regularly discuss dividend investing with. Writing about investing can be a lonely pursuit, so it is definitely helpful to have someone and bounce off ideas. 

I am sharing this market commentary, which he shared privately with his clients, because a lot of his points resonate very well with me. While no two investors are alike, his strategy of finding quality dividend payers for the long term really hits home for me. The letter captures current market sentiment, investing strategy, lessons learned and general commentary. If I ever leave blogging to manage money full time, this is the type of letter I would be sharing with clients. 

Without further delay, this is the comment letter from Joe Ferris at Summer Fields Investments LLC: Source Of Letter

Dear Friends,

2017 was a remarkable year in the equity markets. The broader US stock market did not have any negative months in the year, giving it the distinction of being the strongest market, per that metric, in 90 years [1]. Furthermore, there was no correction greater than 3% in the year, which is unusual for equities. The graphic that I included over 6 months ago has proved to be correct, for now, as we have broken out, to the upside, of a long trading channel in the S&P.

There are a number of reasons for this.

Before the presidential election in November 2016, I thought that the Blue Team would win, and that minimum wage would be gradually raised, inflation would creep up, and goods and services would earn more revenues. This would put a higher floor in our companies' earnings, spurring the market to pay a higher multiple for our companies' earnings.

Well, as we all know, the Red Team won, and now, minimum wage is being gradually raised [2], inflation is creeping up, and our company's goods and services are earning more revenues. It's funny how that happens.

There is also the matter of the large corporate tax cut, which gives our companies more after-tax profits. The market has been excited by that.

We have seen a number of US companies either attempt (in the case of Pfizer and Allergan) or execute (Medtronic, Johnson Controls, etc) foreign inversions in the past decade, so it makes sense to me that incentives should be provided for US companies to not pack up and run to lower tax regions. However, they should also have more regulations on tax avoidance, and that is indeed happening, with some companies getting rid of their tax shelters [3].

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