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Strategies & Market Trends : Dividend investing for retirement
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To: Investor2 who wrote (10462)11/26/2011 3:53:36 PM
From: E_K_S1 Recommendation  Read Replies (1) of 34328
 
Hi Investor2 -

I sold my MSFT last month using covered calls for a net price of $26.375. I am a buyer of MSFT below $20.00/share so it's getting close. I have been using a dividend yield of 4% as my preferred entry point for new buys.

For example, Kimberly-Clark Corporation Comm (NYSE: KMB ) now pays a 4% dividend and Waste Management, Inc. (WM) with a 4.5% dividend are both on my buy list. MSFT would need to trade down to $20.00/share to yield 4%.

If we get a EURO melt down and credit freeze like in 2008-2009 we could see many of the aristocrat dividend payers yield over 5% again. I think the more likely outcome will be the U.S. dividend payers that generate most if not all of their revenues inside the U.S. may see their dividend yield fall as foreign money may seek the safety in these U.S. companies. Companies with more global exposure (like MSFT, INTC and KMB) may see their dividend yields rise ( ie. stock prices fall) until there is some resolution to the Euro debt problem.

I also like MDU Resources Group Inc. (MDU) but at prices around $18.00/share. This would represent a 3.72% dividend yield but MDU has exposure to Oil & NG exploration through their Fidelity Exploration & Production Company and their huge NG storage and distribution regulated network. They are also U.S. based with no exposure to foreign debt problems.

MSFT and INTC are two technology companies that pay good dividends. I have reduced my INTC holdings by 30% (still a buyer below $20.00/share) and have closed out my MSFT position. Both are great companies but for me have too much global exposure with this Euro crises unresolved.

EKS
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