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Strategies & Market Trends : Dividend investing for retirement

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To: Steve Felix who wrote (24770)	6/6/2016 7:14:05 PM
From: E_K_S	Read Replies (2) of 34328

Orchids Paper Products Company (TIS) - Close to an all time high; peeled off 20% of shares Opko Health, Inc. (OPK) - upped current position by 30% The stock still yields 4.25% at the new all time high price. Foolishly I peeled off my high price shares (selling 20% of my holdings) as a hedge to raise cash to move into other sectors I am under weight on, specifically healthcare. I took those proceeds and added another 30% to my OPK position. The CEO (who is also COB) has been buying up shares and now holds over 3mln shares. So not a dividend payer, why the interest? It's about the potential of huge future FCF which when realized may/will become a dividend payer and s/d follow the types of growth and income producers we see in many of the other pharmaceutical companies. OPK's plan is to become the world's leading clinical laboratory that offers comprehensive laboratory testing services for the prevention and detection of many of the killer diseases. One of the common attributes of every sustained dividend payer are growing FCF for products and/or services that do well in any economic environment and are demand around the world. I think OPK and their medical diagnostic tests fit this description. I have been wrong before and will be wrong in the future but growing free cash flows always occur before any growth phase of a company and sustained dividends can be made. Hopefully, OPK and their management team is setting themselves up for this. At least the CEO is betting w/ the shareholders. FWIW, my TIS sale was in the taxable account and I still hold shares both in the IRA/ROTH and taxable accounts. I will buy back the TIS shares I sold if for some reason we re-visit $28.00/share or lower again (that will reflect my 5% dividend target range). EKS

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