Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (3800)	2/15/2010 6:30:59 PM
From: chowder	Respond to of 34328

I'm also of the opinion that INTC will outperform ADP in price in the coming year. I'm just not as confident in dividend increases going forward. If I were to buy another technology stock, it would be INTC though. What I try to do ... and this is just my strategy ... is to insure there is room for dividend growth. I look at the EPS and the annual dividend as it stands today. ADP - EPS $2.69 ... Annual Dividend $1.36. Almost 2-1. Enough cash to cover the dividend and have room to increase it consistently ... consistently being the key word. If forced to choose between one or the other ... I'd pick the one whose earnings cover the dividend at least 2-1 since safety and length of consecutive dividends carry a priority with me. INTC - EPS $0.77 ... Annual Dividend $0.63 ... Slightly covers it. INTC needs to grow the business this year and the economy probably will help it out. INTC has certainly outperformed ADP in total return over the past 12 months and may again in the next 12. If I wanted to focus more on the price appreciation as opposed to dividend growth over the next 20 years, I would certainly pick INTC over ADP, but why not own both. I'm in the process of reading "Dividends Still Don't Lie" by Kelley Wright. It's a follow up book with their studies to a book written by Geraldine Weiss. (The name of that book escapes me at the moment.) This book is new. Was written in September 2009. They did a study of dividend paying stocks over a 40 year period, breaking it down to categories of length of dividend increases. Those who have increased dividends over 25 years, 15 years, 10 years, etc. The 25 year group came out ahead in the time frame of their study. amazon.com Some of you will like this book because he talks about selling when the yield gets too high. He shows examples where companies with a long trading history have dividend yield peaks and then the stock declines in price. Then he shows where the yields get low enough to repurchase. He looks at 10 year time frames. He lists most of the companies a lot of us own, showing their ideal yields for buying and selling. A lot of various ways to make money in dividend paying stocks. The important thing to do is pick a style you have confidence in and stick with it! Then you pick the stocks that fit that profile. Wright talks about not investing in the stock market, but finding a market of stocks that fit your plan.