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

To: Jacob Snyder who wrote (9849)	8/14/2011 4:08:27 PM
From: JimisJim	Read Replies (1) \| Respond to of 34328

Not sure I can agree with that last rule... if I'd followed that strategy, I wouldn't be holding EPB right now for example, because it hit your sell criteria, but not sure it would have qualified to buy back yet and in the meantime, I'd have missed out on the compounding divvies I reinvested, etc. I don't want to sell any of my winners -- and EPB has been a winner for me in total return as well as divvy/yield. Buying back at lower prices sounds like a good thing, but in the real world, doesn't always work out... esp. in these days of HFT trading where the charts seem to be less and less relevant... HFT trading has really shaken my confidence in charts... When I bought EPB, it wasn't considered cheap or a value at the time (18s)... I just bought it and have never looked back. I've found that swing trading income/divvy growth stocks just doesn't seem to work for me. However, stocks (like CEN.to) are a different story and swing trading has worked very well -- I think you need a different type of stock to swing trade from the stocks that are good income/divvy plays. Choose stocks that fit the intended trading style for best results, IMO. Jim

To: Jacob Snyder who wrote (9849)	8/14/2011 7:54:15 PM
From: E_K_S	Read Replies (1) \| Respond to of 34328

Hi Jacob - Re: Rules for a Quality Dividend Growth Portfolio What do you do w/ your dividend stream? Are they automatically reinvested in the same company using a company sponsored DRIP program and/or reinvested in other dividend paying companies as they are earned and/or held and accumulated until a significant dividend stock opportunity presents itself (could be months) and/or just spend the qualified dividends as income. I have also been applying a Warren Buffet debt screen to my buys where : "LONG TERM DEBT :- Long Term DEBT < 3 x Annual NET Earnings". I will expand the ratio to 4x or 5x Annual Net income if the other metrics are low (ie payout ratio). I just do not want to own companies that have a lot of leverage debt in this environment. My dividend yield threshold will go as low as 3% however, I want the PE to be 10 or less and a history of dividend increases, My sell criteria kicks in when the relative dividend yield falls below 4% and the PE is greater than 13. It depends on the industry so if the yield is relatively higher than it's peers and/or Forward PE is falling I will continue to hold. If the Forward PE is trending higher and is high when compared to it's peers AND my other metrics seem to be on the high end (ie payout ratio, LT debt), I will scale out of the stock and move the money into another candidate. ------------------------------------------------------------------------------------------------------------------------------------ Since I live on my capital gains and dividends, what I do not spend, automatically goes into the investment bucket. I generally hold my liquid money in four different type of buckets: Credit Union, GNMA Mutual Fund, a Basket of Preferred Stocks (that pay monthly yielding 8.5%-10.25%; MHRpC, MHRpD, GSTpA), and/or REITs that yield 8% (ie GOV). I am always trying to buy dividend growers at a value price and recently have focused on MLP Midstream operators, Intra State pipeline & storage companies (some are utilities w/ E&P divisions that add a growth kicker ie MDU), Dividend Aristocrats (KMB, JnJ, "Fallen" Dividend Aristocrats (ie LLY), and several other candidates that I maintain on a watch list. I typically do little selling but if not a company specific issue, it is a market "over valuation" item (PE extends over 15 w/ yield falling below 4%). Within the last 8 months, I have scaled out of several of my dividend paying utilities as they triggered these sell criteria. Finally, It's never an "All Out" sell or an "ALL In" buy. I scale into my positions w/ at least three or more separate buys if it is a new position. I may do an "ALL OUT" sell if there is a company specific issue that suggest trouble ahead. Other wise, I try to peel off shares as new highs are reached w/ the money going into the holding bucket(s) waiting for a dividend grower opportunity. I am looking closely at allocating a portion of the portfolio into an income property (apartment buildings) if an all cash buy can produce an extraordinary bargain 4 Gross Rent Multiplier or lower and after expenses can generate FCF 2x or better than my dividend portfolio. It's a lot easier to manage the dividend portfolio (buying/selling and collecting dividends) than it is rental property. The current portfolio consists of aprox 87 stocks w/ a blended yield around 5% (that also includes the Cash and bond like components). EKS

To: Jacob Snyder who wrote (9849)	8/14/2011 11:41:43 PM
From: Tapcon	Read Replies (3) \| Respond to of 34328

It was interesting to see the criterion you had for payout ratio (i.e. , 60%). I had made a couple of posts last week asking what others had thought about payout ratios of some stocks mentioned on this board and got no replies. ERF, for example, has a payout ratio of 452% according to yahoo. VZ is at 102% compared to T which has a payout ratio of 50%. O seems to be a popular core holding for this board's regulars and it shows a payout ratio of 178%, GOV is at 194%. With payout ratios this high, are the dividends sustainable? Are there extenuating circumstances that would downplay the significance of the payout ratio?

To: Jacob Snyder who wrote (9849)	8/19/2011 8:55:55 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 34328

XOM, Exxon, began buying today, at $69.7, a 1/3 position. Will buy more in increments, at lower prices if the market goes down, planning on a full position if it hits $55. Sell half my position at 90$. Stock price range: 90-54$ (from hi prices 2007, 2011, to low prices 2008, 2010) div yield = 1.88/69.7 = 2.7% 29 consecutive years of dividend increases shares: 6.95B in 2000 4.88B in 2010 payout ratio 25% PE: 10.5 trailing, 8.5 forward; usual range 9-13 P/S: 0.8; usual range 0.8-1.1 beta 0.5 Production Statistics: 0ver 100% Replacement, 17 years in a row 84 billion BOE resource base at the end of 2010. Industry Leader. Exxon is the largest natural gas producer in the U.S., in addition to being an Oil Major. Revenues and profits track the price of oil and gas. It meets all my Rules except: div. yield lo, but consistent stock buybacks of 2-3%/y make up for that stock price in the middle of LT range, but valuation at low end