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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (4698)	8/18/1998 10:33:00 PM
From: James Clarke	Read Replies (3) \| Respond to of 78627

<<What still pays more than 7%?>> Dividends are boring. Even to me. Watching a stock go up is much more exciting. But I have never been through a bear market, and I know they're good for me even if my portfolio puts me to sleep. What I am trying to do is play offense and defense at the same time, buying undervalued stocks with dividend yields well above the long bond where the dividend yield is more or less secure. 1. USEC (USU) is my largest investment. We've heard alot about it here, so we don't need to go through it again. Its up signficantly the last couple days as two of the bankers came in with buy recommendations. While I ordinarily discount buy recs from the bankers, Morgan Stanley's was significant because the guy really believes the story and is looking for a double. $1.10 dividend which is rock solid on a $14 3/4 share price. Whats that, 7 1/2% or so? 2. EastGroup Properties (EGP) A REIT with a solid long term track record or wealth creation paying a dividend north of 7%. The dividend is especially secure because they are in the lowest volatility property type - warehouses. Very boring, but in the long run these guys will make you money. 3. LaSalle Hotels (LHO) - a little more risky, but I can't resist a 10 1/2% yield. This is a new IPO, and the stock tanked from the start. But I met with the CEO last week and tried to shake the story but couldn't. Hotels are the most volatile property type though, so if the hotel supply/demand balance deteriorates, the dividend is not secure. I'm not looking to hold this one long-term, but the current price just doesn't make sense. Don't trust your screens on this one. The dividend is $1.50, even though some databases have the wrong number. 4. RJR I don't own, but it pays an 8 1/2% yield which is secure based on the cash flow, but is definitely vulnerable to tobaccos settlements with the governement or class action defeats. Just a few ideas. With the long bond at 5 1/2%, a yield over 7% is very enticing. Jim