Dividend Stocks

[Show-me]

How about a thread to post long term dividend stocks. Here is a article to start it off.

http://www.briefing.com/Investor/Private/OurView/TakingStock.htm

Dividends can, and should, be used by investors as an investment tool to enhance performance over time. With corporate balance sheets flush with cash and corporations increasing share buybacks and payouts, dividends will become a significant part of total returns.
Since January 1980, the S&P 500 Index had a total return of 2,568% - 56% of which was derived from the receipt of dividends, according to Standard & Poor's.
Asset allocation, however, depends on the individual investor. These are stocks you buy for the long-haul, five to ten years. Therefore allocation will depend on your investment horizon and risk tolerance. There are tax benefits to consider as well.
When it comes to stock selection, there are several factors to consider. As economic growth prospects wane, performance within cyclical and non-cyclical sectors varies. Investors should use these trends to their advantage, buying cyclical dividend paying stocks during periods of economic growth and non-cyclicals during periods of decline.

[CountryBoy]

Hey Show-me,

Nice article, there were several on there, that I would’ve loved to owned, but I had to draw the line somewhere. Here's pretty much what I do. I got into divvy stocks just to have some additional flexibility outside my TSP and the mutuals I have.

Dividend and decent yield stocks are pretty much all I buy, since it’s for my Roth and I really don’t have the amount of funds to make it worthwhile to be a trader to buy and sell, in sufficient quantity to make a profit based on percentage rises in stock prices, so I go the stock Divvy and yield route mainly, though I do have about 6 stocks that have a yield below 3%, but those 6 all produce decent divvy’s, ie JNJ, PG and UTX are part of those 6.

But the remainder of about 14 are above 3 % up 10% yield (Shipping stock DSX). But when I started buying back in October 2006, thru Sharebuilders, I decided on a strategy, that I later came to find out was called the Dogs of the Dow (DOD). So though I mainly follow that DOD strategy with T, GE, and PFE, etc, I also have thrown in a couple of Elec Utilities (nice divvies), a railroad/ethanol/highway congestion for pin action stock in TRN, some energy stock (BP, SLB and SPE) and a couple of pure international exposure stock in UL and NVS, though GE and UTX also have international exposure. Also ECOL, WFC and MCHP for added diversity. I try to have enough defensive stocks that the Dems can’t hurt me to much in 2008, at least that’s my idea. People still have to buy toilet paper and food, though Sheryl Crowe sure put a crimp in the old tp stock. :laugh:

So most every one of my stocks are pretty consistent Divvy producers, Oh yeah one spec stock in SYNM.

I also have one ETF XLB, cause it had so many stocks in it that I would have loved to have had, but ya can’t buy them all. So I’m pretty maxed out on the number of stocks, though I may pick up a water utility stock in the near future.

I’m a newbie and still learning, but it sure has been fun doing it and with Sharebuilders, I buy a few shares 5 or 6 times a month.

Well the NFL draft starts up here in an hour and I got all my outside work done, so I can loaf a little this weekend. :D And with 40 acres, I sure do enjoy my loafing time, when I can get it.

CB

[Show-me]

CountryBoy,
Excellent post! Thank you for sharing you strategy and picks!

[CountryBoy]

Thank ya Show-me,

I'm hoping this will be a fairly active thread, cause I'm always looking for new ideas and advice.

See ya around,
CB

[Show-me]

Thank ya Show-me,

I'm hoping this will be a fairly active thread, cause I'm always looking for new ideas and advice.

See ya around,
CB

Me too! Speaking of 40 acres, got go tear out some old fence. Wanna help? lol

[Birchtree]

From John Lonski, Chief Economist, Moody's Investor Service.

"About half of all U.S. households own stocks either directly or through mutual funds, a three-fold increase since the early 1980s, according to a 2005 study by the Investment Company Institute. Much of that growth has resulted from the increased availability of defined-contribution retirement plans, especially the 401(K). While the growing concentration of stocks in retirement and college-savings plans have reduced their impact on immediate spending, a growing stock market can also have indirect effects by improving employment security and enhancing job opportunities. Will a rising stock market boost the economy by putting more money in people's hands? Maybe. But stock holdings are concentrated among the wealthiest Americans, (holy grail for Birchtree) who are least likely to spend their earnings. In 2001, the top 10% of all U.S. households owned three-quarters of all taxable stock, and the wealthiest 1% owned 29%." More than ever before, thanks to 401(K) plans, the stock market is of greater importance to households. Love those dividend reinvestment plans, money comes in every three months like clock work.

[VirginiaBob]

I've never bought an individual fund. I've always held mutual funds throughout my lifetime, but am thinking about taking the plunge and buying some individual stocks. Birch and others, what would you all recommend as a start? I'm not looking for high risk, but something to build some confidence in buying individual stocks.

[Show-me]

http://www.dogsofthedow.com/dogytd.htm

http://articles.moneycentral.msn.com/Investing/InvestingForIncome/DividendStocksForLowExcitementHighReturns.aspx

http://www.google.com/search?hl=en&q=High+dividend+stocks

Here some I Googled. CountryBoy mentioned the Dogs of the Dow (DOD) as buying opportunities. I like it!

[CountryBoy]

Just a suggestion VB,

When I first started looking, GE (GE) and AT&T (T) were the first 2 stocks I added to my Roth. They were 2 historically solid stocks with good divvies, different sectors and the price was right, mid $30, though now I've added a few stocks in the $60 range, but of course it does take longer to build up the shares in those stocks, especially the way I can afford to do it.

Then study, study, study. One hint that I found useful, esoecially early on, was to look at the best growth, value or divvy paying mutual funds (just google them) and see what their top 10 holdings may be, that'll give ya an idea of what the better stocks are. As I said earlier, I definately prefer stocks that historically have paid divvies, but I also got an odd ball or 2, but they were much later additions as I became more familiar with stocks.

Rus

[VirginiaBob]

What is the rules for getting a dividend anyways? Do you only need to own the stock for one day to get it? If so, why doesn't everyone just buy the stock for the day the dividend pays? Probably something like the share price takes a hit the same day the dividend pays?

[Show-me]

I'm not sure. I know there is a cut off. Give me some time and if no one answers I'll try to find something out this evening.

[CountryBoy]

I'm not sure what the time period either. I know most pay quarterly. Checking back on my records, I received a divvy on my Duke stock and had only owned it for about a month and a half.

This sounds like something for someone like Birch, who has invested in stcoks a whole heckuva longer than I have. I'm curious about this also.

CB

[ChemEng]

What is the rules for getting a dividend anyways? Do you only need to own the stock for one day to get it? If so, why doesn't everyone just buy the stock for the day the dividend pays? Probably something like the share price takes a hit the same day the dividend pays?

Interesting question. Id be interested in hearing peoples thoughts/experiences with it.

[Birchtree]

Most individual stocks post a day of record for the dividend payment. If you own the stock during this period of time and sell within that window you will still receive the dividend. Most stocks will increase their dividends yearly. I know one fellow with a Sharbuilder deferred account with 46 stocks and he takes down 184 dividend hit/year. It's money coming in all the time. That day of record should read date of record. And I almost forgot some stocks will reach a certain level in price and do a split. I have one splitting tomorrow 2 for 1.

Virginia bob,

Take a look at EBF or AP, they've both done well for me and I continue to hold them both.

[IllinifanMichael]

Most individual stocks post a day of record for the dividend payment. If you own the stock during this period of time and sell within that window you will still receive the dividend. Most stocks will increase their dividends yearly. I know one fellow with a Sharbuilder deferred account with 46 stocks and he takes down 184 dividend hit/year. It's money coming in all the time. That day of record should read date of record. And I almost forgot some stocks will reach a certain level in price and do a split. I have one splitting tomorrow 2 for 1.

Virginia bob,

Take a look at EBF or AP, they've both done well for me and I continue to hold them both.
How do you know when they'll split?? I'll admit I just opened a sharebuilder account. Stuck between one time buying and the investing over a stock monthly. Need more capitol for sure in the money market account w/sharebuilders.

[Scout333]

O gurus of the market! I understand the date of record concept i.e. if you own the stock on the date of record you get the dividend. The one I have a problem with is the "ex-dividend date". As I understand it, it is a date set by the brokerage to allow for processing of transactions prior to the date of record? Appears that the share price is adjusted to account for the fact that it is being sold ex- or without dividend? Is my understanding correct? I generally avoid doing transactions within a week or so of the date of record to keep from getting an unexpected result.

[Bullitt]

This thread has the potential to be something really good.

Unfortunately, during a bull run, too many investors get caught up in the growth trap brought on by TV and Wall Street. Just ask the people who think they are ever going to break even on FRPT, CROX, JSDA, and Heelys. Dividends are the only true indicator of company profits. As we saw in 2006 companies lured speculators towards their stock by 'buying back shares'. Despite the rah rah this subject gets, share buybacks do nothing for the individual investor. The only group this benefits is Wall Street as they are the only ones buying low and selling high. What's a company like CROX going to do with those shares they bought back at 60? Sell them to raise capital?

If you were to buy dividend paying stocks and reinvest the dividends, you'd be glad to see your company drop in price. While reinvesting dividends sounds easier said than done, it is still an effective method in the long run. For example, you could automatically reinvest dividends with your broker but you may only be able to buy a few shares with each quarterly divvy payout. You could also take your dividends and reinvest them in another company you've got your eyes on. Nobody said you have to reinvest in the same company that issues them.

Another idea would be to collect the dividends, let them sit in a cash money market account, and wait for the company share price to fall off a cliff. I know, I know, don't catch a falling knife and all but you probably don't have to worry about a wide moat company going under if you're planning 10+ years out. Do this and you're going to lower your cost average over time.

I suspect dividend stocks don't have as much appeal amongst the individual investor as it should because of the Growth Trap implemented by TV shows and get rich quick schemes. Every time you look on TV you'll see "Our market movers are XYZ, which is up 4.2% today on an announced share buyback while ABC is down 6% after writing down $2 Billion in bad loans." The retail investor takes this as, "Time to buy XYZ and sell my ABC". Hence the term 'Dumb Money'.

I'm not an advocate of DRIPs because of the hidden fees they impose to buy, reinvest, and liquidate. You're also stuck investing only in that company stock for the duration.

As much as I'd like to, I can't consider GOOG or CSCO long term holdings. Just my opinion, but unless you're trading them in and out, your gains are nothing but paper gains. There were lots of paper millionaires in 2000. Ask a Gold Bug how much money he's made in gold as a long term investment too if you get a chance. Don't fall for that one either.

It sounds simple, but a long term account could hold dividend paying stocks such as PFE, BAC, C, MO, XOM, WMT and it will be worth a lot of $$$ some day. On a side note, if you managed to pick a good dividend paying mutual fund, you'll probably get to reinvest cap gains as well. Dividends have begun to make a comeback as investors sought real earnings after the dot com debacle, but long term investors are not quite fully utilizing the power of them. Again, it's the great growth trap brought on to us by the Street. (Hey can you blame them? If there weren't retail investors, who would a Hedge Fund sell their growth stocks to at the top?) Wait a little while and build up your ammo before you decide to start shooting from the hip. Get rich slowly. It takes money to make money.;)

(If only I would've reinvested those dividends in BOS when I received them quarterly. BOS was Boston Celtics, my first stock holding ever, which was bought out sometime around '01.)

I'm wondering what you folks do. Do you reinvest via DRIP? Do you reinvest as soon as the dividend is payed out? Do you take the money as cash? Do you look for other opportunities?

[Birchtree]

My bundle of dividends are paid according to fate - they are all on auto-pilot. They make me feel better during weeks like we recently experienced knowing that I'm still buying regardless - especially during the low valleys. And dividend reinvestments become a self-feeding system - the lower the stock purchase price the greater the shares and the more dividend the next time around. I find that I do hate to sell a position because the income loss is what I miss. But a good capital gain makes the sacrifice worthwhile because that income will be redistributed to purchase other wall flowers that come with a dowry.

[Hallatauer]

I've never bought an individual fund. I've always held mutual funds throughout my lifetime, but am thinking about taking the plunge and buying some individual stocks. Birch and others, what would you all recommend as a start? I'm not looking for high risk, but something to build some confidence in buying individual stocks.

The best website I have ever found to get started buying on your own is The Motley Fool http://www.fool.com/index.aspx Solid advice, conservative and realistic. They cover everything from stock buying to planning retirement to car buying for the average person.

[Birchtree]

He is an interesting take on dividends. GE just increased their dividend by 11% to $0.31 per share per quarter. That works out to a 3.4% yield at the $37.00 price. Now think about a block purchase at $24.00 several years back and what the yield would be on that price with the increased dividend payout. The longer you hold the better the return looks.

[Bullitt]

Do you know the only thing that gives me pleasure? It's to see my dividends coming in.
-John D. Rockefeller 1901

[CountryBoy]

Yep, T and GE both increased their dividends and it sure brought a big smile to my face.

CB

[Birchtree]

Looking downtown at a nice set of nails brings a smile to my face. Boy they are pretty.

[Show-me]

http://biz.yahoo.com/ap/080105/wall_main.html

AP
Investors May See Dividends Disappear
Saturday January 5, 4:24 am ET
By Stephen Bernard, AP Business Writer

Dividends in Financial Services Sector Likely to Be Casualties of Tightening Credit Markets

NEW YORK (AP) -- With credit markets continuing their downward spiral, investors could see their dividends disappearing in 2008.

Dividend cuts or suspensions will continue to pick up among financial services firms in 2008, said Howard Silverblatt, a senior index analyst at Standard & Poor's. In 2007, fewer companies increased dividends, according to Standard & Poor's, while more companies in 2007 than in 2006 actually cut or suspended dividends.

Many investors rely on dividend payments as a source of income, and financial institutions in particular have been rich sources of large payouts. Their need to raise capital in the face of rising loan defaults, though, has made their dividends one of the first places they look to save money.

Diane Merdian at Keefe Bruyette & Woods noted that banks, in general, are offering a dividend yield that is near an all-time high when measured against the dividend yield on the S&P 500. Yields are based on a company's full year of dividends compared to the current share price.

Higher yields indicate the company might be distributing more cash to investors than it can afford. Drastic dividends cuts or outright suspensions are likely steps if companies are struggling with earnings or other cash needs.

Since early July, credit markets have been in a free fall, mostly due to rising defaults on mortgages, especially subprime loans given to customers with poor credit history.

As a result of the rising defaults, investors have shied away from purchasing bonds and debt backed by the loans because of fears of mounting losses. As investors stopped buying the debt, banks and other holders of the bonds have been forced to write down their value. The writedowns -- which eclipsed $100 billion in 2007 -- have strained earnings, forcing companies to look for new ways to raise capital and preserve cash.

More at link.

[Scottydog]

Excellent Thread! I must say...I love to read about other investors that value dividend paying stocks like I do. As to the story of investors seeing dividends disappear - while that may be true for some companies...the quality companies out there have enough cash to continue to payout increases or maintain their current levels without decreasing their dividend payments. My list of dividend companies that I hold in my Roth are: General Electric (GE), Proctor and Gamble (PG), Johnson & Johnson (JNJ), Pfizer (PFE), Bank of America (BAC) and Aqua America (WTR). I have substantial amts in GE and BAC...over $10,000 each. But all of the stocks listed above are on the dividend aristocrats list....companies that continue to raise their dividends year after year...etc. Stock that I bought in GE when it was in the $25-27 range back after the huge drop in from the upper $50s...$60 range...is now yielding almost 5% and BAC...although I'm under the price I bought it at now....is now paying 6.5%.....all the companies listed above have tons of cash to get through a slow down and many of them have revenues outside of the US which is good.

I've always been in favor of having dividend paying stocks in a Roth IRA and here is the reason. It's easier for tax purposes....since you don't have to figure the cost basis...etc. and you don't pay taxes on the dividends now or later. I have a strategy of getting nice paying companies that have been around a while, increases dividends yearly, and have good growth. I've also tried to pick stocks that pay out in different months of the year so when I turn off the "reinvestment of dividends" feature on my Sharebuilder account....I'll get a monthly check deposited into my bank account while still saving the principal. The stocks don't have to be rockets like Google or Apple. It would have been nice to own them over the last year/2 yrs but that is not my investment style. I love to cook pulled pork with my smoker and the only (best) way of making out of this world pulled-pork is cooking it....low and slow....just like my investing. The key is saving.....we put aside about $22,000 of our total $90,000 a year into our Roth/401(k)'s each year and the only debt we have is the house. Good Dividend paying stocks, while they don't shoot up like crazy all of a sudden....over time...they get the job done and with minimal risk. Don't look at the stocks that only pay high dividends either....look for good quality companies that you know, have been around for a while, and have stockpiles of cash on hand. Other choices of companies other than the ones above would be....Coca Cola, Pepsico, Altria, Wells Fargo, 3M, Abbott Labs, Lowe's, Regions Financial, Walgreen, US Bancorp. They will have ups and downs just like the rest of the market but long term - buy/hold investors will make out very well. Make sure you find out their current payout ratios though....try not to get companies that are above the 50% payout....50% of thier earnings...they may not be able to sustain the dividend....unless they have bundles of cash on hand to get through a slow down...etc. I 1st got started into looking at dividend stocks back when I was in Jr High School.....late 80s...I read "Buying Stocks Without a Broker" by Charles Carlson......at that time there was no Roth...but I knew the power of reinvesting dividends.....the rest is history. Stocks that I would suggest right now to buy because they are cheap and they will rebound this year or going into next year....Bank of America, General Electric and Pfizer....they will reward investors that are going to hold onto the stocks for a while...a nice dividend to hold onto during the slowdown and then they'll start climbing in price towards the end of the year when things start looking better in the economy. GE in particular because it's been neglected by Wall Street even though it has increased earnings almost 10% for the last 2 yrs....and the stock has gone nowwhere.....with it's wind turbines, energy/infrastructure business....it's cashflow is great compared to other companies out there that are getting more attention.

[Show-me]

Scottydog,

Glad you like the thread and welcome to the message board! Thank you for sharing your views and picks.

[CountryBoy]

Scottydog,

I enjoyed the thread and we seem to have the same investing plan when it comes to ROTHs and Dividend paying stocks. I like the Dogs also. We sure do have alot of the same stocks. Besides several of those that you mentioned, I also have included UTX, T, DUK, D and for some international flavor BHP and DSX ( A little spec on this one also.)

Thanks for sharing. I always enjoy seeing how other's invest, cause there is always something to learn.

CB

[Birchtree]

Very nice, indeed. Good to have another sensible person on board.

[Bullitt]

Scottdog, let the good times roll. Good for you for not being a chaser by choosing not to fall for Wall Street's Great Growth Trap. Think of how many people you agitate with your strategy. You're one less person an institution can sell to at the top. I applaud your post.

Hey Countryboy, unjustified beatdown going on in T right now. Opportunity knocks. ;)

[CountryBoy]

Yeah Bullitt,

I saw that yesterday, I got a few shares, but really wish I had more money on hand, but then that's always the problem. :D I just keep plugging away.

CB

[CountryBoy]

For my fellow stock buyers out there,

Since this is my first bear market or major pullback, the question I have, is what do you buy, especially with limited funds. I’m in CP mode for my TSP, but for our ROTH’s, do you buy a recession proof stock, ie like D, DUK, JNJ or PG or something that is getting beat up like BHP, WFC, UTX, DSX or BAC or alternate between recession proof and beaten up stocks as you gather your funds. Or should you base your decision on dividends or largest share price drop at the time of purchase? Financials should be nice and cheap next week after they begin reporting.

Since I’ve only been buying stocks for about a year and a half, I want to make the best of a bad situation and ya’ll have been involved in purchasing stocks longer than me.

Appreciate any advice or what method you use. :)

CB

[Bullitt]

Country, check PM.

[Birchtree]

Country Boy,

I've been buying out of favor stocks in the financial and housing sector related areas. These are definitely out of favor stocks and that is intentional - I'm buying for the available income that will be automatically reinvested as dividends. I have no plans to make capital gains during the next couple of years - the longer they take to recover the more shares we will purchase. I've listed many of them on my thread - but here are a few more: WRI, MNI, MBI, MPG, CLI, KIM, JRT, IFC, IRC, IMB, IAR, HIW, HR, HST, GKK, GTY, FIG, FMD, FHN, FCF.

[wv-girl]

Do you do your own research? How do you determine what to buy? I know they all offer a dividend but what other criteria do you use? And do you buy hugh amts? Or do you limit the amt of money used? I am not asking for a specific amount of money you use, but maybe a pct or something like that. Just trying to get an idea or two. It seems you buy so much that I can't imagine you get much sleep.

[Birchtree]

Most of the stocks I'm buying for my daughter will initially be in 50 to 100 share positions with the idea of adding to them in the future. I've been in the markets since 1972 or there abouts and have done a lot of homework over the years that eventually becomes cumulative with experience. These stocks are all essentially on their yearly lows and many without good provacation - collateral damaged if you will. I'm setting up an automatic dividend reinvestment plan that should provide close to 350 dividend payouts/year. There will undoubtedly be a few loosers in the group as well as some outperformers and that provides flexibility down the road to make changes. Once the program is in motion I'll sleep just fine knowing money never sleeps and will be working even when I'm not paying any attention. It will all be on automatic pilot. I'm basically a contrarian investor that has developed this way in an unintentional manner. It works for me. Snort.

[Birchtree]

Here are the rest that are on my list for my daughter: EQY, CUZ, CIT, CNB, CLP, CIX, OFC, CX, CDR, HRB, AF, AEC, VLY, AIV, ANL, ADC, AEG, PZE, NRE.

[Oldcoin]

I picked up some SPAR. I try to go over the latest reports filed with the SEC, works better than a sleeping pill. :D Seems there are some real bargains out there right now.

[CountryBoy]

Country Boy,

I've been buying out of favor stocks in the financial and housing sector related areas. These are definitely out of favor stocks and that is intentional - I'm buying for the available income that will be automatically reinvested as dividends. I have no plans to make capital gains during the next couple of years - the longer they take to recover the more shares we will purchase. I've listed many of them on my thread - but here are a few more: WRI, MNI, MBI, MPG, CLI, KIM, JRT, IFC, IRC, IMB, IAR, HIW, HR, HST, GKK, GTY, FIG, FMD, FHN, FCF.

Hey Birch,

I gotta couple of outta favor stocks in the financial sector, and I've dipped my toe in a bought a little, but I tentatively plan to add even more after the financials report in the next week or so. I feel they still have some more beating to take. After the beating I'll be buying the ones I already have, WFC and BAC, because of the good divvys and I think are to solid to stay beaten down long and will definately pay off in the long term, as I am a long term investor for our ROTHS's.

Now the housing sector scares me to death :D and not being familiar with it and with other beaten stock choices out, I'll stay with what I've already got.

Thanks for your input,
CB

[Jackbnimble]

Birch did you mean NRF instead of NRE?

I have been in and out of that out of favor commercial REIT myself.

[Birchtree]

Yes, my mistake - NRF

[Scottydog]

Birchtree,

Isn't that too many stocks to invest in? It's one thing to only have say 3-4 individual stocks...but the opposite side is having more than 13+....

For one - nightmare in tracking how well you are doing - especially if it's a taxable account because of the cost basis if you are reinvesting dividends. Two - commission costs unless these are through DRIPs that don't charge for optional cash purchases. Carlson's books say that most porfolios can do well with dividend stocks with only 10 or less of them. To me...it's just a lot of stuff to track and maintain....plus time involved. Could you be overdiversified....BTW there is such a thing. Just curious. Thinking from a sector viewpoint....a conglomerate (like GE, MMM), a bank (WFC, USB, BAC, RF), a transportation (Union Pacific or Norfolk Southern), drugs (Pfizer, Merck), a medicial devices (JNJ, Boston Sci), consumer products (PG or Colgate Palm, PEP, KO), House Improvement (HD or LOW), Oil/Minerals (XOM, COP, BTU, ACI) and a utility (WTR, Southwest Water, Duke) should give you a pretty good spread of the economy in general....best of breeds (or the #2 company) for each sector should work out pretty well compared to the rest of their respective areas. You could have a great portfolio (long term) buy picking one from each sector and maybe a few more...but with a total of 12 or so stocks. Example Port would be:

GE, BAC, RF, MMM, JNJ, PG, PEP, WTR, NSC, BTU, LOW, PFE

Now the portfolio is not perfect...what whose is? It's not 500 stocks like the S&P 500...but then again the avg. yield of the above stocks right now would be close to 3%...you have growth, defensive, even cyclical. Most of them are also on the Dividend Aristocrats list....GE, BAC, RF, MMM, JNJ, PG, PEP, LOW, PFE....give it a couple years and WTR will be on there as well - it's increased it's dividend every year for a while now...but doesn't meet the # of years requirement yet.

BTW....wish you could send in more than $5,000 into a Roth this year....BAC is screaming to be bought....so is PFE...by year's end they will probably be 10% higher or more....which means the yield will be lower and I'll be buying less :(

[Birchtree]

Scottydog,

I have 228 individual stocks in my oceanic account. You can find my internal list from post #30 on the short term outlook between now and christmas thread. Some of these positions will undoubtedly be left to heirs and that is part of the plan. Merrill Lynch does all the record keeping and I keep track both with paper and the internet. With 38 years of accumulated experience a great deal of the homework has already been done. Not all my positions pay dividends - but if they did I would have 912 hits/year. I will be eventually taking some profits throughout the year to reinvest the income in new wall flowers. Last year I made 19 sales and took that income and made 522 individual purchases. Now all I have to do is figure my taxes. I essentially have built my own mutual fund - I can liquidate for cash at anytime - so this account provides me with a great deal of flexibility. I'm in the process of building accounts for my daughter so that her money never sleeps. She will end up with about 90 stocks that all pay dividends - that will give her 360 hits/year. That's money coming in all the time. If we get a runner we can always let it go and sell to reinvest the income. This is my way of building security for retirement because I'm very bullish on the long term future of this economy. Snort.

[Scottydog]

Birch - I see....thanks for the info.

I should have known something was going to happen to BAC....unbelievable! I was sitting on Wedn. afternoon during a break at work saying to myself...I should put all $5,000 of my 2008 Roth IRA money into BAC....this was around 2pm on Jan 9th....I was busy with meetings in the morning so I only had a chance to look at the market after lunch....I felt like pulling the trigger on it...it was like 37.45 or so....paying like a 6.83% yield....yes...look again...6.83% Then look what happen after than...it rallied 3%+ after 2pm......then on top of that today's news....them buying Countrywide. Well...that should put to rest anyone's invalid fears of a possible rate cut from BAC. If anyone would dig a little...they would see they have tons of cash on hand unlike Citigroup. Their dividend was never in jeopardy like some analysts that would lead you to think that. Well now it's $39.30 as of the close on Thurs. Jan 10...an increase of $1.85 or a nice 4.9% increase that I would have made + the dividend. I'm hoping for a drop tomorrow so I can lock in below $39.00. Even at $39.30....it's paying a 6.5% yield....excellent for these conditions and it shouldn't take too long to get to the mid 40s...which would be a 10%+ return + a 6.5% yield....16% this year? I'll take it :)

[Bullitt]

If anyone would dig a little...they would see they have tons of cash on hand unlike Citigroup. Their dividend was never in jeopardy like some analysts that would lead you to think that.

Analysts have been digging, but there's a reason why the stock hasn't moved any more than the bank sector. If they had a secret stash of cash somewhere, somebody would know. You'll get another chance at that 38 level in BAC. All that matters for these banks is their Tier 1 capital ratio. Don't forget that BAC spent some righteous bucks on the acquisition of LaSalle Bank in '07 and who knows what the 4th quarter writedowns will be. Taking on CFC's black box is a gamble but could make Lewis look like a genius in 5 years if it pans out. Besides, this could be a stock deal instead of cash. I wouldn't say this banking mess in the rearview mirror yet. Don't forget, BAC moved the market with their stake in CFC in Aug.

In the short term the market is a voting machine but in the long term it's a weighing machine. Ben Graham

[Scottydog]

Well I pulled the trigger 3 times....over the past week and pretty much used up the $10,000 for FY08 in my Roth and my wife's Roth. I bought $4,000 worth of BAC a few days ago @ 38.00....then bought the remaining $1,000 in my account of BAC @ 37.12 today.....then at the end of the day bought $2,500 of BAC @ $37.00 under my wife's account. I'll probably spend the last $2,500 on PFE here within a few days and be done with this year's purchases in our Roth's. I don't like to "spend" that money this early in the year...but considering that the Fed will probably pull the trigger on interest rates soon....you need to be ahead to lock in the dividend yields. BAC is below a key support level though...which bugs me a little but all in all now....we'll be getting about $1,100 in dividends a year just from BAC.

The only reason why I said they have more cash than Citigroup in an earlier post is that when you look at the cash flow....their provision for loan losses is a lot lower than Citi's and they haven't need a cash infusion for the write-offs. The Countrywide purchase was stock only....that will dilute the earnings some but not a big deal. It's actually a great purchase considering that you got a couple more billion $$ in assets that were on a blue-light special. They did take a hit buy pumping 2 bill into Countrywide earlier but then got the rest of the company on sale. Lewis will be able to turn Countrywide into a money machine just like he did for MBNA and FleetBoston. It takes time...but I personally think that BAC will be getting some help from Uncle Sam on this one.....both tax breaks....and lower interest rates from the Fed. In an interview, Bernanke liked the idea of BAC buying Countrywide.....now most Fed chairmen won't comment on individual stocks...mergers...etc.....does he know something we don't? Plus I love the loophole with BAC buying Countrywide....the 10% deposits rule...well it doesn't apply here because Countrywides deposits are categorized as Thrifts....not normal "deposits"....which means you can funnel it over to the Thrift part....and grow. It'll be bumpy...but BAC really does put it's shareholders 1st....they have in the past and I don't see why they would change now. They have plenty of cash reserves to pay the current dividend for over a year....and by then the rates will be lower....we'll be out of the 6-9 month recession and the mortgage market will become stable (not thriving)....stable. Then the buy and hold shareholders will be rewarded....and the analysts will be recommending the stock....like they always do after the stock goes up 10-15%. Crazy to say the least....but the 6.90+% yield that I will be getting on the $3,500 today....I'll be smiling if the market goes no where for 1 year...I'll make my almost 7% while reinvesting dividends at flat prices. JUST wish the cap was higher than $5,000 on the Roths....guess I'll have to go taxable now :(

[Bullitt]

Thinking about starting a DRIP Fund?

From Dow Theory Newsletter: http://www.forbes.com/finance/2008/01/27/ibm-pepsico-chevron-pf-guru-in_rm_0128soapbox_inl.html?boxes=custom

From Smart Money:
(scroll down) http://www.smartmoney.com/ask/index.cfm?story=february2008-personal-finance-advice

[Bullitt]

Looking for a place to begin looking for dividend paying stocks? Try the Dividend Aristocrat Index from S&P. These companies have increased their dividend payout for 25 consecutive years. Not too many surprises on this list.

[RealMoneyIssues]

Digging up an old dividend stock thread.

Curious, anyone else looking at dividend paying stocks now that the market is improving, companies are going back to paying dividends, and some are starting to pay them?

[Steel_Magnolia]

Digging up an old dividend stock thread.

Curious, anyone else looking at dividend paying stocks now that the market is improving, companies are going back to paying dividends, and some are starting to pay them?
I own dividend stocks now for the first time, and got two dividend checks today. The one thing I've found out is that I've got to look first at how the stock is doing and not at the dividend. I've already found out the hard way that trying to dividend harvest is a good way to lose money.

[RealMoneyIssues]

I own dividend stocks now for the first time, and got two dividend checks today. The one thing I've found out is that I've got to look first at how the stock is doing and not at the dividend. I've already found out the hard way that trying to dividend harvest is a good way to lose money.

Yup, I just got my first one today and was looking at increasing my dividend (and solid) stocks for long term growth.

[Gumby]

I own dividend stocks now for the first time, and got two dividend checks today. The one thing I've found out is that I've got to look first at how the stock is doing and not at the dividend. I've already found out the hard way that trying to dividend harvest is a good way to lose money.

I like my utilities that pay dividends..... AEE, SO, and CWT

Slow and steady will a decent yield.:)

[Scout333]

Interesting Dividend investment list.

DIY Dividend Investors Club (Part 7): 9 Stocks We Purchased This Month - Seeking Alpha (http://seekingalpha.com/article/1784572-diy-dividend-investors-club-part-7-9-stocks-we-purchased-this-month?source=email_investing_income&ifp=0)

[WorkFE]

Those look good Scout although there is one utility in there that seems a bit low on yield for a utlity.

[bmneveu]

Interesting Dividend investment list.

DIY Dividend Investors Club (Part 7): 9 Stocks We Purchased This Month - Seeking Alpha (http://seekingalpha.com/article/1784572-diy-dividend-investors-club-part-7-9-stocks-we-purchased-this-month?source=email_investing_income&ifp=0)

I'll be interested in their next segment covering financials and REITs as well. Good find, thanks!

[Scout333]

I like their "Buy Zone" identifier in list at the bottom of their article.

DIY Dividend Investors Club (Part 7): 9 Stocks We Purchased This Month - Seeking Alpha