Verizon and AT&T – Which Dividend Looks Better?
AT&T (T) and Verizon (VZ) are two classic dividend income plays. However, not all dividend yields are created equal - differences in growth rates, competitive advantages, balance sheet health, and more can significantly alter the riskiness of a dividend and a stock's total return potential. While T and VZ might have looked fairly similar several years ago, they have started to diverge in a pretty significant way...
Four Recession-Resistant Dividend Stocks
The market is getting anxious after a big 7-year run. US stocks finished their worst week since 2011. Commodity prices are crashing. Interest rates remain near zero around the world. Central banks are stimulating at unprecedented levels. Many emerging markets are already in bear markets. China’s economy is starting to sniffle, which can cause the world to catch a cold. So what is a long-term minded, fully-invested dividend investor to do? Besides following our top dividend portfolios for the best dividend ideas, it is always important to know your own holdings first. As we all know, “timing the market” is not a skill or a sustainable strategy. It is speculation, and we don’t recommend trying it. However, it is advisable to [...]
WMT’s Dividend is Strong but Profit Growth is Stalling Out
While WMT’s dividend is completely secure (96 Safety Score) and even offers reasonable growth prospects going forward (60 Growth Score), fundamental concerns about the company’s ability to grow its profits in an environment marked by increasingly upward wage pressure and sluggish sales trends keep the stock OUT of our Top 20 Dividend Stocks list and our four other hand-picked dividend portfolios. For these reasons, we believe WMT’s total return prospects are limited compared to other opportunities in the market. The dividend itself doesn’t look bad, but we would like to see at least a 3% dividend yield to get more interested. To view all of WMT’s key fundamental and dividend data in easy-to-read charts, click here. This helps us [...]
JNJ – A Rock Solid 3% Dividend Yield
JNJ is a core holding in our Conservative Retirees dividend portfolio due to its 3% dividend yield, low business volatility, reasonable valuation, and rock solid fundamentals. The Conservative Retirees dividend portfolio contains 25 stocks with extremely safe dividends and above average dividend yields, providing steady and predictable income while preserving your capital. JNJ was added to the portfolio on 6/25/15 at a price of $99.12 (the stock closed at $99.36 on 8/18/15). To quickly view the 25+ years of JNJ’s dividend data and 10+ years of critical fundamental data we look at to analyze the company, click here. Business Overview With over $70 billion in sales spread between pharmaceuticals (43% of sales, 36% operating margin - immunology, infectious [...]
KO’s Clock is Ticking
KO’s dividend is very safe (94 Safety Score), and it has slightly below average growth potential (47 Growth Score). The stock’s dividend yield is 3.2%, placing it in the 63rd percentile of all current yields (i.e. KO’s yield is higher than 63% of other dividend-paying stocks). For investors seeking moderate but safe income with less concern about long-term growth potential, KO could be attractive. To see the 25+ years of dividend data and 10+ years of fundamental data that we use to evaluate KO and its dividend, click here. With that out of the way, let’s look at some of the differences between KO and PEP and better understand the strategic shifts KO is making to stay relevant in the [...]
PEP – A Durable, High Quality Dividend
PEP is a core holding in our Top 20 Dividend Stocks portfolio because of its extremely safe dividend (94 Safety Score), above average dividend growth prospects (58 Growth Score), and reasonable dividend yield (2.8% yield is in the 56th percentile of all current dividend yields). The stock was added to the portfolio on...
P&G – Value Trap Or Prime Retirement Stock?
P&G is a core holding in our Conservative Retirees dividend portfolio because of its extremely safe dividend (88 Safety Score) and relatively attractive dividend yield (3.5% yield is in the 67th percentile of all current dividend yields). The stock was added to the Conservative Retiree portfolio, which was built to provide safe and predictable dividend income, on 7/1/15 at a price of $79.72 (the stock closed at $76.39 on 8/12/15). Business Overview P&G provides branded consumer packaged goods and generated $76 billion in sales last year across more than 180 countries. Its biggest brands are Pampers (13% of sales), Tide (6%), and Head & Shoulders (4%). In total, the company has over 20 billion-dollar plus brands. P&G has been [...]
MMM: A Core Dividend Growth Stock for Long-term Investors
MMM makes it into our Top 20 Dividend Stocks list. The company is exceptionally managed and diversified across numerous profitable markets. The dividend is extremely secure and reliable with 10%+ growth potential going forward. With the stock selling off 10% over the past six months, now looks like a good time to consider MMM for long-term dividend growth investors. Business Overview 3M is a diversified technology company that operates globally in five segments, each of which recorded mid-single digit organic sales growth in 2014. 3M is an extremely large company with over $30B in revenue and over 60% of sales coming from outside of the US. 3M's segments cover nearly all end markets (from industrial adhesives to medical products [...]
3 Reasons Buffett Blew It on IBM
The following piece is intended to shed greater light on the issues causing IBM’s current struggles, their potential persistence, and the key points underlying the bull and bear cases. Despite being a technology stock, IBM has Buffett’s fingerprints all over it. Buffett started buying IBM in the $170s in 2011 (IBM most recently closed near $158) and upped his position during Q4 2014. Is Buffett making a big mistake buying more shares of IBM, or should long-term dividend investors look to add or initiate a position? Read on to learn if we think now is the time to add IBM to our notable Top 20 Dividend Stocks list. What Does IBM Do? If you are like me, understanding and analyzing [...]
Automatic Data Processing: High Quality Dividend Growth
Automatic Data Processing (ADP) is a durable business that provides mission-critical software and outsourcing solutions. The company’s high mix of recurring revenue (91% retention rate), participation in large and fragmented markets (10% share in $100+ billion market), strong balance sheet ($1.8 billion net cash), asset-light business model, and commitment to shareholders (40 years of consecutive dividend growth; targets total return in the top quartile of the S&P500) underscore its fundamental strength. With a Safety Score of 99 and a Growth Score of 82, ADP is one of the more attractive dividend stocks and was added to our Top 20 Dividend Stocks list on 6/29/15 at a price of $80.91 . Business Description: ADP provides a range of solutions, via [...]