Starbucks (SBUX): One of the Best Dividend Growth Stocks in the Market
Since its founding in Seattle in 1985, Starbucks (SBUX) has grown into the world’s largest coffee empire and the 67th most valuable brand on earth. Along the way, Starbucks’ amazing growth story has made countless investors amazingly rich. For example, $10,000 invested in Starbucks 20 years ago would today be worth $283,520.03 compared to just $44,044.43 invested in the S&P 500. That’s annual total compound returns of 18.1% and 7.7%, respectively, showing just how well founder, CEO, and Chairman Howard Schultz has been at generating long-term wealth for his shareholders. Of course past performance is no guarantee of future success, and one must always invest with an eye towards future growth, not just past glories (see seven [...]
CenturyLink (CTL): Safe Dividend Income or a High-Yield Telecom Trap?
Telecom companies have long been a favorite among income investors thanks to their utility-like business models, which make for steady cash flow and allow for generous, secure, and slowly growing dividends (learn about the best sectors for dividend income here). With global interest rates at their lowest levels in human history, it’s understandable why high-yield seekers might be attracted to CenturyLink (CTL) and its 7.7% yield, which is one of the highest in the telecom industry and broader market. But always remember that if something seems too good to be true, especially in the world of investing, it usually is. Let’s take a closer look at this regional telecom for consideration in our Conservative Retirees dividend portfolio and see [...]
British Petroleum (BP): A High-Yielding Dividend Oil Stock to Avoid
With the current oil crisis dragging on far longer than initially anticipated, many big oil dividend stocks such as BP, Chevron (CVX), and Royal Dutch Shell (RDS.A) are offering tantalizing high-yields. However, given the capital intensive nature of this business, the cyclical nature of the industry, and the unpredictable nature of crude and natural gas prices, many income investors are understandably concerned about just how safe these big oil dividends are. Let’s take a look at BP’s business model, balance sheet, risks, turnaround plans, dividend profile, and valuation to see why this is one oil giant that is probably best avoided for conservative investors living on dividends, except perhaps by the most risk tolerant dividend investors. Business [...]
Building a Dividend Retirement Portfolio: A Real-Life Story
Many of us are managing dividend portfolios designed to deliver safe retirement income. I oversee our Conservative Retirees dividend portfolio, which is designed for people living off dividends in retirement. Safe dividends, income growth in excess of the rate of inflation, and low volatility are some of the main goals of any retirement portfolio. I have had countless discussions with all sorts of dividend investors about how they became involved with dividend investing and how they approach building a dividend retirement portfolio. Every story and approach is unique and usually provides a few new tidbits of wisdom. Most recently, I connected with Dividend Sleuth, a popular author on Seeking Alpha who has been investing in stocks [...]
Welltower (HCN): A High-Yield Medical REIT Blue Chip
A great way of building long-term wealth is to ride secular mega-trends. One of the largest of these is the aging of America’s population, which is expected to see the population of those of 75 years of age double over the next two decades. Source: Welltower Investor Presentation Thanks to improvements in medical care, people are not just living longer, but consuming more and more medical resources as they age. In fact, as you can see, the amount of annual per capita healthcare spending rises exponentially the older you become. This means that investing in certain companies involved with healthcare can be a great way to profit over time from this major economic shift. One way [...]
What HCP’s Upcoming Spin Off Means For Dividend Investors
HCP Inc. (HCP)’s 30-year dividend growth streak has long made it the darling of high-yield dividend growth investors. HCP is also the only real estate investment trust (REIT) in the S&P Dividend Aristocrats Index. Investors can view analysis on all of the dividend aristocrats here. Source: Simply Safe Dividends However, as covered originally back in March (you can read the original investment thesis here), the company has hit some major rough patches in the last few years. Now management has announced that it will spin off its troubled ManorCare skilled nursing facilities, or SNFs, into a separate REIT, which will greatly change the nature of HCP’s business model going forward. Find out why [...]
A Guide to Conservative Income Producing Option Strategies for Dividend Stocks
With interest rates at their lowest point in history, once safe income-producing assets such as 10- and 30-year Treasury bonds have seen their yields plunge to pitiful rates that are just high enough to keep up with inflation. And while high-quality, dividend growth blue chips such as Pfizer (PFE), Coca-Cola (KO), Procter & Gamble (PG), and Johnson & Johnson (JNJ) are a great way of generating higher yields in this zero interest rate world, many investors are worried that the recent run up in such stocks means they are exposing themselves to larger short-term downside risk. In other words, fears of a potential dividend stock bubble have many people wondering where they can turn to generate solid returns [...]
Pfizer (PFE): Safe and Steady Dividends
Pfizer (PFE) is a blue-chip dividend stock that has paid a consistent dividend for multiple decades. Furthermore, over the last 20 years the total dividends paid per share has increased at a nearly 10% compound annual growth rate (CAGR). In recent years, however, Pfizer’s total dividend growth rate has slowed and the payout ratio is now over 90%. Should investors be concerned that this global pharmaceutical giant’s best days are behind it or, worse, that another dividend cut could be forthcoming? Let’s start with a look at the business. Business Analysis Pfizer was incorporated in 1942 and today is a global biopharmaceutical company with operations all across the globe. Their portfolio of products includes mainly [...]
ExxonMobil (XOM): Safe Haven for Oil Dividend Investors During the Oil Crash
ExxonMobil (XOM) is the ultimate blue chip stock in the oil patch, but even it hasn’t been spared the carnage of what’s being called the worst oil crash in nearly 50 years. So naturally, many conservative investors living off dividends are wondering how safe this legendary oil giant’s dividend really is. Let’s take a look at why, and how, Exxon plans to ride out this oil storm, and not just maintain the current payout, but also continue growing it as it has for over a third of a century. Business Description ExxonMobil is the world’s largest publicly traded integrated oil company, meaning it profits from extracting value from every stage of oil production, refinement, and transformation into [...]
Interview With Portfolio Manager and Dividend Book Author Tim McIntosh
I recently had the pleasure of interviewing Tim McIntosh. Tim has been managing money since 1999, is a Certified Financial Planner, has authored a handful of investing books, and has studied many different historical periods of the market. He embraces an investment strategy focused on capital preservation and consistent dividend growth. His focus shares many traits with how I go about managing our Conservative Retirees dividend portfolio. Here is Tim's complete biography: Timothy McIntosh is the author of four investment books including "The Snowball Effect", "The Sector Strategist", "The Bear Market Survival Guide", and a contributing author to "Comprehensive Guide to Financial Planning Strategies for Doctors and Advisors". His new book on dividend investing is available in Kindle and hardcopy formats [...]