Wal-Mart (WMT) Issues Disappointing Guidance. What About the Dividend?
I came across a statistic last week that sounded unbelievable until I thought more about my own behavior. In 2015, 205 million U.S. consumers shopped online. The growth of e-commerce is nothing new, and the number of online shoppers will continue to rise. I wasn’t surprised by this fact. Instead, a recent survey caught my attention. It found that more than half of U.S. online shoppers start their product searches on Amazon. Amazing! Amazon is increasingly the most convenient and cost effective shopping option for consumers. Approximately 55% of those surveyed check out Amazon first when looking for a product, representing an increase from 44% a year earlier. As Amazon’s scale, breadth of inventory, and distribution [...]
A Guide to Investing in Real Estate Investment Trusts (REITs)
Investing in Real Estate Investment Trusts (REITs) can provide dividend investors with high yields, steadily growing payouts, nice diversification, and an attractive income stream for retirement living. However, REITs have a number of complexities and risks that should be understood before making any investments. Before jumping into the essential information investors need to know about REITs to make better informed decisions, it’s worth highlighting some of the sector’s appeal. For one thing, $100 invested across all REITs in 1971 would have grown to nearly $6,000 in 2015, representing compound annual growth of about 10%: Source: Simply Safe Dividends, REIT.com When it comes to building wealth few industries are more time tested, or successful, than real estate. In [...]
Comcast (CMCSA): High Marks for Dividend Safety and Growth, But What About the Cord-Cutters?
At first glance, Comcast (CMCSA) looks like an investment every dividend investor should consider. The company has increased the dividend every year since reinitiating it in 2008, recorded nearly 23% annual dividend growth over the last five years, maintained a relatively low payout ratio, and enjoyed stability from its recession-resistant businesses. These are some of the characteristics we look for in our search for safe dividend stocks (see all five of our tips on how to find safer stocks here). Comcast shares many attributes with the investments in our Top 20 Dividend Stock portfolio. However, with cord cutting gaining more and more traction, is Comcast’s future as bright as its past? Business Description Comcast is a global media company [...]
Ferrellgas Partners (FGP): Another Lesson on Dividend Safety
I get a lot of questions about master limited partnerships (MLPs) when it comes to the topic of dividend safety. Many dividend investors are attracted by the high yields and steady cash flows offered by MLPs. A number of these businesses have paid uninterrupted dividends for decades as well. However, like any industry, not all MLPs are created equally. Some are better-capitalized and more effectively managed than others. As readers know, I consider myself to be a conservative dividend investor. I like simple businesses with time-tested operations, consistent free cash flow generation, reasonable balance sheets, and sensible management teams that have shown a commitment to paying dividends. It's true that a handful of MLPs possess [...]
Phillips 66 (PSX): Warren Buffett’s New Favorite Dividend Growth Stock
Warren Buffett is history’s greatest investor, and so when his company, Berkshire Hathaway (BRK.B), takes a major stake in a company the world takes notice. Investors can read analysis of all of Warren Buffett’s dividend-paying stocks here. Over the past few months Berkshire has increased its stake in Phillips 66 (PSX), to 79.5 million shares; worth $6.25 billion, and representing 14.8% of the company. Let’s take a look at why the Oracle of Omaha is so interested in Phillips 66, and more importantly, whether this dividend growth stock could deserve a spot in a conservative investor’s diversified income portfolio. Business Description Source: Phillips 66 Investor Presentation Phillips 66 was spun off from ConocoPhillips in 2012 [...]
HP Inc (HPQ): Safe Dividend Growth or a Value Trap?
Back in 1939, long before Steve Jobs, there were two guys in Palo Alto, Bill Hewlett and David Packard. Armed with less than $600, they started a small electronics testing company. Over the next 70+ years, Hewlett-Packard grew into one of the world’s largest technology firms with over $100 billion in annual sales. Last November, the current HP Inc. was created as one of two successors of Hewlett-Packard (the other half is HP Enterprises). The idea was to take the mature HP Inc. operations and create a cash-generating, dividend-paying machine with leaner operations. For income investors, HP has been a reliable dividend-paying stock for over 25 years and increased its payout for 6 consecutive years. [...]
Chevron (CVX): How Safe is the Dividend?
Chevron (CVX) looks enticing when taking a cursory look at the historical dividend statistics. The stock currently yields around 4.3% and has provided highly reliable dividend growth over the years. Chevron’s dividend has increased by 7.8% per year over the last 20 years and by 8.5% annually over the last five years. The company is also a dividend aristocrat, having raised its dividend for over 28 straight years. Investors can learn more about dividend aristocrats and download their data here. Despite Chevron’s appealing historical dividend growth, income investors have been burned over the past year with a number of high profile dividend cuts in the oil and gas industry. While Chevron has been a favorite [...]
Traditional IRAs and Roth IRAs: Which is Better for Dividends?
For investors looking to build a dividend-paying nest egg for their golden years, an individual retirement account (IRA) is the most common arrangement. Any number of investment options may be placed within an IRA, and in exchange for showing some initiative and taking on part of the responsibility of financing your own retirement, Uncle Sam agrees to defer taxation on money within IRAs. Two types of IRAs exist -- the Traditional IRA and the Roth IRA. While both share a significant number of features, there are also major differences between the two. It’s these similarities and shared characteristics that often confuse many consumers. For investors holding dividend stocks in IRAs, this matter can appear even more [...]
9 Financial Planning Tips for Responsible Living
If you weren’t born into riches, chances are that you’ve had to grow up and get a job to earn the money you need to survive. Particularly if you’ve formed a family along the way, it’s important to do what you can to protect the money you’re earning, the money you’re saving, and the people who have come to depend on you and your income. Let’s take a look at some basic financial planning tips that can help you better secure your finances and build a solid foundation for your family’s future. 1. Build an emergency reserve fund The first and most basic step toward improving your financial situation also happens to be the one that is [...]
SeaWorld (SEAS) Cuts Dividend Over 50% – Dividend Safety Score: 3
SeaWorld Entertainment (SEAS) was the latest company to announce a dividend cut, dropping the news yesterday evening. SeaWorld declared a quarterly dividend of 10 cents per share, which is down more than 50% from its previous quarterly dividend of 21 cents per share. After the next quarterly payment, SeaWorld will completely suspend its dividend. To make matters worse, the company's stock was trading down as much as 10% after the market closed, adding to its -35% plunge year-to-date. Prior to the dividend cut, SeaWorld's shares offered a high yield of 6.6%, but it proved to be a trap. Investors were beginning to wonder about the sustainability of SeaWorld's dividend, but management didn't offer any hints of an [...]