Coca-Cola (KO): Excellent Historical Dividend Growth, But What Does the Future Hold?
Coca-Cola (KO) is one of Warren Buffet’s dividend stocks that has paid a consistent dividend since 1920 and increased its payout for the past 54 years. More recently Coke has grown its dividend at a 9% compound annual growth rate (CAGR) over the last 10 years. Its extraordinary track record and stable business model put Coca-Cola in the rarefied air of a Dividend King. Presently, the company looks attractive with a 3.2% yield and the potential for further dividend increases, making the stock a particularly favorite for investors living off dividends in retirement. However, with slowing growth due to consumers moving away from their core products as a result of the healthy living trend, should investors continue to count [...]
Williams (WMB) is the Latest Energy Infrastructure Company to Cut Dividend
Williams Companies (WMB) had paid higher dividends each year since 2004, grown its dividend by 38% per year over the last five years, and earned most of its income from regulated assets generating "safe" fee-based revenue from long-term contracts. The company had even been in business for more than 100 years, more than proving itself as a durable operator. However, none of that mattered on Monday when the company announced a 69% cut to its quarterly dividend, reducing its payout from 64 cents per share to 20 cents. While Williams Companies isn't a master limited partnership (MLP), it has many similarities and a 60% ownership stake in MLP subsidiary Williams Partners (WPZ). Williams provides energy infrastructure that connects North America's [...]
Nintendo and Pokemon Go: A Lesson on Behavioral Investing
There is a famous investment tip that says, “Buy the rumor, sell the news.” Stocks sometimes trade higher (or lower) heading into “major” news announcements before reversing course immediately following the event. Anticipated market-moving news items can include quarterly earnings reports, business rumors, macroeconomic trends, new product launches, and more. Not surprisingly, there is typically a lot of hype leading up to such an event, and hype often results in emotionally-charged trading decisions. Nintendo’s stock provided the latest example. Until very recently, Nintendo’s stock floundered for a number of years as the rise of mobile gaming challenged demand for traditional video gaming. Source: Simply Safe Dividends On July 6, 2016, Pokemon [...]
Dividend Safety Analysis: Cisco (CSCO)
Are there any dividend stocks you are considering buying but want to be sure their dividends are safe before going any further? Leave a comment at the end of this article with a stock you would like me to evaluate for dividend safety. This week, I will be taking a look at the dividend safety of technology giant Cisco (CSCO). My full thesis on Cisco can be seen here, but I will focus primarily on its Dividend Safety Score in this article. Before analyzing the company’s dividend, let’s quickly recap how Cisco makes money. After all, one of the best pieces of investing advice is to only invest in simple, easy-to-understand businesses. Cisco has been [...]
Is Caterpillar’s Dividend Still Safe?
After failing to increase its dividend in June like it has in past years and continuing to report double-digit declines in sales and earnings this week, Caterpillar has many dividend investors wondering about the safety of its current payout. Caterpillar’s revenue has declined from $66 billion in 2012 to a projected $40 billion in 2016. The company’s retail sales have now fallen for more than 40 consecutive months. None of this is new news from when I wrote my initial thesis on Caterpillar last fall. However, the macro situation does not appear to be getting any better. In fact, billionaire hedge fund manager David Einhorn is now short Caterpillar. He expects the company’s stock to be more [...]
Top 20 Holding Linear Technology (LLTC) Spikes 29% on Takeover Bid
Linear Technology (LLTC) is a company I have owned in our Top 20 Dividend Stocks portfolio since July 2015. Since initiating a position in the company, LLTC's stock has returned more than 50%. News surfaced this afternoon that Analog Devices (ADI) was planning to make a bid to acquire Linear Technology. LLTC's stock jumped nearly 30% on the takeover news, which was made official shortly later. Linear Technology is the second company in our dividend portfolios to be acquired this year (Valspar was the other holding and was acquired by Sherwin-Williams in March 2016). Technology is not one of the best sectors for dividend income because of its fast pace of change and demanding reinvestment requirements for companies to stay relevant [...]
Warren Buffett’s Top 10 Pieces of Investment Advice
Warren Buffett’s investment advice is timeless. I have lost track of the number of investing mistakes I have made over the years, but almost all of them fall into one of the 10 buckets of investment tips given by Warren Buffett below. By keeping Buffett’s investment advice in mind, investors can sidestep some of the common traps that damage returns and jeopardize financial goals. Not surprisingly, Warren Buffett certainly practices what he preaches. Buffett’s portfolio of high dividend stocks is perfectly aligned with his guiding principles. Warren Buffett’s Investment Advice After much deliberation, I settled on my 10 favorite Warren Buffett investing tips in the list below. Each nugget of wisdom is supported by at least [...]
Automatic Data Processing (ADP): 41 Straight Years of Dividend Increases
With more than four consecutive decades of dividend increases, Automatic Data Processing (ADP) is one of my favorite dividend aristocrats. The company’s excellent dividend growth track record is the result of its reliable business model. ADP benefits from providing mission-critical services, generating a high percentage of recurring revenues, maintaining a strong client retention rate, running asset-light operations, and throwing off loads of free cash flow each year. Although ADP’s stock has nearly doubled the market’s performance over the last decade, the company has plenty of room for continued growth. Not surprisingly, ADP scores extremely well for Dividend Safety and Dividend Growth and is the type of business I like to own in our Top 20 Dividend [...]
Accenture (ACN): A Quality Dividend Stock With Solid Safety & Growth Potential
Accenture (ACN) is the type of high quality dividend growth stock I like to own in our Top 20 Dividend Stocks portfolio. The company has raised its dividend every year since it began paying one in 2005, recording annual dividend growth greater than 20% during that time period. Accenture’s dividend scores extremely high marks for safety and growth thanks to the company’s healthy payout ratios, excellent free cash flow generation, clean balance sheet, and proven durability. Let’s take a closer look at Accenture as a potential investment opportunity for investors building a dividend portfolio. Business Overview Accenture is one of the largest professional services companies in the world and provides a range of end-to-end services and [...]
Verizon (VZ): A High Yield Dividend Stock Owned by Warren Buffett
Verizon (VZ) is one of Warren Buffett’s high-yield dividend stocks. The company has paid dividends for more than 30 years and has increased its dividend for over 10 straight years. Paying uninterrupted dividends for as long as Verizon has is usually the sign of a durable company. Verizon is a blue-chip dividend stock that enjoys high barriers to entry in its core markets and has made a number of strategic investments to prepare itself for the technological changes impacting the communications industry. With a high dividend yield in excess of 4% and a very safe dividend payment, Verizon is a company I like in our Conservative Retirees dividend portfolio. Business Overview Verizon is the largest wireless service [...]