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Apple (AAPL): Reviewing One of Warren Buffett’s New Dividend Stocks
Apple (AAPL) is a blue chip stock that recently reinstated the dividend. Since becoming a dividend payer again in 2012 (it was suspended from 1996-2011), they have increased the quarterly dividend by 50% from 38 cents per share to 57 cents. With a relatively low payout ratio, high returns on invested capital, and an extremely valuable consumer brand, Apple looks undervalued at only 13x 2016 earnings. Warren Buffet’s lieutenants certainty agree as Berkshire invested over a billion dollars in the company this year. However, in a world where technology trends change drastically quickly, should investors count on Apple to deliver sustainable dividend growth? Business Analysis Apple is a global technology company with a rich history of product innovation. In [...]
Disney (DIS): 3 Risks to Consider Despite the Strong Dividend Growth
Disney (DIS) is one of the most iconic companies in the world and has rewarded shareholders with 11.7% annual dividend growth over the last 20 years. However, that hasn’t stopped the stock from slumping more than 20% since hitting an all-time high in late 2015. Today, Disney’s stock trades for about 15.3x forward earnings estimates. It’s unusual to find such a high quality business trading at a seemingly reasonable price. I wrote my initial thesis on Disney in mid-February 2016 (click here to read it). With the stock’s continued slump, now is a good time to dig deeper into some of the concerns I have with the business. Let’s take a closer look at the [...]
C.H. Robinson (CHRW): Quality Dividend Growth at a Reasonable Price
C.H. Robinson (CHRW) has raised its dividend for 18 consecutive years and rewarded shareholders with double-digit annual dividend growth over the last decade. The company’s dividend scores strong marks for safety and growth, and its business model generates excellent free cash flow in practically every economic environment. With large and fragmented markets and numerous competitive advantages, C.H. Robinson has potential to deliver double-digit earnings per share growth going forward. Let’s take a closer look at the business to determine if it could be an attractive dividend growth investment today. Business Overview C.H. Robinson is one of the largest third-party logistics companies in the world and has been in business for more than 110 years. The business essentially [...]
REIT Taxes: A Short Lesson on Real Estate Investment Trust Taxation
Since their inception in 1960, Real Estate Investment Trusts, or REITs, have become an extremely popular option for income investors because of their reliable payouts and immense capital appreciation potential. However, REIT taxes are an important issue to understand. Conservative investors often favor REITs over traditional stocks because variables that typically have a negative impact on the broader market tend to have a less powerful effect on REITs. They’re not completely insulated, but it usually takes a down market longer to hit a REIT thanks to rising rental prices and the historic appreciation of real estate in general. Before diving in to REIT taxation, let's quickly review what REITs are. What Is a Real Estate [...]