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These are our most recent articles. Also see which stocks have been this week’s best and worst performers.
Paychex (PAYX): Safe 3.5% Dividend Yield, No Debt, and Excellent Business Consistency
Paychex (PAYX) has paid uninterrupted dividends since going public in 1988. While the company held its dividend flat during the financial crisis, it has otherwise increased its dividend every year since the mid-1990s and currently yields 3.5%. PAYX has a very durable business model that throws off predictable free cash flow. We believe its dividend is very safe and offers at least average growth prospects, making it a good fit for our Conservative Retirees dividend portfolio. Let’s take a closer look at the business. Business Overview PAYX was founded in 1971 and provides a range of payroll, human resource, and benefits outsourcing services to over 590,000 small and medium-sized businesses. It offers a wide range of services [...]
Suncor (SU): Warren Buffett’s Big Oil Bet Has a Safe 3.7% Dividend Yield
Published on 1/9/2016 Warren Buffett only owns two stocks in the energy sector, and they both pay a dividend – Suncor (SU) and Phillips 66 (PSX). SU’s dividend yield is 3.7%, and it has increased its dividend for 13 consecutive years. Buffett first bought into SU in 2013, investing around $500 million at the time. He subsequently purchased more shares during the third quarter of 2015, making SU close to his 20th largest holding. Depressed oil prices have most energy investors worried about the safety of their dividend payments, much less their future growth potential (which is expected to slow significantly in 2016). However, much like Buffett hopes a new stock purchase remains stagnant or even declines [...]
Compass Minerals (CMP): 12 Consecutive Years of Dividend Growth, 3.6% Yield, and Recession-Resistant Demand
Published on 1/8/2016 Compass Minerals (CMP) has increased its dividend every year since going public in 2003 and boasts an operating history dating back to 1844. Its businesses are simple to understand, largely uncorrelated with the economy, and meaningfully advantaged by a unique set of assets that is, in many cases, practically impossible to replicate. The stock also has an attractive dividend yield of 3.6%, a 10% historical dividend growth rate, a reasonable earnings multiple (14x), and meaningful free cash flow growth potential over the next five years. Temporary macro headwinds (the mild winter weather in the Midwest and weak agricultural markets) are impacting the business at the moment. In fact, CMP issued a press release yesterday evening [...]
Thomson Reuters (TRI): 22 Consecutive Years of Dividend Growth and a Safe 3.6% Yield
Published on 1/7/2016 Thomson Reuters (TRI) has raised its dividend for 22 straight years and is one of the most consistent free cash flow generators around. The company’s business benefits from significant amounts of recurring revenue (87% of sales), While TRI’s rate of dividend growth is modest, we believe the company’s 3.6% dividend yield and current valuation are attractive. For these reasons and more, we hold TRI in our Conservative Retirees dividend portfolio. Business Overview TRI was created when Thomson acquired Reuters (a 160-year-old global news and financial data service) for about $17 billion in early 2008. Many of the company’s solutions were assembled through hundreds of acquisitions made over the years. Today, TRI sells electronic content [...]