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These are our most recent articles. Also see which stocks have been this week’s best and worst performers.
Johnson & Johnson (JNJ): 3% Dividend Yield and Predictable Income Growth for Retirees
JNJ reported Q3 earnings last month. Currency headwinds hurt reported sales growth by about 8%, and the expected run off of hepatitis C products added additional pressure. Excluding these two items, JNJ’s revenue would have grown by 5.6%, in line with last quarter’s adjusted growth and not bad for a company with over $70 billion in sales last year. There are many reasons why we like JNJ and have made it a core position in our Conservative Retirees dividend portfolio. About 70% of the company’s sales are from products that collectively hold #1 or #2 global market share positions, over half of revenue is generated overseas (rising healthcare demand in emerging markets), its product portfolio is well diversified by [...]
ExxonMobil (XOM): A Dividend Aristocrat Nearing Trough Demand
XOM’s Q3 results saw revenue drop by more than 35% and earnings fall nearly 50% compared to 3Q14, driven by weak upstream results (upstream earnings fell 79%). However, strength in XOM’s downstream businesses resulted in earnings actually rising 1% compared to last quarter. While headline figures remain ugly, we are optimistic that XOM’s fundamentals are nearing a bottom and are happy to keep the stock in our Conservative Retirees dividend portfolio. With most of its earnings dependent on the price of oil, there is only so much XOM can do to manage its business throughout the current downturn. The company grew its production by 2.3% in Q3 compared to the year-ago quarter, and XOM appears to be doing a [...]
Living Off Dividends in Retirement
Living off dividends in retirement is a dream shared by many but achieved by few. In today’s environment marked by rising life expectancies, extremely low bond yields, and a 7-year bull market, retirees face challenges on all fronts to build a consistent income stream that will last a lifetime. Before zeroing in on any particular strategy or investment vehicle, retirees need to understand how much risk they are willing to tolerate in the context of their entire portfolio and the corresponding rate of return that can reasonably be achieved. While each of us will ultimately reach different conclusions and asset allocations, we are united by common desires – to maintain a reasonable quality of life in retirement, sleep well at [...]
Procter & Gamble (PG): Organic Growth Ahead…Maybe?
P&G’s earnings report was well received by the market last week. Currency-neutral earnings per share grew 12%, margins expanded nicely, and management’s expectations for improving organic sales growth trends were reaffirmed. After analyzing the report, we are happy to keep P&G in our Conservative Retirees dividend portfolio. However, many investors remain concerned about underlying volume trends across each of P&G’s segments. Organic sales declined by 1% last quarter, driven by favorable price/mix benefits of 3% and a volume decline of 4%. Volume declines were seen across every segment: Beauty -4%, Grooming -3%, Health Care -6%, Fabric Care & Home Care -2%, and Baby / Feminine / Family Care -6%. The primary fear is that organic sales growth built on [...]