Dividend paying stocks discussion

ls20 said:   b16899 said:   This is $.02 advice on investment.

First, decide your life style;
Full time vs part time vs no time...

If you don't do it full time, buy ETF(ie. SPY or DIY or QQQ...) when there is a CRUSH and everyone is panic.
...


great idea,
....if you know for how long people are going to continue to panic

I gave a general directions, people has to do their own leg works.

For example, buying down or buying up.

Wait SPY to crush to $140 and buy some
$130 buy some

$120 buy some

$110 buy some

$100 buy some

$110 buy some

$120 buy some

$130 buy some

....

This is just a example. Do your own research and plan your own strategy.
The person who ask you to hold his/her hands is interested in your money not your hands.

My latest trade:

Picked up DE at $89.16. Sold Jan 17 2015 $90 call for $10.36 each. If the stock does not crater, expected yield around 10% per-year (dividend included). 11% downside protection (without including dividend cashflow). If the stock get exercised after a year, would get the benefit of long term capital gains on the call premium since that would alter my cost basis. And if DE raises dividend, I benefit even more.

Note: Interesting read below on mis-pricing of long-term option. The above option is not that long - but still that is along the lines of what I am thinking.

Mispricing of long term options

cooldude9919 said:   thoughts on WMC vs TWO ? TWO at/near 52 week high, too high for good entry point?? WMC below 52 week, seems on its way up, good 4th qtr, decent entry?

Interesting dividend payouts. Based on the charts, clearly WMC looks better - as you said, TWO near its high. But I personally don't much about these two.

cooldude9919 said:   Got 100 shares of agnc at 31.60 with the drop due to new shares. Seems to always bounce back up after this, so with the dividend comming up next month, seems like a decent entry point?

Nice call. you were right.

PrincipalMember said:    [Feb 22]

I do wait for pullbacks. Eg. - I won't buy PG now - almost trading at its 52-week high.

While the trend of stock increasing near the dividend date tends to work, it is not a shoo in since the street knows about it too. And I don't like to deal with short term options - commission and spreads make it somewhat non-interesting.

I tend to sell covered calls on stocks with dividends. Goal is around 10 to 12% with dividend + appreciation + call premium. Covered calls tend to somewhat balance the higher price of the stock - i.e. if the stock is rising, the money I will make with covered call will rise too - so I am not so picky about waiting for the stock to hit a super low price. If it meets my criteria of being a nice point away from the high and the 10/12% number, I will go for it. One thing that I have learned with call options on dividend paying stocks is that typically the street will exercise the call before the last dividend if the stock has gone up enough - so that needs to be factored in the expected gain calculation - i.e. less earnings from dividend but shorter investment period].

Have been doing well with a whole range of stocks with buy on pullback and covered call. CAT, DE, YUM, CCL, AXP, M, KSS, GIS, TM, BA, NOC, BMY, BHP.... BHP and YUM have been interesting. BHP took a hit after I bought it but covered call saved my bacon. Closed the call for very small premium and then sold another call later when the stock recovered. YUM really hit a home run but then the Chinese bad chicken caught up with it - but at no point, I lost any money on it and I think I am still on track to make the money that I anticipate making on it (unless bad chicken turns into bad chicken II). [Note to newbie's: Don't use my past list to make as indicative of good trades - they were good trades when I made them - but I probably would not buy any of them right now]. TM was interesting too - really took off. Sold the stock and bought a slightly deeper in the money option to create a spread. This way, got most of my 10% gain in a couple of months but I free up the capital for new investments. No more dividend to be had but letting the option premium time decay.

Most recent purchases: TWC, LMT, LTD, sold DRI Jan 2014 $45 put for $4.90. Bought COP/XOM without offsetting covered calls - hoping to sell calls later. Bought WMT without offsetting call when memo about sales was leaked a few days ago and it took a nice dip. WMT doesn't have a high dividend but expecting appreciation. Holding MCD without covered calls - again expecting appreciation as the bad chicken memory fades during the year.

Hitting home runs on few of my stuff. Everything doing well with the market - but YUM afterhours today - Wow! MCD has been on fire lately, DRI has gained a bunch.

Anyone still out there? Have some big dividend names taking price dips over the last few days: PG, IBM, T.

SaulHudson said:   Any feeling positive or negative on Accenture, ACN? Decent yield, solid dividend growth, and low payout ratio. After my own personal experience with the company, I was considering picking them up because I love the business model.

I like ACN but what is holding me back is the ruthless competition with the Indian outsourcers.

what about tabacco stocks? Phillip MOrris or Lorrilard? They pay good div don't they?

You really only need about 20 stocks to get to the point where your basket is diversified enough to behave more like an index fund. You shouldn't try to "beat the market" but hand picking can give you exctly the kind of investment (risk, return, dividend yield) you want. Better yet expenses will be VERY low compared to an actively managed mutual fund and if you hold your stocks you can avoid realizing cap gains (another problem with active funds).

I get 4% and use the following criteria:
1. Large cap industry leader.
2. Payout ratio no more than 60% - this is the percent of profits that goes to dividends and speaks to sustainability
3. Solid revenues and profitability over time.
4. 3% div yield+

I found there are really a couple of flavors that get through this screen. Established "cash cow" businesses like mcdonalds, clorox, colgate, WalMart, GE...and commodity related companies like conoco phillips that have a high payout but more price volatility. I prefer the former.

If you decide to go with an advisor, read this.

I was about to brag about PBI; an 11% dividend and up 50% this year.

Well, they cut the dividend in half, and the market took half of this years gains with it.

supersnoop00 said:   I was about to brag about PBI; an 11% dividend and up 50% this year.

Well, they cut the dividend in half, and the market took half of this years gains with it.

Yeah I bought it back in November at around $11.30 so even though it took a hit today it still has been a good gain. All about long term.

In for some LINE today.

I like Intel closer to 20. Silvermont (new mobile platform) looks to be a strong play into mobile. Haswell will make substantial gains in battery life which will hopefully bring ultrabook sales up a bit. Then there is always a potential foundry deal with AAPL.