Dividend Paying stocks

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harlan247
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Dividend Paying stocks

Post by harlan247 » Sat Aug 12, 2017 11:38 am

I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Sat Aug 12, 2017 11:46 am

Do you own any other individual stocks?

If you really have to have dividends, why not look at a low cost Dividend Growth fund or ETF?

The thing is, investors have been chasing yield for eight years now. Everyone and his brother knows that interest rates are low. Why is it that after eight years of yield chasing by everyone else, that you want to start now? Pretty much I am saying you are very late to the party and the timing isn't the best. The Federal Reserve Bank has been raising short term interest rates, though so far medium and long term rates haven't been affected very much. Rising interest rates will be tough on the higher yielding stocks. You might be setting yourself up for disappointment.
A fool and his money are good for business.

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sat Aug 12, 2017 12:40 pm

harlan247 wrote:
Sat Aug 12, 2017 11:38 am
I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.
Better off with an index fund for dividend yield. Picking stocks
can be tricky. Looked at one that yielded 4.8% but had an 80 PE.
Others have forward dividend yield much higher than current EPS.
At least with index replacement a stock can be routinely replaced
in the index if and when the yield drops off.

Try these tickers - SPYD, SPHD, and perhaps SDOG or HDV. NOBL
probably has the best quality but I'd buy it in a market correction, a
bit pricey, then buy and hold.

Top 173 Dividend ETFs
age in bonds, buy-and-hold, 10 year business cycle

MotoTrojan
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Re: Dividend Paying stocks

Post by MotoTrojan » Sat Aug 12, 2017 12:56 pm

harlan247 wrote:
Sat Aug 12, 2017 11:38 am
I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.
Why? Read up on Total Return, then decide if you actually need a dividend paying stock/fund to achieve your goal.

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CABob
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Re: Dividend Paying stocks

Post by CABob » Sat Aug 12, 2017 1:08 pm

CAT, GE, HII, MCD, NOC, & T. I've owned them so long I've forgotten why. I would much rather own a couple of index funds so I am now trying to figure out how to get rid of them without paying capital gains tax. :annoyed
Bob

abner kravitz
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Re: Dividend Paying stocks

Post by abner kravitz » Sat Aug 12, 2017 8:26 pm

Lockheed Martin (LMT) and Raytheon (RTN). They are a little pricey (PEs around 25) and have already made big moves, but unfortunately I don't see that business shrinking in our lifetimes and they also have been growing their dividends at 10% per year. They are my 2 favorite individual holdings. Of course, past performance is no guarantee etc., and you are probably better off in funds as everybody suggests.

covepatrol
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Re: Dividend Paying stocks

Post by covepatrol » Sat Aug 12, 2017 8:30 pm

VGR & PSEC

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arcticpineapplecorp.
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Re: Dividend Paying stocks

Post by arcticpineapplecorp. » Sat Aug 12, 2017 9:04 pm

welcome to the forum.

Before you go picking high yield stocks you might want to read this article by Larry Swedroe titled, "The Irrelevance of Dividends"

http://www.etf.com/sections/index-inves ... nopaging=1

He makes the argument that you should only care about total return and whether or not a company pays a dividend makes absolutely no difference to the stock's total return. This is so hard to fathom that there was a very long running post of Larry's (I'm sorry I can't find it. Perhaps someone can provide the link) on bogleheads within the past year that people had a hard time believing it. But in this day and age, many people for some reason have a hard time separating fact from fiction.

Here's some other articles, one that makes the case "not to rely on dividend strategies to pick stocks":
http://www.cbsnews.com/news/dont-rely-o ... ck-stocks/

Here's "Why chasing dividends is a mistake":
http://www.cbsnews.com/news/why-chasing ... a-mistake/

and finally, "Should you follow a high dividend stock strategy?":
http://www.cbsnews.com/news/should-you- ... -strategy/

If you buy a stock for it's dividend and it goes out of business, guess what? You lose your dividend and your investment.

You should also consider that dividends are not written in stone. Companies can cut them any time they want. What are you going to do then, sell? Doing so could result in capital gains tax owed. Nothing wrong with cap gains, but selling because a dividend isn't paid seems like a lousy reason. Berkshire Hathaway only paid a dividend once in it's entire history (Warren Buffett says he must have been in the bathroom when the board issued that :happy ) but that didn't make it a stock not worth owning over the past 30 years just because they didn't issue regular dividends.

If you can't understand Larry's articles or can't articulate a counterargument, I'd suggest you stick to diversified low cost index funds. Your wallet will thank you later. Best of luck.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sat Aug 12, 2017 9:44 pm

arcticpineapplecorp. wrote:
Sat Aug 12, 2017 9:04 pm

If you buy a stock for it's dividend and it goes out of business, guess what? You lose your dividend and your investment.
The stocks in the dividend indexes are already in other indexes like the S&P 500.
They're not phantom stocks of any kind. Just sorted for their dividend characteristic.
If you pick a dividend fund derived from the 500 you'll have good companies.
arcticpineapplecorp. wrote:
Sat Aug 12, 2017 9:04 pm
If you can't understand Larry's articles or can't articulate a counterargument, I'd suggest you stick to diversified low cost index funds. Your wallet will thank you later. Best of luck.
There's 3 studies that were referenced in the forum. One by Siegel, one by
O'Shaughnessy, and one maintained by Morningstar. One was yield weighted,
one was equal weighted, and one was weighted by dividend size. All were
Large cap. Larry hasn't successfully contradicted their findings. So as a
valid tilt there is plenty of evidence. Stats change over time but these studies
have stayed their course so to speak. When interest rates peak is supposed to
be the best time to invest in one. :)
age in bonds, buy-and-hold, 10 year business cycle

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Sun Aug 13, 2017 12:37 am

Harlan247, I have listed the top 10 stocks that I own in the "My New 'Doo" thread. Just type "My New Doo" in the search box and the thread will come up. I also mention a few other stocks that I own. I have used the thread to post my portfolio and my actual investment results. I also post the changes that I have made in my portfolio over time.

I also figured out my 1, 3, 5, 10, and 15 year returns of my individual stocks. Pretty much, I beat the market over 1, 3, and 5 years. Long term is what counts and I have trailed the market over 10 and 15 years. I was able to calculate my returns once I figured out how to tweak a report in Quicken to calculate my results. I did a fairly conscientious job picking stocks and tried to exhibit good investor behavior but long term I still trailed the markets a bit. So you can see a real life example of someone who actually picked stocks.
A fool and his money are good for business.

indexlover
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Re: Dividend Paying stocks

Post by indexlover » Sun Aug 13, 2017 7:54 am

I loved this in your thread:
I feel like the penitent in the confession booth confessing my investing sins. Don't worry, if you read further, I bought some index funds as penance.
I know exactly how you feel :)

viewtopic.php?f=10&t=170697&hilit=DOO#p2573518
:sharebeer

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arcticpineapplecorp.
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Re: Dividend Paying stocks

Post by arcticpineapplecorp. » Sun Aug 13, 2017 9:37 am

patrick013 wrote:
Sat Aug 12, 2017 9:44 pm
The stocks in the dividend indexes are already in other indexes like the S&P 500.
They're not phantom stocks of any kind. Just sorted for their dividend characteristic.
If you pick a dividend fund derived from the 500 you'll have good companies.
Really? That's funny, I'll give two examples to dispute your claim.

1. AIG apparently fell out of the S&P500 but is now back in (as of 2013. source: http://www.reuters.com/article/us-gm-sp ... 0B20130604). Would you want to own it ? (see graph below. Orange is AIG, blue is S&P500 from S&P500's inception according to morningstar -- 8/31/76). Oh goody, AIG pays a dividend :oops:

Image

2. I don't see AOL listed as one of the stocks in the S&P500 index anymore (have to read the annual report):
https://personal.vanguard.com/us/funds/ ... undId=0040

Could that be because it's not as "good" a company as it once was? So if you bought AOL because it "was" in the S&P500 at that time, you wouldn't be happy about that now, would you? Just two examples, I know. But the point has been made.
patrick013 wrote:
Sat Aug 12, 2017 9:44 pm
There's 3 studies that were referenced in the forum. One by Siegel, one by O'Shaughnessy, and one maintained by Morningstar. One was yield weighted, one was equal weighted, and one was weighted by dividend size. All were Large cap. Larry hasn't successfully contradicted their findings. So as a valid tilt there is plenty of evidence. Stats change over time but these studies have stayed their course so to speak. When interest rates peak is supposed to be the best time to invest in one. :)
If it's better to tilt to value then that is because of "value"...as in price to book, not because of how much a dividend is paid. Yes, higher dividend yielding stocks tend to be more valuey (they're trying to entice investors to buy the stock) but that doesn't mean it's wise to invest by focusing on the dividend. It would be better to invest based on the value (price to book and/or other measures), not the dividend. Also, one reason value stocks have tended to do better is because of the behavioral story. The investors who get the premium stayed the course unlike most who bail because value underperforms for several years before having a big pop over a few shorter years. Do you think the OP is patient enough to stay the course and obtain the value premium when s/he's only concerned with how much dividends are being paid? Is the OP really reading the balance sheet of the company or just looking for highest dividend paying stocks? Is that a good metric?
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sun Aug 13, 2017 1:57 pm

arcticpineapplecorp. wrote:
Sun Aug 13, 2017 9:37 am
Could that be because it's not as "good" a company as it once was? So if you bought AOL because it "was" in the S&P500 at that time, you wouldn't be happy about that now, would you? Just two examples, I know. But the point has been made.
Common exampes of "index replacement", so most dividend funds would remove
those if not in the 500 stocks selection also.
patrick013 wrote:
Sat Aug 12, 2017 9:44 pm
There's 3 studies that were referenced in the forum. One by Siegel, one by O'Shaughnessy, and one maintained by Morningstar. One was yield weighted, one was equal weighted, and one was weighted by dividend size. All were Large cap. Larry hasn't successfully contradicted their findings. So as a valid tilt there is plenty of evidence. Stats change over time but these studies have stayed their course so to speak. When interest rates peak is supposed to be the best time to invest in one. :)
arcticpineapplecorp. wrote:
Sun Aug 13, 2017 9:37 am
If it's better to tilt to value then that is because of "value"...as in price to book, not because of how much a dividend is paid. Yes, higher dividend yielding stocks tend to be more valuey (they're trying to entice investors to buy the stock) but that doesn't mean it's wise to invest by focusing on the dividend. It would be better to invest based on the value (price to book and/or other measures), not the dividend.
Concerning dividend indexes not dividend stocks I think it's been proven a good
dividend index is as good a tilt as anything else out there. I think you've got as
much of a chance at a premium as with SC, SCV, or just plain value. I don't like
dividend stocks better as high dividends can distort pricing and later cause a
capital loss. The index should omit stocks making special tax avoidance dividends
which can cause a temporary spike in prices. But they replace any stock every
year that does not perform either way.

This is from the Morningstar study and recent 10 year observations are still beating
the market keying on high dividend. No need to condemn a tilt based on dividends
IMO. http://myphotos.mypclinuxos.com/images/ ... able_2.png

But read all three studies, shows higher return over many decades, and nothing
else bad stat-wise. Annual taxes on the dividends reinvested will reduce the return.
Last edited by patrick013 on Sun Aug 13, 2017 2:17 pm, edited 1 time in total.
age in bonds, buy-and-hold, 10 year business cycle

Wakefield1
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Re: Dividend Paying stocks

Post by Wakefield1 » Sun Aug 13, 2017 2:14 pm

Does diversification by holding dividend paying stocks in (diversified) mutual funds work as well to diffuse individual stock risk as diversification in holding any kind of stocks in (diversified) mutual funds? I suspect Yes.

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Toons
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Re: Dividend Paying stocks

Post by Toons » Sun Aug 13, 2017 2:29 pm

Mcdonalds.
Why .
Take a look at growth and dividend numbers.
I have personally owned it for 25 years..other than that
Look at the top holdings of Vanguard High Dividend Yield Index fund..take your pick of 400 or so :happy

https://personal.vanguard.com/us/FundsA ... Order=desc
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

abner kravitz
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Re: Dividend Paying stocks

Post by abner kravitz » Sun Aug 13, 2017 2:38 pm

Toons wrote:
Sun Aug 13, 2017 2:29 pm
Mcdonalds.
Why .
Take a look at growth and dividend numbers.
I have personally owned it for 25 years..other than that
Look at the top holdings of Vanguard High Dividend Yield Index fund..take your pick of 400 or so :happy

https://personal.vanguard.com/us/FundsA ... Order=desc
Excellent choice. Besides the growth and dividend, it makes it easier to justify buying that Big Mac. You're helping the bottom line!

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Sun Aug 13, 2017 5:01 pm

indexlover wrote:
Sun Aug 13, 2017 7:54 am
I loved this in your thread:
I feel like the penitent in the confession booth confessing my investing sins. Don't worry, if you read further, I bought some index funds as penance.
I know exactly how you feel :)

viewtopic.php?f=10&t=170697&hilit=DOO#p2573518
:sharebeer
I am a firm believer in the telling of real life stories and the use of humor in getting my points across. This investing stuff can get dry in a hurry. Hopefully folks had a chuckle and learned a thing or two.

It is also a way of showing that I am human too. I tell people not to tinker and then find I can't resist tinkering myself. The key to investing success is to only do the stupid things and not the really, really, really stupid things. Then if you do something stupid, to learn from it and not do it again.

By the way, thanks for reading my thread.
Last edited by nedsaid on Sun Aug 13, 2017 5:02 pm, edited 1 time in total.
A fool and his money are good for business.

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Sun Aug 13, 2017 5:02 pm

Toons wrote:
Sun Aug 13, 2017 2:29 pm
Mcdonalds.
Why .
Take a look at growth and dividend numbers.
I have personally owned it for 25 years..other than that
Look at the top holdings of Vanguard High Dividend Yield Index fund..take your pick of 400 or so :happy

https://personal.vanguard.com/us/FundsA ... Order=desc
I bought McDonald's in a DRIP program in the early 1990's and have been reinvesting the dividends since. It has been a terrific investment.
A fool and his money are good for business.

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sun Aug 13, 2017 6:53 pm

Verizon 4.81%
IBM 4.23%
Chevron 3.95%
ExxonMobil 3.94%
Pfizer 3.85%

ETrade used to have top 5 lists which for dividend stocks
one of them was the top 5 dividend stocks included in the DOW
index.
age in bonds, buy-and-hold, 10 year business cycle

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Sun Aug 13, 2017 10:07 pm

patrick013 wrote:
Sun Aug 13, 2017 6:53 pm
Verizon 4.81%
IBM 4.23%
Chevron 3.95%
ExxonMobil 3.94%
Pfizer 3.85%

ETrade used to have top 5 lists which for dividend stocks
one of them was the top 5 dividend stocks included in the DOW
index.
This takes more analysis than just dividend yield. One thing is valuation analysis, are these priced at reasonable prices? Are the dividends sustainable? One big area to look out is the percentage of earnings paid out as dividends. Will the dividends grow? That is check to see if earnings are growing. Really, dividends aside, are these companies that you want to own for years to come?

I remember that years ago, I owned Occidental Petroleum. The stock had a generous dividend but I found out that the company kept issuing more stock in order to sustain the dividend. In essence, I had a self-liquidating investment. So I sold. I am sure that after the death of Armand Hammer that the dividend policy was changed. But it illustrates that you have to look at more than dividend yield. High dividend yields are sometimes not sustainable.
A fool and his money are good for business.

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Re: Dividend Paying stocks

Post by jbolden1517 » Sun Aug 13, 2017 11:04 pm

harlan247 wrote:
Sat Aug 12, 2017 11:38 am
I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.
I'd say if this is for fun then go deep with yield.
1) The highest yielding stock in the SP500. CTL. Has demand pricing pressures and is expanding regardless. Wall street is not happy and has beaten the stock hard for this. If they are right cuts the dividend and spends years restructuring. If Wall Street is wrong: huge profit as the stock moves to yield around 3% min. Better all that growth pays off earnings explode and it yields around 1.5%. If they can sustain the dividend or only cut mildly you win, If on the other hand they have to restructure they still likely sustain 1/2 the dividend and you've got a nice dividend value stock that isn't going anywhere for a few years.

2) NNA. Shipping company. Fall off in demand again. Has long term supply contracts and is getting the financial house in order.

3) SXCP. One of the best pipeline plays out there. High quality of earnings. Facing the same oversupply issues as the rest of the pipeline stock but an easy triple if the pipeline oversupply eases. In the meanwhile you aren't being underpaid. If they can earn in this environment you are looking at a quality company. I think a potential rocket who is paying you nicely to wait.
Last edited by jbolden1517 on Mon Aug 14, 2017 5:37 am, edited 1 time in total.

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sun Aug 13, 2017 11:52 pm

nedsaid wrote:
Sun Aug 13, 2017 10:07 pm
patrick013 wrote:
Sun Aug 13, 2017 6:53 pm
Verizon 4.81%
IBM 4.23%
Chevron 3.95%
ExxonMobil 3.94%
Pfizer 3.85%

ETrade used to have top 5 lists which for dividend stocks
one of them was the top 5 dividend stocks included in the DOW
index.
This takes more analysis than just dividend yield. One thing is valuation analysis, are these priced at reasonable prices? Are the dividends sustainable? One big area to look out is the percentage of earnings paid out as dividends. Will the dividends grow? That is check to see if earnings are growing. Really, dividends aside, are these companies that you want to own for years to come?
The people at the "dogs of the dow" website consider DOW Index stocks that
pay the highest dividends the Cadillac's of the stock market. ETrade is just trying
to recommend something that pays and is "Dow" safe. The Dow is setting new
highs so they are probably overpriced anyway. Some companies are pouring out
dividends but that could make a company worth 15 PE priced as a 20 PE company
because of the dividend. When the dividend is reduced to a more normal level
and payout ratio the price will likely fall back to the 15 PE level for example.

As individual stocks they're not bad, the Dow people like them not me. Some
MLP's are making big dividend payments but price volatility is terrible. Every
time they get some working capital they spend 99% of it and also debt financing
on new pipes. Put a couple big MLP's in my hypothetical portfolio one of these
days. The little MLP's I tried got pushed out by bigger ones and have losses.
So the indexes still look good for those too, except for the taxes.
age in bonds, buy-and-hold, 10 year business cycle

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patrick013
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Re: Dividend Paying stocks

Post by patrick013 » Sun Aug 13, 2017 11:58 pm

nedsaid wrote:
Sun Aug 13, 2017 10:07 pm
I remember that years ago, I owned Occidental Petroleum.
British Petro and Royal Dutch are both paying out larger dividends.
Same story but I don't know all the details, just noticed that.
age in bonds, buy-and-hold, 10 year business cycle

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Re: Dividend Paying stocks

Post by z3r0c00l » Mon Aug 14, 2017 6:25 am

2nd vote for Verizon.

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Re: Dividend Paying stocks

Post by jbolden1517 » Mon Aug 14, 2017 6:37 am

z3r0c00l wrote:
Mon Aug 14, 2017 6:25 am
2nd vote for Verizon.
FWIW I also hold Verizon myself.

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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Mon Aug 14, 2017 10:54 am

jbolden1517 wrote:
Mon Aug 14, 2017 6:37 am
z3r0c00l wrote:
Mon Aug 14, 2017 6:25 am
2nd vote for Verizon.
FWIW I also hold Verizon myself.
I do not own Verizon but have owned AT&T for many years.
A fool and his money are good for business.

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arcticpineapplecorp.
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Re: Dividend Paying stocks

Post by arcticpineapplecorp. » Mon Aug 14, 2017 11:04 am

z3r0c00l wrote:
Mon Aug 14, 2017 6:25 am
2nd vote for Verizon.
Sorry to rain on your parade. Going back to 11/21/1983 (earliest date for Verizon on morningstar), you'd have grown $10,000 to $251,695.24 (in orange on the graph below). Not bad, but what did the extra diversification of the S&P500 index get for your $10,000 over the same time? $323,609.07 (in blue below). Your choice people. Greater risk adjusted returns or are you feeling lucky? Why own Verizon on it's own when you can get it along with many others? You got a dividend all along with the S&P500 too (sorry, had to throw that one in there).

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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arcticpineapplecorp.
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Re: Dividend Paying stocks

Post by arcticpineapplecorp. » Mon Aug 14, 2017 11:25 am

patrick013 wrote:
Sun Aug 13, 2017 6:53 pm
Verizon 4.81%
IBM 4.23%
Chevron 3.95%
ExxonMobil 3.94%
Pfizer 3.85%

ETrade used to have top 5 lists which for dividend stocks
one of them was the top 5 dividend stocks included in the DOW
index.
My, I'm having a lot of fun here. I've already looked at Verizon since we had two votes for that. Let's take a look at the other 4 mentioned (IBM, Chevron, ExxonMobil and Pfizer, in that order) compared to the S&P500 index (back to 8/31/76, earliest date on morningstar). How would your $10,000 investment have done between 8/31/76 and 8/13/17 in all of these?

$718,707.16 S&P500 (in blue)
$164,843.42 IBM (in orange)
$446,661.75 Chevron (in green)
$681,290.98 ExxonMobil (in yellow)
1,436,382.67 Pfizer (in purple)

Pfizer's clearly the winner here, but you didn't say only invest in pfizer above all others. So by owning all 5 stocks (including Verizon) only 1 out of 5 would have beaten the S&P500 index fund. Not good odds. Why take the extra concentrated risk for no benefit? The choice is yours. And remember, all these companies are in the S&P500 right? So you'd own them all by just investing in the "market" (I recognize the S&P500 is not the "total" market). But it's a lot more diversified than investing in 5 stocks...for their dividends.

And in case you say, well the pfizer profit made up for the other dogs...remember, if you pick 5 stocks, we should assume you'd invest 20% in each, right? Otherwise, you'd have not picked the other 4 dogs and put 100% in pfizer. That being said if you use the numbers provided in these last two posts (with 20% in each of the 5 stocks) vs. 100% in the S&P (using verizon starting as early as we could in 11/21/83) you would have wound up with:

$596,174.80 (all 5 stocks) vs.
$718,717.16 for the S&P500 index

Better overall return. Pfizer didn't help you do better than just getting the return of the S&P500.

Image


source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D
Last edited by arcticpineapplecorp. on Mon Aug 14, 2017 11:36 am, edited 1 time in total.
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nedsaid
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Re: Dividend Paying stocks

Post by nedsaid » Mon Aug 14, 2017 11:34 am

arcticpineapplecorp. wrote:
Mon Aug 14, 2017 11:04 am
Sorry to rain on your parade. Going back to 11/21/1983 (earliest date for Verizon on morningstar), you'd have grown $10,000 to $251,695.24. Not bad, but what did the extra diversification of the S&P500 index get for your $10,000 over the same time? $323,609.07. Your choice people. Greater risk adjusted returns or are you feeling lucky? Why own Verizon on it's own when you can get it along with many others? You got a dividend all along with the S&P500 too (sorry, had to throw that one in there).
This illustrates the principal of wide diversification versus narrow diversification. I like wide diversification over narrow diversification as my risk is spread over many securities. Nowhere have I recommended putting everything into one stock! If you want to try individual stocks, for a starter five stocks across different industries is the bare minimum. Better to have something more like 15-25, again across industry groups and (hopefully) purchased at reasonable prices. 30 would be the max as there is a limit to what an individual doing this part time can follow.

I have done individual stocks over many years. I suspected for years that I about tracked the market but it was too complicated for me to calculate. Finally, I figured how to do this in Quicken by tweaking the reports. What I found was that I beat the market over 1, 3, and 5 year periods but trailed over 10 and 15 years. Didn't trail by a lot but trail I did. Will track this for a while more and at some point may just sell them off and go with a good index. At any rate, they are only 12.5% of my retirement portfolio, so I have limited my risk. The point is, beating the market with individual stocks is difficult.

The example above showed that an investor who invested all of his money in Verizon would have done well but someone who invested in the S&P 500 index did even better with a whole lot less risk.
A fool and his money are good for business.

Grt2bOutdoors
Posts: 16526
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Location: New York

Re: Dividend Paying stocks

Post by Grt2bOutdoors » Mon Aug 14, 2017 11:38 am

jbolden1517 wrote:
Sun Aug 13, 2017 11:04 pm
harlan247 wrote:
Sat Aug 12, 2017 11:38 am
I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.
I'd say if this is for fun then go deep with yield.
1) The highest yielding stock in the SP500. CTL. Has demand pricing pressures and is expanding regardless. Wall street is not happy and has beaten the stock hard for this. If they are right cuts the dividend and spends years restructuring. If Wall Street is wrong: huge profit as the stock moves to yield around 3% min. Better all that growth pays off earnings explode and it yields around 1.5%. If they can sustain the dividend or only cut mildly you win, If on the other hand they have to restructure they still likely sustain 1/2 the dividend and you've got a nice dividend value stock that isn't going anywhere for a few years.
They already cut the dividend once, anyone want to stick around for an encore? Purchasing Quest Communications really hurt this company with too much debt.
2) NNA. Shipping company. Fall off in demand again. Has long term supply contracts and is getting the financial house in order.

3) SXCP. One of the best pipeline plays out there. High quality of earnings. Facing the same oversupply issues as the rest of the pipeline stock but an easy triple if the pipeline oversupply eases. In the meanwhile you aren't being underpaid. If they can earn in this environment you are looking at a quality company. I think a potential rocket who is paying you nicely to wait.
What makes this one special? You could also buy PAA and if you really want to triple your money, go double or triple long Crude etf,
but that would require a sustained move in the price of petroleum, the same petro that would be flowing through those pipes. Similarly, a strong economic picture would lead to great gains in the general stock market, no need to invest in master limited partnerships.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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patrick013
Posts: 1632
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Re: Dividend Paying stocks

Post by patrick013 » Mon Aug 14, 2017 12:45 pm

arcticpineapplecorp. wrote:
Mon Aug 14, 2017 11:25 am

$718,707.16 S&P500 (in blue)
$164,843.42 IBM (in orange)
$446,661.75 Chevron (in green)
$681,290.98 ExxonMobil (in yellow)
1,436,382.67 Pfizer (in purple)

Pfizer's clearly the winner here, but you didn't say only invest in pfizer above all others. So by owning all 5 stocks (including Verizon) only 1 out of 5 would have beaten the S&P500 index fund. Not good odds. Why take the extra concentrated risk for no benefit? The choice is yours. And remember, all these companies are in the S&P500 right? So you'd own them all by just investing in the "market" (I recognize the S&P500 is not the "total" market). But it's a lot more diversified than investing in 5 stocks...for their dividends.
Actually these 5 stocks are from the Dow Jones Industrial Average. The Dow
culture is the Dow culture. What they do dividend-wise is invest in dividend
paying stocks only if they are in the DJIA. If they leave the DJIA they are sold
immediately. That's their entire methodology, and they recommend only 10
stocks per year, the one's that pay the highest yield in dividends.

Dogs of the Dow
10 Highest Dividend Paying Dow Stocks Today
They even have a broker survey and a newsletter to take it or leave it.
I don't own any individual stocks right now so I guess I'm safe.
age in bonds, buy-and-hold, 10 year business cycle

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Toons
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Location: Hills of Tennessee

Re: Dividend Paying stocks

Post by Toons » Mon Aug 14, 2017 2:28 pm

nedsaid wrote:
Sun Aug 13, 2017 5:02 pm
Toons wrote:
Sun Aug 13, 2017 2:29 pm
Mcdonalds.
Why .
Take a look at growth and dividend numbers.
I have personally owned it for 25 years..other than that
Look at the top holdings of Vanguard High Dividend Yield Index fund..take your pick of 400 or so :happy

https://personal.vanguard.com/us/FundsA ... Order=desc
I bought McDonald's in a DRIP program in the early 1990's and have been reinvesting the dividends since. It has been a terrific investment.

Kudos :happy :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

z3r0c00l
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Location: NYC
Contact:

Re: Dividend Paying stocks

Post by z3r0c00l » Mon Aug 14, 2017 6:57 pm

arcticpineapplecorp. wrote:
Mon Aug 14, 2017 11:04 am
z3r0c00l wrote:
Mon Aug 14, 2017 6:25 am
2nd vote for Verizon.
Sorry to rain on your parade
Don't worry about my parade, I don't buy individual stocks or seek dividends in isolation from total return. :mrgreen:

jbolden1517
Posts: 711
Joined: Sun Jul 09, 2017 2:53 pm

Re: Dividend Paying stocks

Post by jbolden1517 » Mon Aug 14, 2017 7:32 pm

Grt2bOutdoors wrote:
Mon Aug 14, 2017 11:38 am
jbolden1517 wrote:
Sun Aug 13, 2017 11:04 pm
harlan247 wrote:
Sat Aug 12, 2017 11:38 am
I want to add one or two dividend paying stocks to my portfolio.
Would appreciate hearing of your favorites and why. Thanks.
I'd say if this is for fun then go deep with yield.

3) SXCP. One of the best pipeline plays out there. High quality of earnings. Facing the same oversupply issues as the rest of the pipeline stock but an easy triple if the pipeline oversupply eases. In the meanwhile you aren't being underpaid. If they can earn in this environment you are looking at a quality company. I think a potential rocket who is paying you nicely to wait.
What makes this one special? You could also buy PAA and if you really want to triple your money, go double or triple long Crude etf,
but that would require a sustained move in the price of petroleum, the same petro that would be flowing through those pipes. Similarly, a strong economic picture would lead to great gains in the general stock market, no need to invest in master limited partnerships.
SXCP is a smaller company. The lower liquidity makes it harder to invest in for institutional investors I think that's why the earnings quality escaped notice. I like PAA but I like SXCP better for quality. I had to pick one that's all. As far as great gains, you are playing for an end to pipeline oversupply. That's not going to correlate with the general economy it might be a minor negative. As for the "general stock market" something like TSM is pretty light on companies that benefit from higher oil usage.

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