Dividend Stocks ( General Discussions )

[Chinaman]

Careful...not all dividend stock are good investment....most retiree got caught in it, hoping to receive regular passive income, ended loss almost 80% of the capital....Frankly, some of my businesman friend hoping their companies got listed in the SGX thereafter jackup the price ,siphon . sold off and retire rich at the expense of investors......unless the SGX come out a rule to make the company directors cook n eat his own food together with the investors. meaning he put his money together with investors 50/50.

I have been loosing my pant in past dividend stocks.....like

FSL
Brown Bacock (rename as Gobal Invest)
Macook Reit ( remane AIM reit)
City spring
HPH (current)

[kanglc]

sph
singpost
starhub
kingsmen
popular
fraser centrepoint
sats

[winston]

A Timeless Rule Followed By Every Wealthy, Sophisticated Investor
By Dan Ferris

On June 15, 1998, Coca-Cola – owner of the world's most powerful brand – traded for $88.94 per share.

For many years, I've been telling my readers to keep the bulk of their equity holdings in companies like Coca-Cola, which has fat profit margins, high returns on capital invested, a great brand name, and a sustainable competitive advantage. I call companies like Coke "World Dominators."

Owning dividend-paying World Dominators and compounding their gains over many years is the surest, easiest, greatest way to get rich in stocks.

But anyone who bought Coke in late 1998 ignored a timeless rule that wealthy, sophisticated investors hold sacred. And they suffered big losses.

What is this rule of the wealthy? How did violating this rule allow some investors to actually lose money on one of the world's greatest companies? And how can you begin using it to make a fortune in stocks?

The rule is that the price you pay is the most important thing when it comes to succeeding as an investor. If you pay a cheap enough price, you can make money in even the worst businesses.

If you pay a dear enough price, you can lose money for long periods of time in even the best businesses.

Back in 1998, Coke's annual earnings amounted to $1.43 per share. So at the all-time high of $88.94, the market was valuing the business at 62 times annual earnings.

That's crazy expensive. Investors were accepting an "earnings yield" of about 1.6%. The "earnings yield" is the amount in earnings the company generates as a percentage of your purchase price. So take $1.43 in earnings, divided by an $88.94 share price, and you get 0.016… or 1.6%.

Think about it this way: It's like buying a $100,000 house that you can rent out for about $1,600 a year, or $133 a month. It would take you 62 years to get your money back out of that investment. And only another fool would pay you $100,000 to take the house off your hands.

When you accept terms like that, you're almost guaranteed to lose money in stocks. And that's exactly what happened to investors who bought Coke at the wrong time.

Less than three months after Coke nearly hit $90 a share, it was down more than 30%. Five years later, it was down 50%. Even 13 years later… counting dividends… those investors haven't made a dime in Coke… which is one of the world's greatest companies.

Nothing much changed about Coke's business during that time. It's still one of the world's most recognizable brands. It still sells soda all over the world. It still has high profit margins.

The losses incurred by folks who bought in 1998 were directly the result of paying a ludicrously high price to become a shareholder.

The same thing happened to investors who bought retail giant Wal-Mart, one of my favorite companies, in 2000. Shares peaked at $70. Today, the shares trade for a little less than $60.

Investors who bought back then lost because they paid the wrong price. The stock was offering a 2% earnings yield. At that rate, it would take you 50 years to get your money back.

I don't know about you, but I don't have that kind of time. I'd much rather see a "payback period" of 12 years or less. That means getting an earnings yield of 8%-10% or more. And fortunately, we're seeing that in some of today's greatest businesses.

Wal-Mart is trading for 12 times earnings, with an 8.3% earnings yield. Coke itself is also selling for about 12 times earnings. If you're buying right now, you're not taking on the crazy deal investors got 12-14 years ago. You're paying the right price to see large long-term gains.

Smart, successful investors know that the price you pay is everything when it comes to making money in stocks, commodities, or any private business.

You can lose money even in the world's greatest businesses if you pay too much. If you take that lesson to heart, and only pay the right price – the cheap price – you're virtually guaranteed to make money over the long term.

Source: Daily Wealth

[winston]

Experts: Dividend Stocks Are Best Bet in Uncertainty By Dan Weil

With interest rates stuck near zero and the stock market giving off continued signs of uncertainty, dividend stocks represent an attractive investment, experts say.

“In an environment where economies around the world are slowing, growth is starting to get scarce,” Thomas Huber, a portfolio manager at T. Rowe Price, tells The New York Times.

“And interest rates are so low, it makes sense to focus on companies that can grow their dividends over time.”

While U.S. corporate profits hit record highs last year, dividends haven’t returned to the peaks they reached before the 2008-09 financial crisis. But they may get closer soon.

Dividend payments for stocks in the Standard & Poor’s 500 Index are expected to rise by 11 percent on average this year, according to Howard Silverblatt, a senior index analyst at S&P. “The dividend story is good and should continue to be good,” he tells The Times.

Companies are paying out less than 30 percent of their earnings as dividends, compared to a historical average of around 50 percent for S&P 500 companies, Silverblatt says.

And corporations have record cash holdings to disperse to shareholders.

Investors should focus on stocks with dividends between 3 and 6 percent, Josh Peters, director of equity income strategy for Morningstar, tells Bankrate.com.

Yields below that range don’t adequately compensate you for the risk of stocks, and yields above it would be in danger of getting cut.

http://www.moneynews.com/StreetTalk/Div ... /id/422975

[winston]

My Dividend Retirement Plan

I am a big proponent of value investing, which is why I would only consider myself financially independent whenever the dividend income stream generated by my portfolio exceeds 1.5 times my annual expenses.

In order to get there, there are several simple, but crucial principles I need to follow.


The first principle in building wealth through dividend paying stocks is to spend less than what you earn.

In addition, regular saving helps me to consistently add to my portfolio. This regular dollar cost averaging over time into positions that are attractively priced, creates another layer of safety.


The second principle is to invest your money very conservatively. I invest my money as if I would lose my job and I would have to depend on my portfolio income for my sole purpose of survival. As a result I do not chase hot stocks or try to outsmart the market through frequent trading or market timing.


The third principle is somewhat similar to the second. It is all about designing an investment strategy and sticking to it for most of the part. My strategy entails:

1) Stocks that have a 10 year record of consistent dividend raises
2) P/E ratios of less than 20
3) Dividend payout ratios of less than 60%. For MLPs, REITs and Utilities I evaluate each opportunity on an individual basis
4) Dividend yield exceeding 2.50%, although I do change this requirement depending on the dividend yield on the S&P 500
5) Quality characteristics such as wide moat, strong competitive advantages, strong brand names, rising earnings, decreasing number of shares etc

While I mostly stick to my strategy, I sometimes do deviate from it. .


The fourth principle involved selling underperforming shares. While I take a great amount of time analyzing companies and making sure they are priced right before I purchase them, I realize that things could change and that I should not be married to a stock that does not deliver results.

In a previous article I mentioned that typically sell dividend stocks only after three events have occurred. One of these events includes dividend cuts.


The fifth principle is all about diversification. The reason behind diversification is to ensure that the income stream is not severely affected when one or two of the stocks I own cut distributions.

A dividend cut in a portfolio of less than 10 stocks will severely affect the income stream. A dividend cut in a portfolio of over 30 stocks will not affect the dividend income. In an equally weighted portfolio, even if the dividend is completely eliminated in one or two components, the total income can still grow if the other components grow distributions and if the sold stocks are replaced strategically.


The sixth principle of my wealth accumulation strategy is strategically reinvesting dividends. .


In summary, by saving money, investing them in blue chip dividend growth stocks and reinvesting dividends and new capital, I plan to generate enough dividends to make me financially independent.


http://www.dividendgrowthinvestor.com/2 ... -plan.html

[winston]

Dividends are not as volatile as you might think

One concern is that dividends are very volatile given that Asia-ex has a volatile earnings stream. With most companies more focused on the pay-out ratio than the payment of a dollar amount, dividends too must be volatile.

The good news here is that both the pay-out and dollar amount are among the least volatile of corporate metrics and this has been the case over both the past 10 and 20 years.

Earnings per share have been the most volatile, followed by cash flows. Whilst most Asian companies like to talk about the pay-out ratio rather than fixed dollar amounts, there is clearly greater flexibility in the pay-out ratio than most investors realize.

Source: Citi

[winston]

THE MARKET IS STARTING TO "CHASE" DIVIDENDS

Before it's too late, get your hands on some cheap, blue-chip dividend payers. As we mentioned on Tuesday, they are becoming the "fashionable" thing to buy on Wall Street.

Over the past few years, we've stressed the importance of dividends and high-quality stocks dozens of times in DailyWealth. We practically went to your house and made you buy them.

In a world full of risk and fraud, getting paid steady and growing cash dividends is one of the market's best strategies. You can read a few of our best pieces on the idea here, here, and here. And you can read how to massively increase the income streams you get with them here.

On Tuesday, we ran a chart of Wal-Mart to show you how these stocks are getting popular with money managers. The "King of Retail" has climbed 17% in four months… which is a stupendous short-term gain for a large company. It's a move that requires a lot of buying power.

Today's chart shows that the "big money" isn't just buying Wal-Mart. Intel, which is another top dividend payer we've written about many times, is also winning the market's popularity contest. This reliable dividend payer is up 37% since August… which demonstrates how the investors are starting to "chase" cash dividends.


www.dailywealth.com

[winston]

Why the Income You Collect From Stocks Could Soar Very Soon By Brett Eversole
Monday, January 30, 2012


It sounds crazy, but the income you collect in the stock market could soar by at least 50% in the coming years…

And this income boom could cause share prices to boom as well.

Let me explain…

Last year, S&P 500 companies paid $256 billion in dividends. That's a huge amount of money. But it's nothing compared to what the companies COULD pay. The payout could increase by 25%… 50%… or even 62% in the coming years.

Right now, the S&P 500 only pays 29% of its earnings in dividends. That's near an all-time low. Its long-term average payout is 47%. That means most S&P 500 companies could massively increase their dividends.

Why are we seeing this record-low "payout ratio"?

Many corporate managers are scared of another 2008… when the economy cratered and it was hard to borrow money. These corporate managers are worried about things like U.S. government debt and the European financial crisis.

Keeping lots of cash on hand – instead of paying it out to shareholders – provides a "buffer" against trouble.

But if the world simply "doesn't end," the economy will slowly get better… and big companies like Coca-Cola, Cisco, Disney, and ExxonMobil will keep churning out steady cash flows… which will allow them to pay more dividends.

For example, right now, ExxonMobil pays 23% of its earnings in dividends. Since 1973, its payout percentage has only been this low once before. Historically, Exxon has paid an average of 50% of earnings in dividends.

If the company increased its payout percentage to its historical average (50%), and the stock price stayed the same, Exxon would be yielding an impressive 4.9%. Of course, if Exxon's dividend started rising that fast, investors would "chase" the yield and push shares higher.

Is Exxon going to increase its dividend? I don't know. It certainly could. The thing is… Exxon isn't the only company with historically low payouts.

Take biotech giant Amgen… By paying out 47% of its earnings, Amgen would increase its dividend yield to 4.1%. Disney's current yield is 1.5%. If it paid out 47% of earnings, that yield would more than double to 3.4%.

A couple big tech companies in the S&P 500, like Google and Apple, pay no dividends at all right now. Cisco and Oracle have small yields (around 1%). All of these companies have multibillion-dollar cash piles (nearly $100 billion in Apple's case). Sure, they need some of that money to invest in future growth, but they could start returning a lot of that money to shareholders.

As my Editor in Chief, Brian Hunt, recently pointed out… investors are growing more and more interested in collecting dividends from large, super-safe companies, like Wal-Mart and Intel. Both Wal-Mart and Intel are relentless dividend-payers… And they have surged in the past four months.

Don't think other corporations haven't noticed this budding trend. They want their share prices to rise as well… so they will likely increase their payouts from historic lows. Investors collecting $1 per share in dividends from their favorite blue chip today could be collecting $1.25 or $1.50 per share in just a year or two. With interest rates so low, investors will flock toward these stocks.

In sum, many S&P 500 companies are flush with cash. Standard & Poor's (S&P) recently reported that cash levels as a percentage of market capitalization are the highest they've been since 1988.

Interest rates are at record lows. And income-seeking investors could pile into stocks should dividends rise from their historically low levels.

This is a big bullish case to own stocks in general… and dividend stocks in particular.


Source: Daily Wealth

[Chinaman]

trying to get 6% yield but end up with 12% capital loss or more

Passive Income: Only 2 investments that can achieve your retirement need
1. Dividend from stock
2. Rental income from ppty

Since 2007, my rental income had been stabilized and I begin to be more active in stocks why? becos expert said dun put all your eggs in 1 basket.
90% of my asset in ppty, so i started to divert into stocks & preference share with the intention for collecting dividend as passive income...but didn't make it instead cut loss and run out at 20% losses (aro 30k gone in the thin air )

Also, becos of passive income, i bot 50k of minbond but very unfortunate its vaporized in the air too.

anyway, paid tution fee 'Lesson Learnt" One should not chase for risky high-dividend yield, because like everything else, there is a price tag for what it is...fall down nevermind climb up , review your portfolio, relook & rebalance and, then walk again...

Now thinking of which blue chips can keep for over 10 yrs without looking?
My favourite: Singpost, SPH, Starhub, SIA Engrg, SMRT, Singtel, Semb Marine,ST Engrg, SATS, SBS..hehe all 's' easy to monitor, of cos there are others....any recommendation?

My most steady and stable dividend stock is First Reit...bot in 2007 @0.70 cts..today still aro this price 0.77, average yield aro 7%...not bad

[kennynah]

how about Singapore Airlines?