Dividend Stocks ( General Discussions )

[winston]

High dividend yield stocks such as LINK REIT (823), Hui Xian REIT (87001) and Fortune REIT (778) are worth accumulating on any weakness.

Source: Dr. Check, The Standard HK

[winston]

When can you retire on dividends?

The goal of every dividend investor is to one day accumulate a portfolio of income producing stocks, which would throw off a large amount of dividends every month. The goal of living off dividends is achievable, but it takes capital, time, skill or luck in order to get to the magic point.

The magic point is where the dividend income exceeds the expenses of the dividend investor.

http://www.dividendgrowthinvestor.com/2 ... dends.html

[winston]

Beat Any Bear Market with Dividend Stocks by Marc Lichtenfeld

It is incredibly difficult to time the stock market. Even those “experts” who made great calls right before the markets tanked haven’t been able to duplicate their previous success.

When was the last time you heard from any of the prophets who correctly called the ’87 crash?

Trying to time the market, particularly with your long-term portfolio is a fool’s game. Instead, here is a time tested (yet underappreciated) method for riding out volatile markets.


Perpetual Dividend Raisers

Look for stocks that are what I call “Perpetual Dividend Raisers”. These are stocks that have a track record of raising the dividend every year.

For most stocks, that will keep ahead of inflation and the high yield will provide a buffer in a market downturn.


http://www.investmentu.com/2012/March/b ... tocks.html

[winston]

Don't Believe Every Energy Dividend Story You Hear by Marin Katusa

The outlook from here is not great. When markets turn bearish, investment strategies often turn toward income stocks, and rightly so: if market malaise is expected to keep share prices in check, dividends become a very good place to look for profits.

But whenever a particular characteristic – such as a good dividend yield – becomes desirable, it also becomes dangerous. The sad truth is that scammers and profiteers jump aboard the bandwagon and start making offers that seem too good to refuse.

It was just such an offer that reminded me of this danger. In the question-and-answer period following my talk in Calgary at the Cambridge House Resource Conference, an audience member asked my opinion of a new, private company that was offering a 14.7% monthly dividend yield.

Yes, you read that right: a 14.7% monthly yield, from a new, private, natural gas company.

I had met with this company the previous day and in that meeting the slick individuals who promised such glorious dividends got stumped by some pretty simple questions.

When asked what the company's twelve-month payout ratio was, the individual responded with, "Our working interest varies between 25% and 70%."

Perhaps he didn't hear my question, I thought, so I tried again. This time he stated that they pay a 14.7% dividend monthly… again, not answering the question.

An interaction like this should set your spider-senses tingling. A few questions later it was obvious that they had no clue what they were talking about or trying to sell.

So, back to the very pleasant older man who asked the question at the end of my talk. My answer – which applies to almost everything in life – was this: if it sounds too good to be true, it probably is.

http://www.caseyresearch.com/articles/d ... 443ED0412A

[winston]

When Is It Time to Sell a Dividend Stock? By Jeff Reeves

Dividend stocks have lots of appealing factors, and it’s easy to find reasons to buy.

Some stocks have a great dividend yield.

Others have a decades-long history of raising dividends once a year. Then there are picks with a modest dividend but great upside potential for shares.

If you’re looking for a reason to buy dividend stocks, there are plenty. But a trickier scenario is knowing when to get out.

So when do you sell a dividend stock?

http://www.investorplace.com/2012/04/wh ... en=3879240

[winston]

The Secret To Becoming a Great Dividend-Earner

When I sit down to select dividend-paying stocks for my readers, my personal portfolio, and my mother’s portfolio, I don’t just consider the “usual” numbers…

Of course, I look at important things like brand quality, profit margins, and sales growth…

But I also use a little-known, very powerful concept called the “payout ratio” to guide my decisions.

The payout ratio is the percentage of a company’s earnings used to pay its dividend. My rough rule of thumb is to stick with companies with a payout ratio of less than 60%.

You see, a company with a high payout ratio – one that pays out around 75% of its earnings as dividends – may struggle to maintain its dividend if it hits a rough patch or if the economy weakens.

Utility companies tend to have higher payout ratios. Often, it’s because they are mature companies with less room for growth. But even in this industry, I stay away from super-high payout ratios. They don’t provide a “cushion” for tough times.

However, 60% is a great “middle-of-the-road” number for investors interested in a safe payout AND some future growth.

You see, if a company has a payout ratio of less than 60%, it’s plowing 40% or more of the earnings back into the business, investing in its own growth. (A 2008 study showed 60% of the companies with a payout ratio of 60% or under raised their dividends down the road.)

To compute a company’s payout ratio, I divide the annual dividends per share by the annual earnings per share. I find both numbers in the company’s annual report. (For an even faster check, Yahoo Finance lists the payout ratio on its “key statistics” page.)

http://yolotraderalerts.com/?p=4014&utm ... book%20IPO

[winston]

Warning Signs of an Imminent Dividend Cut

One important lesson we learned from the 2008-2009 financial crisis was that it didn't matter how long a company had increased its dividend, tough economic times could push it to cut its dividend.

In most cases the companies' investors were not surprised because they saw the early warning signs that indicated a dividend cut was imminent.

Here are three signs that a company is heading toward a dividend cut:


I. Change In Business Conditions

An abrupt or permanent shift in a company's business model as a result of business conditions could lead to a dividend cut.

During the financial crisis, virtually all businesses experienced an adverse change in business conditions. However, the pertinent question is to what degree?


II. Dividend Yield Above Historic and Industry Norms

A dividend yield that is higher than average and/or higher than others in the industry are indications, not all is well with the company.

The market is adjusting to compensate for the higher risk of holding the company. When dividend yields start creeping up, it is time to start evaluating if the company can continue to pay its dividend.


III. Diminishing Cash Available to Pay Dividends

Ultimately, the ability of a company to pay its dividend is determined by its cash position - both cash on its balance sheet and its ability to generate cash flow. All the companies above had one thing in common - a deterioration of cash flow available for paying dividends.


Conclusion

The above three items will help you determine which companies are at risk of cutting their dividends.

Cash is king, so pay special attention to free cash flows and debt levels.

Buy and hold is not buy and forget - never take your eyes off your investments.


http://www.dividend-growth-stocks.com/2 ... d-cut.html

[winston]

Every "expert" on TV is now touting dividend stocks because:
1. we would probably be muddling thru for a few quarters more and
2. the European Crisis would not be sorted out anytime soon

[winston]

Look for more than dividend yields

In our monthly series featuring fund managers and leading market experts, we ask Ng Soo Nam, chief investment officer at Nikko Asset Management Asia, about his investment philosophy and strategies.

By Jonathan Kwok

High-yield stocks have been in vogue since the 2008 financial crisis as investors seek steady income streams and reprieve from the volatile markets.

But while income streams are important, instead of simply paying attention to the levels of dividend payouts, Nikko Asset Management Asia's chief investment officer Ng Soo Nam, 47, believes that investors should also look at other factors such as reliable management, to ensure the payouts can be sustained.

"A high dividend yield by itself is a necessary but insufficient condition within dividend yield investing, and some other criteria are needed to complete the assurance of yield sustainability," he says.

Investors who placed their money with Mr Ng's team have not have done too badly.

Launched in 1999, Nikko's Singapore Dividend Fund has grown by an average of 10.96 per cent a year for the past three years, after deducting fees and charges and assuming that dividends were reinvested.

By this same measure, the Straits Times Index in this timeframe grew by only 7.25 per cent per year.

Stocks in this dividend fund include CapitaCommercial Trust, CapitaMalls Asia, Frasers Centrepoint Trust, DBS Group Holdings and SingTel.

The fund aims to pay dividends of 5 per cent to 7 per cent every year, spread out over four quarterly payments.

The recipient of a government scholarship, Mr Ng left the civil service in 1995 to join Schroders. He spent about 10 years there and managed the Schroder Singapore Trust, which became one of the best-performing Singapore equity funds.

The Schroder Singapore Trust outperformed the benchmark index in six of the seven years that Mr Ng managed it.

After Schroders, Mr Ng spent 21/2 years with Mirae Asset Global Investment Management (Asia) before joining Nikko in 2007.

Last year, Nikko acquired DBS Asset Management.

Nikko also has other funds, such as the Nikko AM Asia Pacific ex-Japan Fund for stocks in the region.


Q: What is your investment philosophy?

We are fundamental-driven investors. What this means is that we invest to take ownership of the profit streams of companies.

We examine closely how companies compete in order to figure out whether their profits can be sustained, or whether there is a likelihood that they may grow faster than expected.


Q: How do you decide which companies to invest in?

We have 11 analysts and fund managers who go through more than 1,000 stocks in the region, of which 500 fall into our research coverage list. We narrow these down to about 180 stocks which we may consider using for our various funds.

We are looking at companies that are relevant to the Asian growth story.

We want to be comfortable with the quality of their management, the strength of their balance sheet and the strength of their competitive advantage.

We do this by scrutinising the company's past financial and operating data, and examining the management's previous corporate governance and execution track records.

We also meet the management and do our own independent assessment of the industries which these companies are operating in.

We should be able to confidently estimate the company's three-year outlook and earnings stream at least.

So we will have a final list of about 180 stocks that we keep a tight watch on.

It doesn't mean we buy these companies straight away. We will wait for the market to deliver a reasonable price for us to buy.

Among our funds, at any time, our regional portfolio has about 50 to 60 stocks, while the pure Singapore fund has about 30 to 40 stocks.


Q: How do you decide if the valuations are good enough to enter the market?

We use matrices, a combination of price to earnings, net asset values, and price to free cash flow.

For property companies, we tend to focus on the net asset values, for tech stocks, we tend to emphasise free cash flows, while for banks, we use a combination of price to earnings and book value.

For example, when Capita-Malls Asia first came to IPO (in 2009), we didn't buy it because the price was too high.

But last year, when a big institutional investor was selling down, we started buying when the price fell and consistently added more exposure when the stock fell even further in the midst of the market volatility.

As much as we like Capita-Malls Asia's long-term growth story and the quality of its execution, it takes a lot of patience and discipline to wait for the right price to build a portfolio exposure.

We'll also sell our holdings if the stock goes up substantially, and buy when it falls back again. It's part of our risk control.

Source: The Straits Times
http://www.straitstimes.com

[winston]

When to Sell Your Dividend Stocks

It can be hard to know whether to hang onto your high-yielders

By Jeff Reeves

http://www.investorplace.com/2012/08/wh ... en=3879240