Bookmark and Share
Showing posts with label Investing. Show all posts
Showing posts with label Investing. Show all posts

These 7 Dividend Cash Cows Produce Money Like Milk (Part I)

Investing is great. You can spend money on stocks and if your bet goes wild you will make a lot of money. That's a great dream for all of us and I can tell you that it's possible to become an investment Pro.

I'm a guy who looks steadily at stocks and try to find attractive investment stories and cheap stocks in order to make a good return.

I'm not short term focused; plan to hold most of my stocks over years and decades. Due to my long investment horizon, I need good companies that grow over time their business, pay me good dividends, and grow dividends as well.

But the most important question is that the corporate can grow without taking new investors on board. Those actions will grow outstanding shares in general and bring pressure on earnings per share growth.

I look for companies have generated high free cash flows, companies with a business model that don't need much money to keep their operational business alive.

I've tried to find some new ideas with an old screener who has a quick option; it’s called the reinvestment rate. I don't know how they calculate this ratio but when I sort the list of large with high margins by this ratio, companies with low investment spending on their operational cash flow come first.

Big Money Roll In Your Pocket

I talk about companies with a high scalable business, stocks with the lowest need of capital expenditures. First you might think about Facebook or all the great tobacco companies. For sure those shares generate big free cash flows.

But there are much more companies, I talk about technology stocks and money platforms. The key is here the platform business. Each new customer doesn't cause new costs and bring free cash into the corporate. That's a great idea of making money.

The only item to care about is market entry barriers. Can competitors easily enter and push down margins? If yes, keep your fingers away of buy only at low multiples.

Below are seven detailed stocks. I will follow up with 8 additional stocks. That's only a selection; there are much more companies available. Some of them pay no dividends other a low one but dividend is not the key.

Look at Part II here: These 8 Dividend Stocks Bubbling Cash Like Lava Gold Mines (Part II)

Most of the presented results come from the tech and financial space.


7 Dividend Stocks with strong free cashflows are...



Best Warren Buffett Documentary Ever!

Hello investment guys, hope you have a great day. I've stumbled and found a great documentary about the big long-term investor Warren E. Buffett. The film is around 45 minutes long but gives a great overview of his life. Very informative.

I hope you also get inspired and it helps you to perform your own investment style.

Investing is about passion and not to make money. I and my friends and community also very frugal persons who loves to invest. 

Honesty is also important. Don't cheat and have a good taste of humor.

Sound check...Testing....one million, two million, three million..Great :-)

 

Warren Buffett Buys Surprisingly These 8 Dividend Stocks (WMT, GM, IBM, VZ ...)

Warren Buffett is one of the most trusted investors in the world. Recently, he came out with his 13F Filling which informs about the recent investment activity.

I studied Warren's latest buys and sells. My thoughts are clear: He invest into calbe and telecom stocks. Below is a small overview of his latest purchases. In addition, I've implemented a detailed view on his latest dividend buys for you.

In total, Warren bought 13 stocks of which eight pay dividends. The highest yielding company was the telcom company Verizon followed by the car maker General Motors.

His total portfolio value hit the USD 107 billion benchmark and around 65 percent of his assets are invested into four companies (Wells Fargo, Coca Cola, American Express and IBM as well).

45 percent of his assets have a relationship to the financial sector. Insurance stocks have made him rich in the past but I think those shares were only a strong cash source for further investments. 

Buffett is a great investors with a fantastic sense for good investments but everybody should develop his own investment style.

Find The Good Stocks That Pay And Grow Money For You Over Decades!

Every trade causes costs. I'm talking about taxes and transaction costs. You can adjust your portfolio risk with your trades but if you are right or wrong, it's in my view often hard to say. I have sold stocks many times and often they doubled or tenfold after I have decided to sell them; a bad choice from me. Recently, I wanted to sell 25 percent of my Mondelez stake because they got so big after the spin-off from Kraft Foods. The order was not executed because my limit was too high on the trading day, at USD 34. But because of my 70 percent gain, I needed to pay high taxes on my trade, a number that causes a potential 10 percent loss for the whole stake.

I believe that it makes more sense to buy high-quality stocks at fair prices and keep them for 20 years or more. Over this period of time, the stock should have paid your investment amount nearly completely back. No dream, just reality. Some stocks can pay you in 10 years, others need 50 years. The point is to find the good stocks that pay you.

Below are six stocks with over 10 years of consecutive dividend growth and solid debt and growth predictions.

6 Dividend Stocks Warren Buffett Added Recently To His $100 Billion Portfolio

Do you like Dividends? I do and you should love them too. 

Dividends are paybacks to shareholders, money that you can use for reinvestments or your daily spendigs. 

But the dividend is not everything you need to look on when you think about investments. 

It doesn’t make sense to buy a high yielding stock with high debt and no growth perspectives. Inflation will destroy your investment in the end.

One very successful investor who has been focused on dividend growth investing is Warren Buffett. I don't recommend covering his investments but Warren has a great idea base for us normal investors from that you can also benefit.

His latest SEC-Filling shows that he has assets which are worth over $100 billion. Around 43 percent of his money is currently invested within the financial sector.

Below is a small overview about his latest dividend buys. Seven of his ten most recent purchases pay a dividend. The best yielding pick was General Electric with a 3.42 yield.

The biggest impact had the Goldman Sachs (GS) transactions with a 2.14 percent change result to his portfolio. 

Nearly of Warren's latest buys are cheaply priced measured by a forward P/E of less than 15.

4 stocks still dominate his asset allocation: Wells Fargo (WFC), Coca Cola (KO), American Express (AXP) and finally IBM (IBM). Each of them has a 10+ percent share in his portfolio. It's a clear signal to buy only those stocks that underlying business you understand.

Warren Buffett's latest dividend purchases are...

Warren Buffett’s Latest Stock Picks And His Biggest Portfolio Holdings

Warren Buffett’s latest dividend stock picks and his big portfolio picture originally published at long-term-investments.blogspot.com

Everybody loves Warren Buffett and when he releases his portfolio statements, all investors jump on this paper and try to figure out what he is doing.

In this article I will summarize the latest stock buys and sells of Warren Buffett's Bershire Hathaway and his latest portfolio overview.

Within the recent quarter, Warren made only 13 trades of which nine come from the long side. He bought two new companies and increased seven additional stock holdings in his portfolio. The new stocks were Dish Network and Suncor Energy.

The only stake he sold completely was the newspaper publisher Gannett.  Kraft Foods, Moody’s and Mondelez were reduced within the recent quarter.


Nothing changed much in Warren's Portfolio


In total, Warren did not change much. The stock with the highest influence to his portfolio pocket change was the bank U.S. Bancorp. The Oracle of Omaha increased the position by 27.37 percent which resulted in an portfolio impact of 0.69 percent.

You can find a full list of his latest transactions below. Ten of his 13 latest stock moves pay dividends and the yields are between 0.33 and 3.84.


Warren Buffett concentrates money on big dividend companies


Back to Warren’s biggest portfolio positions. Warren concentrates most of his wealth on four assets: Wells Fargo, Coca Cola, IBM and American Express. These fantastic four represent around 67 percent of his full portfolio value. On the attached list, you can see more details about his 20 biggest stock positions. Financial Services, Consumer defensive stocks and technology are the biggest sector in which Warren Buffett loves to invest.

The Neatest Little Guide to Stock Market Investing


The essential stock market guide, now updated with even more timely and necessary information

Now in its fifth edition, The Neatest Little Guide to Stock Market Investing has established itself as a clear, concise, and highly effective approach to stocks and investment strategy. Rooted in the principles that made it invaluable from the start, this completely revised and updated edition of The Neatest Little Guide to Stock Market Investing shares a wealth of information, including:


• What has changed and what remains timeless as the economy recovers from the subprime crash 


• All-new insights from deep historical research showing which measurements best identify winning stocks


• A rock-solid value averaging plan that grows 3 percent per quarter, regardless of the economic climate


• An exclusive conversation with legendary Legg Mason portfolio manager Bill Miller, revealing what he learned from the crash and recovery


• Thoroughly updated resources emphasizing online tools, the latest stock screeners, and analytical sites that best navigated recent trends 

Accessible and intelligent, The Neatest Little Guide to Stock Market Investing is what every investor needs to keep pace in the current market.


Read more here: The Neatest Little Guide to Stock Market Investing: 2013 Edition

David Einhorn: Fooling Some of the People All of the Time

Could 2008's credit crisis have been minimized or even avoided? In 2002, David Einhorn-one of the country's top investors-was asked at a charity investment conference to share his best investment advice. Short sell Allied Capital. At the time, Allied was a leader in the private financing industry. Einhorn claimed Allied was using questionable accounting practices to prop itself up. Sound familiar? At the time of the original version of Fooling Some of the People All of the Time: A Long Short Story the outcome of his advice was unknown. Now, the story is complete and we know Einhorn was right. In 2008, Einhorn advised the same conference to short sell Lehman Brothers. And had the market been more open to his warnings, yes, the market meltdown might have been avoided, or at least minimized.
  • Details the gripping battle between Allied Capital and Einhorn's Greenlight Capital
  • Illuminates how questionable company practices are maintained and, at times, even protected by Wall Street
  • Describes the failings of investment banks, analysts, journalists, and government regulators
  • Describes how many parts of the Allied Capital story were replayed in the debate over Lehman Brothers
Fooling Some of the People All of the Time is an important call for effective government regulation, free speech, and fair play.

Read more here: Fooling Some of the People All of the Time, A Long Short (and Now Complete) Story, Updated with New Epilogue

Reader Question: Why Do My High-Yield Stocks Produce Losses And How To Turn Them Into Capital Gains?


I’ve received an e-mail from one of my readers. Here is his mail:

“Dear Tom,

Want to let you know that I thoroughly enjoy and appreciate your dividend newsletter for starters I wish to apologize on behalf of correspondents who are blatantly rude and disrespectful to you. If I have a disagreement or question for you I certainly would be polite....common sense.

I am retired and have money to invest and am concentrating on high dividend paying stocks.  But so far I am making good money on dividends but am currently getting more capital losses than capital gains.  I have made costly mistakes but am benefitting from them.

If you could suggest any strategies plus make suggestions I am ready, willing and able to digest same.
Very Respectfully”

Well, a one way strategy to make money without any losses does not exist. I personally made losses but they were not significant in relation to my current unrealized and realized capital gains.

The first question is in my view how much risk can you shoulder to get a higher return. I believe that investing should improve your live quality and should not end in hard work. Stocks and everything surround should bring you fun and cause in a better life. If you are retired, you have not as much time to wait for returns as a younger investor.

If you say that you make losses, I would be curious to know what kind of stocks do you own and how long do you have them? This is a fact that I hear from several investors. They receive high dividends but make losses on their assets. I discovered that it has reasons when companies are low valuated and high yielding. The truth is that all others know the problems of the company and core investors sell their stocks before everything is public.

I don’t like higher yielding stocks like PBI despite the fact that they have realized a great return since the beginning of this year. The market knows everything, much more as we all because he is an expression of all contributors and stakeholders of the company.

My strategy is to buy stocks and hold them, receiving the dividend and see how my yield on cost rises in average, year over year. I don’t follow the company’s happenings in detail. It’s a passive income with passive work but highly scalable.

Back to your problem. I prefer lower yielding stocks with a higher and more consistent growth. It’s even better if the company has low debt as well as a good management team.

As of now, there are still opportunities with a 3%+ yield of which you can expect that the income will grow with a rate of 5-7% per year.

When I buy stocks I always look at the long-term history of a stock. If they doubled sales every 10 years and they have revenues over $10 billion, I am interested to discover more of the stock if earnings grew faster than sales. Also important for me is the stability and volatility of the growth. A highly cyclic company is not the right stock for me. Finally debt and cash flows matter. The company must create strong cash and should be able to give shareholder value back in some way.

If you start buying stocks and you plan to hold them over a decade or more, your first years will be the hardest if you are in an overvalued stock market. I have no idea if the market today is overvalued. It’s primarily a question of the future growth perspectives from the companies. If a recession comes, a blast of the Chinese housing bubble or even a break-down of the Euro, the market is definitely overvalued.

My approach is that the economy will recover and improve over a long period. It’s like an economic balance. The only question is “how long does it take” to get balanced. Since 2008, the market needed five years to get back to the historic levels. It could also possible that you see decades of slow growth or no growth – Look at Japan. If you are at the age of 65 or older you must consider this for your asset allocation.

The best category to place money is in my view dividend growth from companies with international sales and future growth potential. Companies like Nestlé, Procter & Gamble or Nike have a big brand portfolio which produces strong cash flows and their client basis is still rising. Coca-Cola is the dominating player in the soft-drink business but they deliver only 1% of the daily beverage consumption of a person.

A past performance does not mean that the business model works for the future but in my view, companies like Coca Cola or McDonalds have a big cash flow and the best human skills do develop markets better than their smaller rivals. They handle recessions more effective and gain market share in every depression.

I reduce the residual risk by putting not more money into a single stock of more than 1% for a non-core holding. If I am wrong with my company, I could only lose 0.5% over years if the stock is down 50%. That’s not much when I receive yearly 3% in dividends from my portfolio holdings.

Dividend Investing - The Truth About Dividends and Long Term Income Investing


Have you ever wanted to make a passive income from the stocks you purchase? When many people think of dividend investing they think of retirees trying to preserve their nest egg. 

What if I told you dividends aren't just for retirees, they are for everyone and anyone that is looking for long term, steady wealth from the stock market. When you take into account a stocks total return from dividends and appreciation it is quite easy to get a respectable total return that over a period of years can make you financially secure. With the added benefit of dividend growth you can ensure your income grows to help keep pace with inflation.

Dividend Investing - The Truth About Dividend and Long Term Income Investing covers the following topics.

1) What Is Dividend Investing
2) Who Is Dividend Investing Good For
3) What You Need To Get Started
4) What Types Of Companies Pay Dividends
5) Building Your Prospect List
6) Building Your Watch List
7) Building Your Dividend Stock Portfolio
8) What To Do After You Buy Your Dividend Stocks
9) When To Sell 
10) Mindset, Discipline and Confidence When It Comes To Dividend Investing
11) List of Dividend Aristocrats
12) Company Profiles (updated periodically)


You can read the first chapter here: Dividend Investing - The Truth About Dividends and Long Term Income Investing