Monday, May 30, 2011

Dividend Machine Leggett & Platt May 30, 2011

                As an income investor you want to sleep well at night.  Income investors should consider owning the company that invented the steel coil bedspring.  Leggett and Platt, symbol LEG, invented the steel coil bedspring and has evolved into a creator and manufacturer of specialty metal products. LEG has operations in 20 different countries. 

LEG will pay a dividend of $.27 on July 15, 2011 provided you own it by June, 13.2011.   At the closing price of $25.59 on Friday, LEG’s dividend yield is 4.22%.

Earnings per share are $1.16 with a recent income growth rate of greater than 50 percent.  Debt to equity (D/E) ratio for LEG is a very respectable. 57.  Review this company and see if it fits into the income-producing portion of your portfolio.  LEG is a reliable dividend machine; it provides diversification; and, you will sleep at night.

Very Truly Yours,

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Sunday, May 29, 2011

Dividend Machine for May 23, 2011 Revised to HGIC

Dear Income Investors:  Well, this is embarassing; last week I profiled a company BCE which I had already included in our dividend machines list. To correct this error I offer a revised pick.  Harleysville Group, symbol HGIC is my new dividend machine for May 23, 2011.

Thursday, May 19, 2011

Caterpillar, symbol CAT adding income

          Income investors, CAT provides another example of how to use covered calls for additional income.

Tuesday, May 17, 2011

Dividend Machine criteria; a high hurdle! Look at ETN

                Finding a dividend machine is so difficult; the hurdle is high.

BOEING, Symbol BA, 17.72% gain in 9 months

                Income investors have to wait for good things to happen.  We have to trust our methodology.  We know how to create income: dividends, covered calls & taking profit.

New York Bank Corp, symbol NYB

          Some time ago I profile a regional bank with a good history of paying big dividends.  I am even on the trade and received the 6% income while I held it and now I am stopping it at $16.30.  Probably will get hit as the payout has increased to 90 percent of the earnings.  If regulations that apply to big banks are extended to regional banks, NYB may have to reduce the payout as I doubt they can increase earnings enough to meet the regulatory requirement of only a 30 percent payout.

Monday, May 16, 2011

Dividend Machine Conoco Philips, symbol COP

                Income investors must always have the discipline to follow our rules as we invest for income.  I know that every expert is suggesting that oil is a weak play but we need to look for dividend machines.  Remember, a dividend machine is a company that pays us at least 3 percent.  Although recent cost of living increases suggest that some day soon we will be able to buy a 3 percent C.D., today any income greater than three percent is a good deal.

                Conoco Philips, symbol COP pays a dividend of 3.7 percent based on the closing price of $71.43 on Friday.  This is the best yield in the industry and COP qualifies as a dividend machine.  If you own the stock by May 19, 2011 you will receive $.66 per share on June 1, 2011.  Do you know that in 2006 the dividend was $.33?  Nice income gain.   I am hoping for a similar performance over the next 5 years. 

                COP is a strong company with only a .33 D/E ratio and it earns a whopping $8.30 per share per year.  Consider this for the income producing part of your portfolio especially if your oil patch is weak.

Very Truly Yours,
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Tuesday, May 10, 2011

Option income Boeing, symbol BA; Caterpillar symbol CAT; and CSX symbol CSX

                Boy is it hard for a girl to make money in this market on dividend machines alone.  You may have noticed that everybody and his brother have been touting dividend machines and pushing their prices higher and higher.  Income investors like me and you need more income than just dividends.  That investment income is generated by bonds or covered call options.  Bonds are still too expensive.  I have been looking but I have not yet found a bond I want to buy.   Therefore, I am looking at covered call income.

Monday, May 9, 2011

Dividend Machine – The York Water Co. symbol YORW

                In the U.S. Sunday was mother’s day.  My mom, who worked at the water company in my home town used tell me to respect water.  Water is important, she would say, “water can cause enormous damage, yet without drinkable water, human life is not possible.  She went on to warn me that “they are not making any more of it.”  With those unbeatable market dynamics, ever growing demand and fixed supply, I decided to invest in a water company.

BOEING, Symbol BA, 17.72% gain in 9 months

                Sometimes we have to wait for good things to happen.  We have to trust our methodology.  Yesterday I profiled three option trades that included Boeing.  Today I want to review the results of a Boeing option trade I started last August.

Thursday, May 5, 2011

Wish List - Dividend Machine additions

          Income Investors, when the market goes down, I always tell you to keep your wish list handy.  Since this blog is not about stock picks I do not provide the pick of the day.  However, I encourage you to consider adding to certain positions.

Wednesday, May 4, 2011

Intel, symbol INTC, income update

                Income Investors, Intel Corporation, symbol INTC, defines the opportunity to bring in a little extra money by writing (also known as selling) a covered call.  When I profiled INTC, as a dividend machine on March 21, 2011 everyone thought INTC was dead; which is why it sold for under $20 bucks.

Sell in May – why?

                Traders buy and sell stocks, bonds, and call options based on trends, charts, historical events and expected events.  Traders also buy and sell on expected unknowns.  They time the market and often times hold a position for less than a minuet.  We do not call these folks buy and hold traders.

Monday, May 2, 2011

Westwood Holdings Group, symbol WHG Dividend Machine May 2, 2011

To know me is to know that I do not like mutual funds.  However, I know that a lot of people invest in mutual funds. I know that very wealthy families and foundations pool their funds to enjoy the benefits of economies of scale and influence. For ordinary investors, however, I have not been fond of mutual funds.  I will write more about that in the future.  Look, mutual funds are popular with ordinary investors and with larger groups.  It is a growing business.  The companies that own and run mutual funds make money.