Monday, August 29, 2011

Travelers Company, symbol TRV Dividend Machine for August 29, 2011

          Income investors take note that during down markets, we have more choices for income investing than we have during up markets.  I was torn between profiling another utility or looking for a company in another industry.
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Friday, August 26, 2011


An example of a cheque.Image via Wikipedia
I think this is one the more simple decisions to make.  You need to know how much you spend every month and how much monthly income, if any.
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Monday, August 22, 2011

Dividend Machine Telus Company, symbol TU – August 22, 2011

Fibre optic strandsImage via Wikipedia

Simple income investing leads us to the third telecom company to be included in my list of dividend machines.   Telus Company is a Canadian telecommunications company delivering both landline and wireless service to Western Canada.
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Thursday, August 18, 2011

How to decide if a covered call premium is enough?

          Readers of TheMoneyMadam's blog know that our sole focus is creating income and doing it with simple income investing techniques.  During turbulent times, selling calls (read my post on how to write, also known as sell, a covered call) is a good opportunity to create income.  I am often asked how to decide if the premium is enough?
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Monday, August 15, 2011

Cullen and Frost, symbol CFR, dividend machine for August, 15, 2011

State Seal of TexasImage via Wikipedia

Dividend machine, Cullen and Frost Bankers, symbol CFR, has been on my radar screen for quite a while.  CFR was just a bit too expensive for me and I was too nervous to buy it at a recent low of $43.04 in February of 2009.
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Wednesday, August 10, 2011

Chevron, symbol cvx 20 percent down

Chevron now pays a dividend yield of 3.5 percent. The price $90 is 20 percent off the high. It could go lower but I think it will continue to pay us and increase our income over time. If you liked it at $100, buy it at $90.

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Buy your dividend machines at 10 percent down

Check the list; select your favorite stock. If it is still a dividend machine, in other words the stock still makes more money than it pays you, has at least a three percent yield, a good balance sheet, and has increased the dividend every year, then buy it on sale.

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Monday, August 8, 2011

Consolidated Edison, symbol ED, dividend machine for August 8, 2011

Con Edison plant on the East River at 15th Str...Image via Wikipedia

Income investors have to both hate and like the recent action of the stock market.  We are partially immune from the price gyrations but not totally.  After all, we do not have ice in our veins; we just have investments that deposit money in our checking account with little worry.  But it is difficult to see the value of an investment decrease.  My advice is the same as always.  Try not to worry as much about your portfolio value and more about the income it creates.
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Thursday, August 4, 2011

An income investor's dream

Today was indeed unique.  Not only could you buy income on sale, you could write calls against it immediately.  It takes two sides to make the market work and we were on the contrarian side.  Moreover, someone else out there is even more contrarian I am and they bought  my calls.
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Tuesday, August 2, 2011

Almost Dividend Machine Target, symbol TGT

This is a row of Cash Registers at a Target st...Image via Wikipedia          Target comes and goes in my portfolio.  TGT pays an ever increasing dividend and has earnings nearly four times the payout.  Their debt to equity ratio is 1.00 which is the upper limit for a company in my income portfolio.    Target is not quite a dividend machine because the dividend yield is only 2.42%.  However, as readers of this blog know, I often use almost dividend machines that have call options to goose my income.
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Monday, August 1, 2011

NORTHROP GRUMMAN, Symbol NOC, dividend machine for August 1, 2011

The Lockheed C-130 Hercules serves as the prim...Image via Wikipedia

Years ago when I first started in this business a colleague suggested to me that I buy more than one stock in each of the areas I wanted to invest.  At that point in time, I still worked and did not have as much interest in dividend stocks.

His advice applies to dividend machines as well. Northrop Grumman, symbol, NOC is the second stock I have profiled in the aerospace industry.

The first was Lockheed Martin, which with the dividend and covered call income has been a stellar performer for the income investor.

NOC earns a mighty $6.53 per share and that number goes up all the time.  If you own NOC by August 25, 2011, you will receive the quarterly dividend of $.50 per share on September 10, 2011. NOC’s annual dividend is $2.00 a share to investors.

NOC’s dividend, as is required for a dividend machine, has increased every year for at least the past five years.  Based upon the closing price on Friday, July 29, 2011 of $60.51, NOC’s dividend yield is 3.31%.  For a large manufacturer with very capital extensive products, it is refreshing to see NOC’s D/E ratio at only .33.

An investment the income investor can love.

Very Truly Yours,
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