Wednesday, February 1, 2012

DIVIDEND MACHINE for week of January 30, 2012 MSA

Dividend Machine Mine Safety Appliances (MSA)
           This week (January 30, 2012) we have a company that I would call “steady as she goes” for our Dividend Machine pick. You might call it boring but this baby has been a Dividend Machine for quite a while.

            I want to remind you that this Dividend Machine project is based on the theory that you could buy a company about every week, without regard to the price you paid, and if that company meets the four basic criteria we use to define a Dividend Machine, you will own companies that pay ever increasing income.  You will own a group of companies that have a very low chance of going out of business.  And, as a group, your investments should hold or even increase in value.

          When I was in the training phrase of becoming a registered representative (stock broker) and then a registered investment adviser, I read study after study that tried to prove that even if you invested at the top of the market, you were better off than if you waited to a later point in your life.   I didn’t really believe the data but I know it is not possible to try to time the market successfully.  This is why I do not comment on the price of a stock.  Price, as far as Dividend Machines go, only determines the dividend yield.   Even if the best 2011 Dividend Machine has increased in price so much that it no longer yields the minimum three percent, it will not be on this year’s Dividend Machine List.

            On to Mine Safety Appliances, symbol MSA which at today’s price of $34.14 pays a 3.046% dividend yield.  Their quarterly dividend is $.26 per share.  The dividend has increased every year for, get this, 41 years.  MSA’s past four quarter EPS (earnings per share) were $1.67 versus the dividend payout for same time period of $1.04.  Their debt to equity ratio (D/E) is .82.


            Consider MSA as one of your Dividend Machines.  While I do not profess to know if the price of this stock will go up or down,  at $34.14 it is affordable for the ordinary investor. 

Very Truly Yours,

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