Thursday, March 29, 2012

Any kind of energy!


Dividend Machine for week of March 26, 2012 - WPZ
           
I am crazy about this stock.  I like it so much that I recently added to my personal position. Energy in every form is needed today and will be in the future.  After all, the sun is just a ball of energy.

Wednesday, March 28, 2012

Dividend Wish List

Dear Income Investors,

I have not yet found the dividend machine for this week.  Although this 2012 dividend project does not use stock price for any purpose other than making sure the yield is at least three percent, today's market made me take a peek at my dividend machines wish list.    I was fishing for yield.

Tuesday, March 27, 2012

Total (TOT) covered call update

Today's reality on Total is different then yesterday's idea.  However, I am still going to use the technique of a covered call to create income and hopefully the call buyer will also purchase my shares because the strike price is so close to the current trading price.

Monday, March 26, 2012

The one that got away!


This post describes one of four covered call strategies that active investors use in today’s market.

Thursday, March 22, 2012

Abbott Laboratories, ABT

Image representing Abbott Labs as depicted in ...
Image via CrunchBase

Dividend Machine for week of March 19, 2012
           
            Some stocks just seem to go nowhere and are ignored by investors.  Everybody wants to own a Google type stock but income investors must execute their investment ideas with precision.  The precision we employ is income.  

This week has been troublesome.  I have my dividend machine wish list but and I finally found a company I own and to which I will add more shares.    Abbott Laboratories was really somnolent in 2011 but it has rallied during the last few months.   More importantly Abbott Laboratories, symbol ABT, has increased dividend income every year for 35 years.  Income investors, this company could be considered a core holding. 

As you know I buy stocks, at least in this dividend machine project, on numbers only.   Each dividend machine must meet the four criteria described in the list on the left.  Yet, it is encouraging to know, ABT is a very diversified health care company.  With around 91,000 employees, ABT operates in 130 countries.   Today ABT is a little weak trading in the $60.19 range and I am adding to my position.

This dividend project which I started documenting in my web/blog in 2011 reflects my theory that it matters not when you buy a dividend machine.   I randomly find one dividend machine per week that meets all four criteria.  Using the 2011 experience, you would have a 10.77% capital gain in addition to the dividend income.  

Below is the table of data I used to evaluate ABT.   You can use this tool to help you select a dividend machine for the income producing portion of your portfolio.


DIVIDEND MACHINE
  ABT


Price when profiled
$60.19
Last 4 Qtrs Earnings
$3.01
Last 4 Qtrs Dividends
$1.92
Current Qtr Dividend
$0.51
Annualized Div Yield
3.39%
No. Years Div Increase
39
Debt/Equity ratio
0.53%


            ABT has declared the next quarterly dividend and you will receive $.51 per share if you own it by April 11, 2012 you will be paid on May 15, 2012.

Very Truly Yours,

TheMoneyMadam

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Friday, March 16, 2012

Sysco (SYY) largest food distributor in the world!

Dividend Machine for March 12, 2012
           
            We have been very fortunate to have already profiled a couple of companies that are not only dividend machines but also have provided covered call income opportunities.    This week, however, we have a straight forward dividend machine.  This company has delivered increased dividends every year for 35 years.

Tuesday, March 13, 2012

Arch Coal ACI Can you image 7.75% income?

Dear Income Investor:


Today I am profiling a bond that I have been considering. Bonds pay interest and have been a key component of the portfolios of income investors forever. Lately bonds have been so expensive that they do not provide much value but as with every market, things change. As I researched this bond, it reminded me that the ordinary investors used to buy and hold bonds all the time. Investors who control their own investments, I believe, enjoy lower costs and have a better handle on their holdings than investors who use pooled investments like bond mutual funds.

Tuesday, March 6, 2012

Can we find a dividend machine in a down market?

Dividend Machine for Week of March 5, 2012  Nucor (NUE) 


                The market is weak today because of lingering international fears.  We have the Greek debt crisis, Iran and Israel, and we have reports that the global economy is slowing.   While it is counter intuitive to think that traders will pay you for a covered call when news is bad but sometimes traders see this as a chance to get in cheap.  They do not buy the stock, they buy your call and have to put up only a fraction of the capital necessary to benefit if news improves.   When we can get this kind of action on a dividend machine, it is a good opportunity for income investors.

Headline news and CAT

Dear income investors:   

You'll notice that Caterpillar (CAT) is performing today just as expected; it is very prone to headline news.    The news is global uncertainty and more significant to CAT the perception that global growth is slowing.

As an income investor, I don't trade, I invest.  I have made a lot of money from CAT and will consider adding to my position when the stock is 10% lower than when I profiled it's potential for covered call income.  So I have my alert set at $103.   At $103 the dividend yield increases to 1.78%.  At some point, headline news will change and I will write a call on CAT with the purpose of making ten percent.

If CAT's stock price continues to wane, I will consider additions at 10 percent increments.  But let us not wish away this opportunity.

TheMoneyMadam
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Thursday, March 1, 2012

CAT CALL

Caterpillar Call - again


TheMoneyMadam could not resist that title.

Caterpillar (CAT) is not a dividend machine but it has cultivated a lot of income for me.   CAT provides consistent income and continues to increase your income.   In fact, CAT’s history of increasing dividends stretches to 18 years.