Monday, September 17, 2012

Dividend Machine for week of September 17, 2012 is ABM


          Each week as I search for a company that is a dividend machine, I am impressed with the size of the universe of stocks from which to pick.

          Upon completion of my 2011 dividend machine project, I elected to continue the project of searching for dividend machines in 2012. I wondered; would I simply find the same stocks as I did in 2011?

          Stocks move in and out of the universe of available stocks all the time. A company moves into the group if their stock price goes down but they maintain their history of dividend increases and now the yield is equal to or greater than 3%.   Some companies move out of the group due to price increases and their yield is no longer equal to or greater than 3%.  Sometimes I miss a good stock in spite of looking for them all the time.

          This week the first stock I found that meets my four dividend machine criteria is ABM Company.   I did not run across this company during the past 22 months of this project. 

ABM is in the sanitation business.  Different from Waste Management’s focus on trash management, ABM has a diverse group of businesses that do things like clean buildings.  

          The table displayed bellowed presents the fundamentals that clearly show ABM is a dividend machine.  

ABM Co (ABM)



Price when profiled
$18.79
Last 4 Qtrs Earnings
$0.98
Last 4 Qtrs Dividend
$0.58
Current Dividend Yld
3.08%
No. of Years increased
47
Debt/Equity ratio
31.00%


          I found no calls on ABM, although it carries a beta of greater than one.   Therefore, if you use ABM as one of the companies for the income producing portion of your portfolio, you will get about a 3% yield that increases every year even during bad times.  If you own it by October 2, 2012 you will receive the quarterly dividend of $.1450 on November 5, 2012.  At today’s price of $18.79, ABM’s yield is 3.08% .   ABM has been in business since 1909 and has raised the dividend every year for forty seven years.  Their D/E ratio is only 31%.

          Only you can decide if this is a good stock to buy.


Very Truly Yours,


TheMoneyMadam