Monday, November 26, 2012

Dividend Machine Wish List Nov 2012


Dividend Machine companies profiled in 2011, in the aggregate are up, their dividends have increased and that is good. Yet some of those companies have suffered price decreases.   Some say this is a buying opportunity. If indeed this is a buying opportunity,  maybe I should add to those 2011 dividend machine companies that are cheap. 


Others say growth is slow; taxes are a roadblock and dividend machines are going to have a rough road ahead.  Indeed, the dividend machine companies profiled in 2012 are, in the aggregate, not up as much as the 2011 portfolio.


Where can an income investor get “mail box money?”   You cannot get it in bonds and it is hard to digest gold or even to make change.   If you know how to fix toilets, buy up some rental houses.  The rest of us need to look at good old boring dividend machines. 


The table below lists those companies profiled in this blog that have suffered price decreases since profiled but have increased earnings since profiled.  The current dividend yields are provided.  This is a good place to start looking for bargains.

SYMBOL
EPS when profiled
Most Recent 4 qtrs EPS
Most Recent Div annualized
Price
Yield
INTC
 $         2.01
 $              2.29
 $                   0.90
 $     19.89
4.53%
MGRC
 $         1.62
 $              1.84
 $                   0.94
 $     26.90
3.49%
MPR
 $         0.41
 $              0.48
 $                   0.28
 $       9.06
3.13%
NJR
 $         1.92
 $              2.26
 $                   1.52
 $     39.64
3.83%
PBI
 $         1.46
 $              2.95
 $                   1.50
 $     11.11
13.50%
RSG
 $         1.26
 $              1.71
 $                   0.94
 $     28.10
3.35%
ED
 $         3.17
 $              3.81
 $                   2.42
 $     54.88
4.41%
TCP
 $         2.06
 $              2.65
 $                   3.12
 $     40.80
7.65%
WGL
 $         2.50
 $              2.71
 $                   1.60
 $     37.99
4.21%


Very Truly Yours,


TheMoneyMadam

Sunday, November 25, 2012

Laclede Group Inc. dividend machine for Nov. 26, 2012

Wednesday, November 14, 2012

Norfolk Southern, NSC Dividend Machine for week of 11/12/2012

Norfolk Southern Engine along KCS rail.
Norfolk Southern Engine along KCS rail. (Photo credit: Wikipedia)

Norfolk Southern, NSC is my Dividend Machine for this week  November 12, 2012

           

            In every crisis, an opportunity can be found.  The transports were killed today and today I looked for dividend machines and would you not know it, Norfolk Southern was the first company I found to qualify as a dividend machine.

 

          

Income Investor receives surprise gift.




When I invested in Conoco Philips, COP I expected to receive annual income increases because COP is a dividend machine.   I also expected price volatility.  Price volatility can lead to covered call income opportunities and indeed, COP provided that increased income over time.  But, the dividend and the covered call income are not the gift of which I write.

Thursday, November 8, 2012

Questar STR Dividend Machine for 11/8/2012 Are utilities still a good income investment?

English: Natural gas burning
English: Natural gas burning (Photo credit: Wikipedia)

Questar symbol STR Dividend Machine for week of November 5, 2012
           

            Questar is a gas utility that serves the Rocky Mountains and Questar is the first dividend machine I found today.   The most recent trade was $19.37 which makes STR a very affordable dividend machine for investors.  STR also fulfills the needs of investors who want an energy play that concentrates on gas.

Monday, November 5, 2012

Romney/Obama and dividend machines


Comment on what I will do with my dividend machine portfolio in view of the U.S. Election.

No matter what happens with the election, we income investors have the same investment choices.  You must ask yourself, Can I make more income on my principal if I sell my dividend stocks and invest in something else?  Should I sell my dividend machines and move into bonds?   Should I sell my dividend stocks and hold cash.  You cannot predict how any market will perform even after you know the election results.  You can only examine the opportunities available to you at the time.  Let’s look at some scenarios.

Thursday, November 1, 2012

INSTRUCTIONS for USING my COVERED CALL CALCULATOR

COVERED CALL CALCULATOR

Instructions for using TheMoneyMadam's "Covered Call Calculator."

I enhance my income with income from covered calls and I encourage you to learn this technique. 

My Covered Call Calculator is a tool I use all the time; so I put it on my website to help you learn how to use covered calls as part of your income investing strategy.

Begin by entering the price you paid for a stock COST BASIS.  Remember this is not an options trading strategy.  Options traders buy and sell options. We income investors buy and sell income producing stocks.  We already receive dividend income; we sell calls for extra income.


Next, enter the STRIKE PRICE of the call option.  The strike price is the price the call buyer pays you for your shares if they decide to buy your stock before their option expires.  The buyer has no obligation to buy your stock. You, as the seller, have the obligation to sell the stock at the strike price. Your goal is to receive close to a ten percent gain on your stock if the buyer actually follows through and buys your stock.  Otherwise, it may not be worth the effort.  After all, the stock is already creating income for you.

The Covered Call Calculator will immediately display the GAIN in dollars and the GAIN YIELD in percent that you will reap if your stock is bought at the strike price. Your goal is around 10%.
Once you have determined that you will receive enough of a gain from the strike price, you need to see if the income from selling the option is worth it.   

Enter the CALL PREMIUM which is the income per share you will receive from selling the call option. The Covered Call Calculator will immediately display the CALL YIELD from that income.  Your goal is to make enough money from the call premium that it is worth potentially giving up your stock.  I like the income from the premium to be at least equal to a quarterly dividend. For instance, if a stock pays you $.25 in dividends per quarter and the stock trades at $25.00, your annual dividend yield (sum all four quarters of dividends and divide by the stock price) would be 4%.  If you can get additional income equal to or greater than $.25 from the call premium, the call yield is 1% and your income yield increases to at least 5%. 

That is all there is to using the call option calculator.  Try it.  If you want to boost your income, selling call options is an effective strategy for income investors who use dividend stocks for a portion of their income.

TheMoneyMadam 

An excellent article from Yahoo on Covered Call Investing. Click Here!