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| 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.
I have owned NSC over and over again. NSC’s stock price is volatile which provides opportunities for covered call income. I lost NSC a long time ago to a covered call and I have been waiting to get it back.
Look at this company from the dividend machine viewpoint and it qualifies on every level. NSC earned $ 5.53 during the past four quarters. Were you worried about business during the past four quarters? In spite of the trouble with US fiscal matters, NSC has earned a lot of money. However, we income investors care only about how much money we received. NSC paid out $ 1.94 per share during the last four quarters. This is a good ratio. NSC’s currently quarterly dividend is $.50 at the closing price of $57.51 the annualized dividend yield is 3.42%. It has paid dividends since 1902 and has increased the dividend every year for the last 10 years. Moreover, NSC does all this business on just a 1% D/E ratio.
The table below presents NSC’s dividend machine values.
DIVIDEND MACHINE
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11./12/.2012
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Norfolk Southern
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NSC
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Price when profiled
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$57.51
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Last 4 Qtrs Earnings
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$5.53
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Last 4 Qtrs Dividends
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$1.94
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Current Qtr Dividend
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$0.50
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Annualized Div Yield
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3.48%
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No. Years Div Increase
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10
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Debt/Equity ratio
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1.00%
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Discipline is very important when you invest your money. Sticking with your disciplined approach is difficult when the market is nasty, but I think over time a disciplined approach is best. Disciplined income investors might find Norfolk Southern, NSC, a good fit.
Very Truly Yours,
TheMoneyMadam
