Sunday, December 2, 2012

Dividend Machine for December 3, 2012

F-14ATomcat
F-14ATomcat (Photo credit: John H Gray)

Northrup Grumman (NOC) is my Dividend Machine for week of December 3, 2012

           

            Personally, I hope we go “over the fiscal cliff.”  That is not the subject of this post but it is relevant.  You see by going over the fiscal cliff, maybe we could force the government into some type of budget control.  The fiscal cliff requires defense spending cuts.  This cannot help but provide buying opportunities in aerospace and defense companies.   Another factor relating to the fiscal cliff and income investors is the effect on dividends.   Dividend companies will suffer for a while because by going over the “fiscal cliff” taxes on dividends will increase from 15% now to as much as 43%.    However, if you use qualified retirement accounts for your dividend machines, you will get some bargains.  Those of us who use ROTH IRA accounts for dividend companies can buy these companies on sale and receive distributions that are tax free.   So I say go ahead, go over the cliff.

 

            Now for this week’s subject, our next dividend machine is Northrup Grumman symbol NOC.   NOC traded on Friday at about $66.67.  Their last four quarter earnings were a mighty $7.75 and their paid out dividends were $2.20.  Their current dividend yield is 3.33%.  Dividends have increased every year since March 23, 2005.  They have the lowest D/E (debt to equity ratio) of the industry at just .36.

 

            The table below presents NOC’s fundamentals.

 






DIVIDEND MACHINE
11/30/2012


Northrup Grumman
NOC


Price when profiled
$66.37


Last 4 Qtrs Earnings
$7.75


Last 4 Qtrs Dividends
$2.20


Current Qtr Dividend
$0.55


Annualized Div Yield
3.31%


No. Years Div Increase
7


Debt/Equity ratio
36.00%





            Consider NOC for the income producing portion of your portfolio and fear not going over the “fiscal cliff.”

 

Very Truly Yours,

 

TheMoneyMadam
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