Sunday, December 2, 2012

Dividend Machine for December 3, 2012

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.



Northrup Grumman

Price when profiled

Last 4 Qtrs Earnings

Last 4 Qtrs Dividends

Current Qtr Dividend

Annualized Div Yield

No. Years Div Increase

Debt/Equity ratio

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


Very Truly Yours,


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