In this post I will review the criteria I use to select a stock
that I believe will provide reliable income; income that increases; and leads
to finding a solid company. Conoco Phillips,
COP is a stock I will add to my 2013 dividend machine list. Analysis of the dividend machine fundamentals
of COP is provided below.
Easy to Find Criteria
Four Criteria
|
|
Dividend Yield
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Three Percent
|
Earnings
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EPS greater than div.
|
Dividend Increases
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Every year since at least 2007
|
Debt to Equity
|
D/E ratio 1 or less or industry
standard
|
These four criteria are easy to find. I search the WSJ, or TheStreet.com, or sometimes a tip from TV for stocks that are potential Dividend Machines.
Often, I have to research 10 stocks to find one I like. Next I begin to gather these four easy to
find criteria using www.nasdaq.com and www.investing.money.msn.com.
Nasdaq.com
Type in the stock symbol then click on “summary” on
the left side of the page under “stock details.” You will find the current price, the most
recent four quarters of earnings (EPS), the annualized dividend, and the
yield. Next click on “dividend history” on the left side of the
page under “fundamentals” and you will see quarterly dividends displayed for up
to about ten years. You now have three
of the four criteria.
Note, that I often go to the website of the
individual company to make sure the data are accurate. However, I have found Nasdaq.com to be one of
the more accurate websites for this kind of information.
Investing.Money.MSN.com
This site provides easy to find debt to equity
ratio. Type in the stock symbol and you
will see a summary similar to nasdaq. If
you scroll down, you find the debt to equity ratio of this company. Now you have all four criteria to help you
determine if the company you are considering for an income investment is truly
a dividend machine.
Conoco Phillips COP
DIVIDEND MACHINE
|
4/9/2013
|
Conoco Phillips
|
COP
|
Price
when profiled
|
$59.84
|
Last 4
Qtrs Earnings
|
$6.69
|
Last 4
Qtrs Dividends
|
$2.64
|
Current
Qtr Dividend
|
$0.66
|
Annualized
Div Yield
|
4.41%
|
No.
Years Div Increase
|
since 2005
|
Debt/Equity
ratio
|
.45%
|
Conoco Phillips is my selection for the next 2013
dividend machine. Let’s look at the
fundamentals. Trading today around
$59.84, COP pays a quarterly dividend of $.66 per share. Annualize that dividend (4 times $.66) and
you will received $2.64 per share. That
is a yield of 4.41%. You beat the US
treasury by 150% if you investment in COP[l1] .
COP earns a mighty $6.69 per share. It is highly likely that COP will continue to
be able to pay this dividend in the future.
Dividend history is solid. COP
has increased the dividend every year since 2005 which includes the very
difficult period of 2008/2009.
Finally, for every dollar of equity, COP has only
$.45 of debt. This is a good, solid
company. See the table above and then
decide if you too want to investment in this kind of dividend machine.
TheMoneyMadam
