Alliance Resource Partners (ARLP) is the eighteenth Dividend Machine for 2013
Dividend and Income investing requires a plan and a lot of discipline to be successful. It is not for everyone, but, if you are planning to no longer work and want your savings to generate at least some of your income, you need to learn how to invest using dividends.
Think of it this way: $1,000,000 (one million) dollars invested in
a well respected low cost EFT such as SPDR’s SDY, will produce about $22,100
dollars of income per year. Dividend
Machines can deliver around $37,500.
Which one would you like?
You can boost your income using covered calls and
below par high income bonds. These
investments require some work. Or, you
could consider the newest 2013 Dividend Machine Alliance Resource Partners,
ARLP. I do not recommend putting all
your eggs in one basket, but ARLP should pay about $60,000 income on that
million dollars.
Dividend
Machine Strategy
To qualify as a Dividend Machine a company has to
have good fundamentals and a good history.
Four criteria must be met and they include E.P.S. that are greater than the
dividend payout. A minimal three percent
dividend yield and we would prefer higher; dividend increases every year for a
sustained period of time and finally a debt to equity ratio of 1 or less or
equal to industry standards.
This year I wanted to pick a dividend machine with
one other characteristic that would make it a compelling buy. In the past, I simply picked a dividend
machine based on the four basic criteria.
I have never used trends, market moves, or other
factors to determine if and when I should buy a stock for income.
Why is
Alliance Resource Partners (ARLP) compelling?
Presented in the table below are ARLP’s dividend
machine fundamentals. This stock meets every
criteria. The reason I really want to
add ARLP to my income portfolio is rate of dividend increases.
In November of 2008, ARLP paid a quarterly dividend
of $.70 per share. This year, five years
later, the quarterly dividend will be $1.175 if you own the stock on 11/12/2013. ARLP’s dividend has increased 13.6% per year
on average or an increase of 67.86% in five years. The SDY has also increased the dividend but
not as much as ARLP.
Consider Alliance Resource Partners (ARLP) for the
income producing portion of your portfolio.
The
Money Madam
To qualify as a Dividend Machine a company has to
have good fundamentals and a good history.
Four criteria must be met and they include E.P.S. that are greater than the
dividend payout. A minimal three percent
dividend yield and we would prefer higher; dividend increases every year for a
sustained period of time and finally a debt to equity ratio of 1 or less or
equal to industry standards. 
