Telecom as a sector is down over six percent over
the last three months and that is where I am looking for opportunities. Yet, I do not want to own AT&T (T).
Where, then should we look?
The only non U.S. stocks I have profiled are
telecoms. Telus (TU) and BCE (BCE) are
both Canadian telecoms that have passed the Dividend Machine criteria hurdle in
the past. See Posts: http://www.themoneymadam.com/2011/03/dividend-machine-bce-inc-symbol-bce.html & http://www.themoneymadam.com/2011/08/dividend-machine-telus-company-symbol.html.
BCE was profiled early in this blog when my criteria
were based on the most recent quarterly results. In 2014 my criteria are more strict and I
want not only a minimal dividend yield of 3.5% which BCE pays (5.33%) but I
also want a history of a four percent dividend increase average over the past
five years and BCE is a little bit spotty in that area.
Telus, also profiled early in this blog also has a
funky dividend history but the board of directors has announced that dividend
increases will be twice a year until 2016 with the increases to average 10% per
year. Should this come true, TU just
may be a Dividend Machine again.
CURRENCY
EXCHANGE
The problem with foreign stocks, even when they are
ADR’s or ADS’s, is the usually conduct business in their own currency and the
exchange rate between their currency and our dollar will affect your income.
With that in mind I am going to name Shaw
Communications, symbol SJR, as the next Canadian Telecom company to be a
Dividend Machine.
DIVIDEND
HISTORY
SJR pays a monthly dividend. This is good for people who need more
predictable cash flow. To evaluate the
dividend history, I used full year dividend payouts from five years ago and
most recently to determine that the dividend has increased about 4.6% per
year. Current yield is about 4.3%. Earnings clearly exceed dividends and the D/E
ratio is 1.040 well within industry standards.
For comparison purposes, AT&T makes less than it pays out in
dividends and Verizon has a ton of debt.
DIVIDEND
MACHINE FUNDAMENTALS
The Table below presents SJR’s Dividend
Fundamentals.
Consider Shaw Communications (SJR) for the income
producing portion of your portfolio.
The
Money Madam
