I have found my next
2014 Dividend Machine.
This
stock’s average annual dividend increase over the past five years was
9.36%. Since it also sports a current
dividend yield of 3.98%, has earnings that far exceed the dividend payout and a
debt to equity ratio of .4159, this stock is a 2014 dividend machine.
Conoco Phillips, (COP)
Dividend Machine Fundamentals
COP
closed at $70.35 on Friday, March 28.
COP paid a $.69 dividend on March 3, 2014. That is a yield of 3.98%. This
year I need more income and I am looking for at least 3.5% yield. COP definitely exceeds that hurdle.
Since
2008, COP’s earnings per share have been consistently higher than the dividend
paid out. During the most recent four
quarters. COP’s earnings outpaced dividends by $7.38 to $2.73.
In
addition to increasing the minimum yield I receive, I also want to invest for
income growth. 2014 Dividend Machines
must, therefore, show me that over the past five years dividend increases were
at least 4% per year.
COP
on average has increased the dividend an average of 9.36% per year. In 2009 the quarterly dividend was $.47 and
five years later it is $.69. Usually,
a stock that qualifies as a Dividend Machine will have increased the dividend
every year. This is not true for
COP. During 2011 and 2012 the dividend
held steady but then increased enough to deliver more than 9% per year.
The
table below presents COP’s dividend machine fundamentals.
My Concerns about COP
Judicious
execution of my dividend machine strategy requires that I ignore that COP is
trading just off the 52 week high. Actually,
COP is trading just off the 5 year high.
But I must stick with my strategy because so far the past three years of
picking dividend machines using my four criteria while I ignored other factors
like 52 week highs has worked out well. Therefore, COP will be a 2014 Dividend
Machine.
TheMoneyMadam
