Monday, June 16, 2014

Dividends & Income Staples SPLS

When I find a Dividend Machine, I have to tell you.   Them’s the rules as they say in old novels.

I have been retired for nearly 5 years.    That has implications.   For instance as an investment advisor, I will be able to shred all those documents an investment professional has to keep for five years. 

It also means I do not shop for office supplies like I did before I retired and I don’t know if one office supply store is better than the next.   That gives you a hint that this post is about a stock that qualifies as a Dividend Machine and is in the office supplies space.

The Next 2014 Dividend Machine SPLS

I was quite surprised that my routine screening for Dividend Machines today came up with an office supplies stock that meets all 2014 Dividend Machine criteria.

You may be skeptical of my procedure but it is simple, the data are easy to find, and by golly it works; just look at the 2011 model portfolio up more than 50% with a yield on basis of 4.5% and a yield on current value of almost 3%.    Or you could look at the 2012 model portfolio, up 35% with a yield on basis of 4% and a current yield of just over 3%.   And then there is the 2013 portfolio with a gain of 18% and a yield on basis of 4.4% and a current yield of 3.73%.    Why not trust this process.   In 2014, we are buying at highs and yet we have an 11.64% gain with a yield on basis of 4.10% and a current yield of 3.67%.

The newest 2014 Dividend Machine is Staples, SPLS.    I hear ughs out there like I did with Pitney Bowes.    With that in mind, let’s look at SPLS’s Dividend Machine Fundamentals.

STAPLES, SPLS, Dividend Machine Fundamentals.

See the table below for a succinct display of SPLS’s Dividend Machine fundamentals.  SPLS earned $.85 during the past four quarters with a dividend payout of $.48.   Five years ago, SPLS paid a dividend of $.0825 per quarter and this year it pays $.12 per quarter.  That is a gain of 14% per year on average.    One has to note that they have not increased the dividend lately yet they technically meet all the 2014 Dividend Machine criteria.   

I found out in 2011 that using the Dividend Machine strategy creates a portfolio that is diversified on every level including price.   SPLS closed today at $11.05.   It is nice to find a cheap stock rather than just the expensive stocks like Chevron, CVX.  Consider Staples, symbol SPLS for the income producing portion of your portfolio.