Back from vacation and I have to put some money to
work. That happens when you are Charlie
Munger (he mentioned in a Wall Street Journal Article that $125K showed up in
his account but he just could not find anything he wanted to buy at this
time.) http://online.wsj.com/articles/the-secrets-of-berkshires-success-an-interview-with-charlie-munger-1410543815
Money shows up in the ordinary investors account as
well. When you are an income investor dividends
build up, but you spend those; bond Interest accumulates but you spend that; then
we have covered calls. I pocket the
income from call premiums but recently I have had several stocks called away at
a profit and now I have to put that money to work. Therein lies the difference
between me (we ordinary investors) and Charlie Munger. He
does not have to invest the money for income and I do because that means
we can spend even more, or save even more, or give away even more. We just want more income. Let’s get to work.
Bonds or Stocks
I looked for some junk bonds including some retail
names that have suffered recently like Sears symbol SHLD, JC Penny symbol JCP, Best Buy
symbol BBY, and Istar symbol STAR. I
just could not take the risk on the 4% for three years or the 5% for five
years. Earnings were bad, and I could
not see any redeeming fundamental other my shopping activity so I have to pass
on the bonds. What stocks are worthy?
MDP, CVX, SO
I am looking for a stock that meets all my 2014
dividend machine criteria and has had a stock price correction of at least
10%. I looked for a few small financial
companies like AUBN or CINF but most often they just do not have dividend increases
that we need. Other companies that
have corrected no longer have EPS greater than the dividend like DRI or
LDR.
Three stocks are of interest. Meredith Publishing symbol MDP meets all the
criteria so I will add to my position.
Note that MDP was named a 2014 Dividend Machine in April. http://www.themoneymadam.com/2014/04/dividends-income-mdp-next-2014-dividend.html
Chevron, symbol CVX, at $122 is a buy but above $122
it is a hair short of my 2014 minimal yield of 3.5%. Like MDP, I already added Chevron to the 2014
Dividend Machine portfolio. http://www.themoneymadam.com/2014/01/dividends-income-2014-dividend-machine_20.html
Southern Companies, symbol SO, meets all the
criteria to be named a 2014 Dividend Machine but for the purpose of this post
the stock price correction is only 7.9% and SO would not qualify. I have owned SO through thick and thin and
I will add to my position based on its Dividend Machine fundamentals.
Review the tables below to learn about the dividend
fundamentals of these three companies. Then
you can decide if you want to initiate or add a position for the income
producing portion of your portfolio.
MDP Dividend Machine Fundamentals
CVX Dividend Machine Fundamentals
SO Dividend Machine Fundamentals
TheMoneyMadam
