Sunday, October 26, 2014

New Dividend Machine for 2014

When you visit the Wilbur D May museum in Nevada, you learn that this very successful man sold his stocks just before the crash of 1929 not because he was prescient, but  because he was going on an extended trip and that it was a prudent move.  As the story is told, he bought back at 10 cents on the dollar.

This story shows that luck is a big factor in selling high and buying low.  The rest of us have to use discipline to build our income producing portfolios.   Good luck may yield a greater gain for the lucky few, but discipline provides steady and increasing income for the rest of us.

Discipline drives the 2014 Dividend Machine Criteria

With that in mind, let me remind you that we are searching for stocks that yield at least 3.5%.   These stocks must have increased the dividend at least 4% per year over the past five years and they should earn more than they pay out and have a debt to equity ratio less than 1 or within industry standards.

McDonald's, symbol MCD, is just such a stock.  MCD meets all four criteria for inclusion into the 2014 Dividend Machine portfolio.

MCD was a 2012 Dividend Machine

MCD was a Dividend Machine before. In October of 2012 MCD met that year's Dividend Machine criteria.

Price has increased 5% and dividends have increased 5.2% since that post.   These are good results for an income investor.  MCD's 2014 Dividend Machine fundamentals are presented in the table below.

Consider McDonald's, symbol MCD, for the income producing portion of your portfolio.