In
this blog I write about stocks that I think will provide a steady and increasing stream of income. This blog is not about what to buy today or
sell tomorrow. This blog provides income
ideas for the ordinary investor to consider.
Income ideas that the ordinary investor can
manage on their own.
Three
Pillars of Income
My
three pillars of income that an ordinary investor can manage on their own are stocks
I call Dividend Machines, covered calls on certain dividend paying stocks, and
high yield bonds at par or less.
- Dividend Machines
- Covered Calls on dividend paying stocks
- High yield bonds at par or less
A Dividend Machine Discipline
In
order to measure the effectiveness of the Dividend Machine portion of this strategy,
I keep track of the Dividend Machine stocks about which I write. The results are analyzed by year and you can
find the results in the Model Portfolio Page of this blog.
I
do not recall writing about selling any of the Dividend Machine stocks because
I do not manage these portfolios. I write about Dividend Machine stocks that I
think are worthy of consideration when investors have money to buy.
Investors buy
when money is available not on the first day of trading in January. They may buy when the market is up or maybe
when it is down. They buy when they have
money.
It
seems to me that you have a good chance of achieving a well balanced income
producing investment portfolio if you buy income investments when that money is
available no matter if the market is up or down provided that you pick your
investments with precision.
That
is the point of using a discipline like Dividend Machines. When the market is soaring, a stock may be so
expensive that the yield is no longer attractive. You don’t need to chase that stock.
Stocks
move into and out of the realm of “Dividend Machine.” Other times a stock price decreases so
much that the yield combined with dividend history and financial safety make a
stock a compelling buy. You have to filter out the noise and stick with a discipline.
So far in 2015, who knows what the overall market will be doing when you have the
money to buy? Each day brings intense
volatility. Therefore I find it even
more important to avoid the noise and invest for income with discipline.
Widow
and Orphan’s Stocks
One
is not surprised to find a lot of utility stocks in this group. Although I must say that even I am surprised at the degree of diversification in the portfolios I have written about so far.
Utilities are often called stocks appropriate for
widows and orphans suggesting they need steady sources of income. Many of us ordinary investors have the same
investment needs as “widows and orphans;” we need income.
Avista,
symbol AVA
Avista
is my next 2015 Dividend Machine stock.
Avista is a utility company in the Northwest. AVA is a Dividend Machine. AVA just increased the quarterly dividend from
$.3175 to $.33 which is a about a 4% increase; their five year average dividend
growth is 6.4%. Today, AV closed at
$34.84 which makes their forward yield 3.788%. Last four quarters EPS were $3.17 with
dividends paid out of $1.27. Debt to equity
ratio is .98 as compared with an industry average of 1.22. You need to own AV by February 18, 2015 to receive the dividend.
The
Table below presents AVA’s Dividend Machine Fundamentals.
Consider
AVA for the income investing portion of your portfolio.
TheMoneyMadam
* For tracking purposes, the basis of this Dividend Machine will be the closing price on Tuesday 2/10/2015.
* Disclosure no position but may add.
