For
every expert opining that interest rates are going up, you can find another who
is convinced they are not. I know that
predicting interest rate direction can make a fool of the best trained and
intentioned economist.
Predicting
interest rates can also make fools of traders.
Yet, we are not traders or economists; we are income investors. History, (see the previous Dividend Machine
portfolios) suggests that we should ignore economic noise and stick to a
disciplined strategy for picking our income stocks.
In
this post I am profiling the next 2015 Dividend Machine. I selected this stock using my four 2105
Dividend Machine criteria. The
connection to interest rates is based on the fact this new Dividend Machine is
a regional bank.
Theory
holds that if interest rates do go up, banks will benefit from a steepening of
the interest rate curve. When long
duration interest rates are greater than short duration interest rates, banks
can lend out at an interest rate higher than they pay depositors. If interest rates do not go up, this stock
has a history of paying and growing the dividend.
Washington
Trust, symbol WASH Dividend History
Washing
Trust is a regional bank in Rhode Island.
Dividends have been paid since 1988.
During the major credit market disruptions that occurred in 2008, WASH
held the dividend steady at $.21 for 11 quarters. In March of 2011, they commenced dividend
increases again. If you look back five
years to 2010 you will see the dividend increases have averaged 7.75%.
WASH
Dividend Machine Fundamentals
WASH
earned $2.51 during the past four quarters and paid out $1.36 in
dividends. Today it is trading at
$36.87 with a dividend yield of 3.68%.
Debt to Equity ratio, D/E is 1.155 which is within industry standards. The table below presents WASH’s Dividend
Machine Fundamentals.
In
addition to its Dividend Machine fundamentals, Washington Trust, WASH, provides
industry diversification for a 2015 Dividend Machine Portfolio that is heavy on
energy.
Consider
WASH for the income producing portion of your portfolio.
TheMoneyMadam
