Sunday, August 2, 2015

Quester, STR the next 2015 Dividend Machine

When I last posted (before I went fishin’,) the Dow closed at 17,731.92; it sunk to 17,440 and rebounded to 17,689.86.  Not exactly a lot of beta.  But this is a stock pickers’ market and individual stocks can be more volatile than the overall market.   That means you could be suffering like my 2015 Dividend Machine Portfolio is suffering.   

2015 Dividend Machine Portfolio

TheMoneyMadam’s 2015 Dividend Machine Portfolio stocks have lost over 8% (not including dividends.)  If you bought SDY or VIG instead of the stocks I profiled, you would still have losses but only 1%.  

2015 has been very challenging.  We savers are punished by low interest rates that require us to seek income from rental properties, high risk debt, or income stocks.  This imbalance of income supply has created a market of overvalued dividend stocks, bonds and rental properties.

Yet as an income investor, your income from the 2015 Dividend Machine stocks would be $2,828 on a basis of $72,450 or 3.9%.   Yield on current value is 4.27%.    SDY and VIG provide $1,860 and $1,579 of income respectively.  As an income investor, I will take the losses and spend the dividends. See the table below.

Do not give up on income stocks because the other categories of income are still challenging as well.  I remain committed to my Dividend Machine experiment and must stick to my four stock picking criteria.  Later this week I will post an article that suggests which stocks I would buy, sell or hold from my 2011 Dividend Machine Portfolio.  Today, I am adding a 2015 Dividend Machine stock.

Income Investing Goals

I strive for enough income from my stocks to meet my routine expenses without having to sell assets.  Moreover, I expect my income to grow at a rate greater than inflation.   I am seeking a 3.5% yield.  The stock has to earn more than it pays out in dividends; it has to have increased the dividend at a rate of at least 4% per year for the past five years and has to have a debt to equity ratio of 1 or less or equal to industry standards.

Questar STR the next 2015 Dividend Machine

Questar, symbol STR, is new to my Dividend Machine universe.  Questar closed at $22.14 on Friday 7/31/2015.   I will use the closing price on Monday, 8/3/2015 as my Dividend Machine basis.  Earnings for this gas utility are $1.28 over the past four quarters with dividend payouts of $.84 for the same time frame.  Dividend yield is 3.85% and dividend growth has averaged 12.3% per year over the past five years.  Debt to Equity ratio is just above 1.   See the table below to review these statistics.

You should comb through your portfolio and review your holdings to determine if you would buy those stocks again now.   If not, consider if your best move is to buy more, sell, or hold.  Or maybe you could write calls on your appreciated stocks.   I will have more to say on the subject of massaging your portfolio but today, you might consider Questar, symbol STR, for the income producing portion of your portfolio.


Disclosure no position but may add within the next 72 hours.