Tuesday, September 1, 2015

Deep Discount Dividend Machines

I don't like the trading today.   Who did?  I could find a few Dividend Machines on sale but the discounts were not deep enough.  I could not find a good dividend stock with great calls.  When stocks are on sale, I have to use some of my cash to create income.  I am looking for more rather than less.   That is what a sale is all about. 

Dividend Machines at a deep discount

Never saw a Dividend Machine on sale that I didn't want to buy but I am looking for a real bargain.   CVX at $69 would be an example.   INTC at $25 is another.  ETN at $49 would be quite a buy.  UPS at $89 would be a Dividend Machine.   

The point is these are all great stocks.   I own them all except UPS.   Any any investor building an income portfolio would do well to initiate a position in any of these stocks.   These are all on sale but not at the discounts I want.

I don't hover over my computer monitoring stock prices very often.  However, like any good shopper, you have to pay attention when the sales are on.  During these periods, like now, where good deals are available you have to think out side the box.   Over the next few weeks, and I do think this volatility will last at least a few weeks, I will look at my current positions to see what to add.

AT&T - Telephone 

Telephone, symbol T,  breaks my Dividend Machine rules due to earnings less than dividends but with their adding Direct TV revenues, earnings should exceed dividends soon.  In my mind, their dividend is not in jeopardy.  Moreover, the dividend should begin to increase once earnings also increase.    Will this come to be?  Covered calls are not encouraging.   When traders think a stock is going to go up for any number of reasons, they are willing to pay high premiums to get in cheap and this is not the case with Telephone.  Yet I think Telephone will continue to pay a very rich 5.6% dividend yield.

Telephone at $29 !!!!  


Disclosure:  Long T, CVX, INTC, ETN