Monday, November 30, 2015

Good news for Dividend Machine SE Spectra Energy

Spectra Energy - Strong Growth Ahead $SE, $SEP

Tuesday, November 24, 2015

LG 2014 Dividend Machine Rasies our Income again


If you want to know a lot of information about Laclede, symbol LG; here is where to find it.


Friday, November 20, 2015

QCOM another 2015 MoneyMadam's Dividend Machine

This post explores how Qualcomm, symbol, QCOM has evolved from an "almost Dividend Machine" to a 2015 Dividend Machine.

How many shares of Qualcomm, symbol QCOM, have passed through my hands?  The answer is many, many shares.   How many posts have I written about QCOM's potential as an income instrument?  More than a dozen posts.  But only recently has QCOM become more than an almost Dividend Machine and very good income investment to a bona fide Dividend Machine that will become my latest addition to the 2015 model portfolio.

QCOM has delivered a lot of income

Since I started writing about using dividend stocks and covered calls on those stocks, QCOM has garnered a lot of attention.  When I first wrote about QCOM the basis was about $53  During these past five years I have bought QCOM, sold calls, pocketed the dividends and call premiums and let my shares be assigned (called away) at very nice capital gains.  QCOM a 700 share history

QCOM is a bargain

During these five years QCOM has been volatile, hitting a high of around $82 in September of 2014 and a low of around $47 March of 2011.  

At no time during the past five years has QCOM qualified as a Dividend Machine simply because the yield was too low.   But now the steady dividend increases and precipitous decline of the stock price make this stock qualify as a 2015 Dividend Machine.  QCOM is flirting with five year lows as it trades around $49 today

QCOM Dividend Machine Fundamentals

As you know, for the purpose of this blog, I use only four criteria to select a stock for inclusion in my model portfolios.   Whenever a stock's price deteriorates to point where the dividend exceeds 3.5% which is the minimum I require for inclusion in the 2015 portfolio, you know there is some kind of trouble.  

A stock like QCOM responds to a myriad of outside factors.   China, competition for chips, new technology and on and on.    I wish I had the technical skills to siphon through all the externalities, but I do not and therefore, I depend on the four fundamentals that guide my dividend stock selection.

Qualcomm earned $3.20 per share over the past four quarters and paid out $1.92 in dividends.  I require a stock to pay more in EPS than in dividends and QCOM makes the grade easily.   Their current dividend of $.48 will be paid on December 18, 2015 provided you own the shares by November 27, 2015 the ex-dividend date.   The annualized yield is 3.9% which is well above the minimal criteria of 3.5% yield.  

Dividend growth is the third of four criteria and again QCOM beats my required dividend growth rate of at least a 4% annual dividend increase over the past five years.  QCOM's quarterly dividend 5 years ago was $.19 and their next payment will be $.48.   The dividend growth rate has been 30% per year on average which is very impressive.   Last of the four criteria is D/E ratio.   We don't want our stock to go out of business due to high leverage.  I like to see a stock with no more than a D/E ratio of 1 or within industry standard.   QCOM's D/E ratio is .341.  

QCOM's Dividend Machine Fundamentals are presented in the table below.

QCOM may not be the stock for you.  It could succumb to the negative externalities that have rendered the stock price under $50.   It could stop the robust dividend growth.  It could pile on debt.  However, I am going to take my chances on QCOM.    It has been a wonderful income investment for me and now it just may become a core holding.


Disclosure:  Long QCOM with calls on some of my shares.

Thursday, November 19, 2015

A little raise from Intel, INTC

Finally.   TheMoneyMadam

Wednesday, November 18, 2015

DBD an opportunit to dump it when pocketing extra income

Owning Diebold, symbol DBD,  is about as exciting as paint drying.    But today I got a nice surprise.  Someone took the last of my DBD.

I wrote up a post about DBD during the summer where I profiled several call options that could make DBD owner's some nice income.   You can find that link here:  .

The calls described above had expiration dates in August and they expired.  Last month on October 12, I sold $35 calls that were to expire this Friday, November 20, 2015.  The call premium I received was $.40 per contract.  I have owned my shares since October 2012, I have received regular quarterly dividends during that time with a yield on my basis of 3.89%.

I wanted to unload DBD because the dividend is no longer growing and recently their EPS has slipped below their dividend payout.  I sold calls that I thought had a good chance of being called away, also known as assigned. 

Indeed today someone took the last of my DBD.   The table below shows the gain from this transaction not including the dividend.

Today, DBD is trading above $36 so the call buyer also benefits as he/she bought today at $35 and could sell for an immediate gain of just over $1.00.   I prefer the trade I made.

While DBD qualified as a Dividend Machine in 2012 and I have to keep it in the model portfolio, I personally am happy that I was able to unload it while at the same time adding to income.


POT Income on weakness

Hard to believe I am doing this again with POT, Potash.   The calls are compelling when you add in the dividend.   Selling a January 15, 2016 call.  This call is out far enough that I should receive the dividend and the call premium.

Call premium is $.38 for a $23 strike price.   Combine it all together and if you stock is taken, your gain is over 17%.   If your shares are not taken and POT survives, your income over these next 58 days is 3.5%.  

See the table below.


Sunday, November 15, 2015

News on DRI

Shareholders at Darden Restaurants receive their REIT slice $DRI

Three of my model portfolios hold DRI and now FCPT (Four Corners Property Trust) the spin off referenced above.    2011, 2012 and 2013 portfolios have been updated to include the spin off and are presented below.