Look at these model portfolios and tell me what you think.  

I think they reveal that you can pick stocks using a strict formula or you can invest in a quality ETF and get close to the same results.

But what it really tells me is that you should start as soon as you can.

Consistent investing over time; persistence, duration,  these are the qualities of a well developed income investment portfolio.

Notice that none of these portfolios include reinvesting dividends, or investing the cash created from buy outs or additional income created from covered calls.   

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Last 2014 Dividend Machine

This article is about two stocks I am evaluating as potential Dividend Machines for 2014. Both are worthy of consideration.  By the way, this will probably be the last DM (Dividend Machines) I name for 2014 which will bring the number of 2014 Dividend Machines to seventeen.  

Everyone should take a break from “work” and take a serious look at their portfolio.   I will be doing this over the next month or so.   Last minute portfolio moves are a consideration.   For instance, will you fund your favorite charity with IRA money if the Senate extends that tax rule?  Have you measured the true income you get from your investments?   The end of the year is a good time for portfolio reflection

Two stock to consider adding in 2014 are profiled below.

Maiden Holdings symbol MHLD

FerdiS wrote an article on Seeking Alpha about 2014 dividend increases. http://seekingalpha.com/article/2735515-dividend-increases-november-2014#comment-44464005. I read these kinds of articles but rarely do I find a stock that just might be a Dividend Machine and that has not shown up on my radar.   But FerdiS got it done.   

One of the stocks he/she (I do not know this person) listed is Maiden Holdings, symbol MHLD.   Maiden is a reinsurer that serves the global market.  MHLD has paid dividends since 2008.  It is a small cap stock.

As you know I use only four criteria to screen for Dividend Machines and MHLD’s data are presented in the table below.

 

Source:  Price, Earnings, Dividends Nasdaq.  Source: D/E ratio MSN 

Laclede, symbol LG

The other stock I am considering is Laclede, symbol LG.  The label LG implies an appliance company but the stock symbol LG refers to a gas company.    This is not the first time that Laclede, symbol LG, qualified as a Dividend Machine.   November 2012, LG was added to the 2012 Dividend Machine portfolio.  http://www.themoneymadam.com/2012/11/laclede-group-inc-dividend-machine-for.html.

I hinted at Laclede as my next 2014 Dividend Machine on November 30 and I wish I had added it to the portfolio then because today it is 4% higher than it was when I hinted at including it in the portfolio.    Like all investors, I have a lot of excuses as to why I did not pull the trigger that day.

Today, both LG and MHLD remain Dividend Machine candidates and they will be my last picks of 2014.   The portfolio will be closed.   No stocks will be bought or sold.   Dividends will not be reinvested.   I will follow this portfolio and report on its performance over time. 

LG’s Dividend Machine fundamentals are presented below.

TheMoneyMadam

November 30, 2014 LG Hint

 

Disclosure:   Long LEG no position MHLD

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VIG and SDY Beat 2014 Dividend Machines but not 2013 Dividend Machines

Live by the dividend; die by the dividend.   While the 2014 Dividend Machine Portfolio delivers more income for income investors, the recent slide of oil prices took a toll on energy stocks Chevron, symbol CVX, and Conoco Phillips,symbol COP.    See the comparisons in the table below of year to date performance of two low cost ETF's that concentrate on dividends; VIG and SDY.






I personally would not sell.   If you have cash to invest, you might consider adding to CVX and/or COP.    COP  has a PE of only 9.   Both have healthy dividend yields.  CVX's dividend yield 3.72% with a five year dividend growth rate of 11.47% .  COP's dividend yield is 4.12% with a 5 year dividend growth rate of 9.2%.    Both have good balance sheets.   Chevron's D/E ratio is .13 according to MSN Money and COP's is .35.

You see the biggest question is will these dividends continue and will their annual increases continue.  If the past five years is any indicator of future performance, CVX and COP are bargains.

Using Dividend Machine criteria to pick stocks for the income producing portion of your portfolio is still a good strategy.   This is demonstrated by looking at the 2013 Dividend Machine Portfolio.  Stocks have been on a tear lately and it is not surprising that buying in 2013 provides more gain than buying in 2014.   Take a look at the 2013 Dividend Machine portfolio comparison with VIG and SDY in 2013.

  

TheMoneyMadam

 

Related articles

 
• For Bargain Hunters, ConocoPhillips May Be a Diamond in the Rough Oil Patch
• Are Oil Analysts Getting Too Pessimistic With Lower Oil Prices?
• Dividend Machine CVX

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