Portland Electric (POR) is my Dividend Machine for week of December 10, 2012

           

            My dividend project requires me to add the first company that qualifies as a dividend machine to my weekly list.   I do not search every day.    When I search for a dividend machine, I use several sources including TheStreet.com’s ex-dividend calendar; the Wall Street Journal’s dividend change feature, and sometimes I just run across a company through press releases or general news.   This week I started with TheStreet.com and found this company in the first group of stocks I researched.

 

            Portland Electric is an electric utility in the Northwest.  Today it traded around $27.28.  If you own it by December 21, 2012, you will receive the quarterly dividend of $.27 on January 15, 2012.  This is an annual dividend yield of 3.97%.

 

            Fundamentally, Portland Electric is a solid dividend machine.  POR’s earnings for the last four quarters were $1.87 and dividends paid out for the same period were $1.07.  Dividends have increased every year for six years.  Debt to equity ratio (D/E) is 1.01.  These data are presented in the table below.

 

	DIVIDEND MACHINE	12/12/2012
	Portland Electric	POR
	Price when profiled	$27.28
	Last 4 Qtrs Earnings	$1.87
	Last 4 Qtrs Dividends	$1.07
	Current Qtr Dividend	$0.27
	Annualized Div Yield	3.95%
	No. Years Div Increase	6
	Debt/Equity ratio	101.00%

           

            I never try to sell my dividend picks.   Remember the dividend machine project requires discipline and therefore specific rules.   I do not pick the best dividend machine each week; I profile the first one that complies with my rules.  With that said, I occasionally provide the fifth dimension which is my or another person's opinion in support or dissent.

 

            In support of POR is David Dreman.   Read his review from Seeking Alpha in this link.http://seekingalpha.com/article/1057481-5-value-dividend-stocks-for-investing-like-a-contrarian?source=msn

 

Consider POR for the income producing portion of your portfolio and fear not going over the “fiscal cliff.”

 

Very Truly Yours,

 

TheMoneyMadam

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Laclede Group Inc. dividend machine for Nov. 26, 2012

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Questar STR Dividend Machine for 11/8/2012 Are utilities still a good income investment?

English: Natural gas burning (Photo credit: Wikipedia)

Questar symbol STR Dividend Machine for week of November 5, 2012

           

            Questar is a gas utility that serves the Rocky Mountains and Questar is the first dividend machine I found today.   The most recent trade was $19.37 which makes STR a very affordable dividend machine for investors.  STR also fulfills the needs of investors who want an energy play that concentrates on gas.

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Magellan Midstream Partners, MMP dividend machine for week of October 29, 2012

Magellan Midstream Partners, MMP is the dividend machine for the week of October 29, 2012.

           

            Magellan Midstream Partners, MMP is the first dividend machine I found for this week, October 29, 2012 and I’ll tell you I sifted through no fewer than forty two companies before finding MMP.   

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McDonalds Company, MCD Dividend Machine for week of Oct 22, 2012

McDonalds,  when populations increase they eat more McDonalds - Dividend Machine for the week of October 22, 2012.

           

McDonalds, symbol MCD, has been on my radar many times in past decades.  However, once I started using my very specific dividend machine criteria, MCD did not show up as the first dividend machine I found with my screen until this week.   Like MSFT, McDonald’s price was too high or the dividend too low to qualify as a bona fide dividend machine.   Recently, McDonald’s qualified on every other dividend criteria except yield and now we have the dividend yield greater than 3%.

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Microsoft, MSFT took a long time to show up as a dividend machine!

Microsoft wordmark. (Photo credit: Wikipedia)

Microsoft, MSFT dividend machine for week of October 8, 2012

I have been searching for dividend yield for this blog (and my research project) every week for nearly two years and only today, did Microsoft show up.  In the past either their dividend was too low or their stock price too high to make the minimum dividend yield criteria.

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DIVIDEND MACHINE Week of October 1, 2012

Capitol, Washington DC (Photo credit: Wikipedia)

Dividend Machine for week of October 1, 2012 WGL Holdings Inc. (WGL)

           

What a fun day I had searching for this weeks’ dividend machine.  During my search, I cannot help but run across information on companies that I have already included in my 2012 dividend machine list.   I found some lovely news about last week’s dividend machine, Watsco symbol (WSO), see side bar of this blog called The Money Madam’s Musings.

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Dividend Income increases with MDU Resources

Dividend Machine for week of 9/3/2012 MDU Resources

This week’s dividend machine is MDU Resources.  MDU made the 2011 dividend machine list as well.  MDU Resources, symbol (MDU) is in the business of natural resource products and related services needed for energy and transportation infrastructure.   MDU is an industrial company; the kind of company that America is built upon.

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Can I find a dividend machine in the financial sector?

AUBN was the first dividend machine I came across in my pursuit of a dividend machine pick for this week.   Since I believe in disciplined investing, I have to stick to my plan of finding forty-eight dividend machines in 2012 and for profiling the first one, I find that week.  I do not market time, I do not screen by sector and I do not use market capitalization.  I only use my four key dividend machine criteria to find a dividend machine.

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Dividend Machine for week of 8/20/2012 CINF

The Ohio state seal. (Photo credit: Wikipedia)

            Catastrophes come and go but insurance companies seem to be able to weather most storms.  At least Cincinnati Financial symbol (CINF) has been around for a long, long time having weathered many storms. 

            Using my four dividend machine criteria (see the left hand column to review these criteria); you can see that CINF easily makes the grade.

            CINF is located in Ohio.  This well managed company has paid a dividend since 1954 and increased the dividend every year for the past

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TransCanada TCP Canada provides the dividend machine for August 13, 2012

English: C.D. Howe (NFB image) The Hon. C.D. Howe at the official ceremony at the border of Canada and United States of the joining of the pipeline from an oil tanker terminal, Portland, Maine with refineries in Montreal, P.Q. (Photo credit: Wikipedia)

TransCanada Corporation, symbol TCP, my 31st dividend machine pick of 2012.

           

            Few non-USA companies qualify as dividend machines.  My trepidation over selecting foreign companies as dividend machines is due to my mistrust of international accounting.  Other factors like currency exchange make investing in international companies even more complicated.  

Let me be clear about international companies; I do invest in them.  However, the duty of this blog is to find 48 dividend machines in 2012 and to offer covered call and interest income ideas.  

This week's dividend machine is number 31.  As I searched for a company that meets all four criteria, the first dividend machine I came across was a company from Canada.   Canada, our cousin country, has well established accounting rules and that allow me to feel more comfortable naming TransCanada Corporation (TCP) as this week’s dividend machine.

            Everybody has heard of the TransCanada Pipeline also known as the Keystone Pipeline.TCP is the company that would build that pipeline.   In 2000, the TransCanada energy company made some changes and now is a leader in oil and gas equipment and servicing.

            It matters not how you feel about the proposed pipeline, as income investors we care that the company wants to maximize our income and is committed to pay us increasing income over time.

            With that vision in mind, review the data in the following table (based on closing price Friday, August 10, 2012) to determine if TransCanada, TCP, is a dividend machine that you would like to include in the income producing portion of your investment portfolio.

TransCanada Corp. TCP
Price when profiled	$45.18
Last 4 Qtrs Earnings	$2.06
Last 4 Qtrs Dividend	$1.74
Current Dividend Yld	3.85%
No. of Years increased	8
Debt/Equity ratio	10.00%

Very Truly Yours,

TheMoneyMadam

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Dividend Machine for week of July 23, 2012 UVV

HAVANA - FEBRUARY 25: A Cuban tobacco worker prepares a cigar in the Cohiba tobacco factory on February 25, 2010, in Havana, Cuba. The Cohiba tobacco factory is preparing a new line of the Cohiba brand, Behike, to be presented during tomorrow�s gala dinner and closing auction ending the annual Habanos Tobacco Festival, that takes place in Cuba from Between February 22 to February 26. (Image credit: Getty Images via @daylife)

Dividend Machine for week of July 23, 2012 Universal Corporation (UVV)

           

            Get over it right now!  Universal Corporation sells tobacco and it makes a lot of money selling tobacco.  Universal (UVV) earned $3.25 per share during the last four quarters and paid out $1.94 in dividends.  

            UVV, trading at about $46.59 is near its high.  My dividend machine project does not use stock price to determine if a stock like UVV should be included in my 2012 dividend machines list.   Therefore, we should look at the four key criteria that define UVV as a dividend machine.

            Current quarterly dividend is $.49 per share.  At $46.59, the dividend yield is 4.2%.   UVV earned $3.25 during the last four quarters and paid out $1.94 in dividends.  This company, it appears to me will be able to continue to pay me income. In spite of efforts to reduce tobacco use, UVV has been able to grow earnings enough to fund dividend increases every year for fifty-eight years.  Their debt to equity ratio (D/E) is .45.

            You might consider UVV for the portion of your portfolio dedicated to income.

Very Truly Yours,

TheMoneyMadam

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General Mills GIS Dividend Machine - a contrarian play

A box of Cheerios breakfast cereal. (Photo credit: Wikipedia)

Contrarians can get yield too!

 

            Are you a contrarian?  I would not be surprised that an income investor like you would not really know what a contrarian is?   In stock market terms, it refers to someone who goes against the prevailing market direction. 

            Contrarians sometimes congregate around a particularly industry or sector.  Right now, everybody believes growth is dead.  The consumer is dead.  Why would you want to buy a company that sells goods to consumers?   Most consumer stocks are pretty stinky right now.   Contrarians like that kind of environment because if they are right and the consumer returns, (so far they always have) they buy these companies at a bargain.

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Boost your yield on CVX to over four percent this year!

Chevron (CVX) Dividend Machine for week of June 25, 2012

Chevron, symbol CVX, is a wonderful dividend machine.  Just look at the fundamentals presented below to see how CVX performs on our four key dividend machine criteria.  Earnings over the past four quarters have been a robust $13.62 per share; paid dividends were $3.30 per share.   At today’s stock price of about $98.90 the dividend yield is 3.64%.   CVX just raised the quarterly dividend from $.81 per share to $.90 per share.  CVX has raised the dividend every year for 19 years; moreover, this company performs like this with only a 3% D/E ratio.

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Southern Company, CO - Utilities, the mother's milk of income investments

Dividend Machine for week of June 11, 2012 Southern Company (SO)

           

            Utilities, which are the mother’s milk of income investments, have not shown up too often on my dividend machine screens and I think that is because the dividend investment strategy is a crowded one right now.    Everybody who invests for income is hungry for yield and they have driven up the cost of income instruments.   Bonds are the most expensive but dividend stock prices have also been affected by this trade.

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Even better than a typical dividend machine! NHI

Dividend Machine for week of June 4, 2012 National Health Investors, Inc. (NHI)

           

            I need to find a new term for a company like National Health Investors, (NHI.)  It is a cash cow and a good fit for investors searching for dividend yield.

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Dividend Machine for week of May 21, 2012 GPC

Dividend Machine for week of May 21, 2012 Genuine Parts Company (GPC)

       

           I just love to visit a company’s website, click on the investor section, and find “Dividends” as my first option.  Research drives all investor decisions.   Four very important company fundamental measurements guide my research.  Since we are income investors, the dividend information is very important.   I verify the information I get from public websites by going to the company’s official website.   Dividends, being our source of income, are important to verify and I was very impressed with GPC’s dividend history.

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Dividend Machine for week of May 14, 2012 Meredith Corporation, MDP

LA Times (Photo credit: Wikipedia)

Dividend Machine for week of May 14, 2012 Meredith Corporation

          

             Most good income dividend stocks were down today.

            Are you nervous yet?  If so, you are not alone.  Dividend investors were killed on Thursday, 5/17.   Why did income investors suffer so grievously yesterday?  We suffered because the industrial companies are expected to suffer when the world’s economy slows.   We buy earnings and industrials create earnings so if earnings are down so goes their stock price.

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Dividend Machine for week of May 7, 2012 Cullen & Frost Bankers (CFR)

Even veterans like me can be surprised to find a banking company that qualifies as a dividend machine.

            With the entire world in financial turmoil, I find it hard to believe that a company whose business is described as being “bankers” would qualify as a dividend machine.  

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Can you believe little companies can be dividend machines?

ZX81 PCB (Photo credit: barnoid)

Dividend Machine for week of April 30, 2012 Communications Systems Inc. (JCS)

          

            I am not afraid to profile a very small company in view of our experience with the 2011 dividend machines.  The smaller cap companies are outperforming the big caps.  Just take a look at my Dividend Machines page and you can see this for yourself.

            Communications Systems, Inc. which trades under the symbol JCS is an excellent dividend producer.  I particularly like the 4.7% yield at today’s price of about $12.91.  Moreover, at this price even the investor with limited funds can join in on the advantages of investing in dividends.

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