Showing posts with label ITW. Show all posts
Showing posts with label ITW. Show all posts

Sunday, August 14, 2016

Really nice dividend increase ITW

Illinois Tool Works declares $0.65 dividend $ITW
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Monday, June 27, 2016


Ten stocks from 2011 with the most dividend growth are the subject of this post.

I added each of these stocks to my 2011 Model Portfolio during the period November 2010 through November 2011.  When I picked these stocks they had a minimal yield of 3%, a D/E ratio no greater than 1 or within industry standards, earnings exceeded dividends in their most recent quarter and dividends had increased over time.  The portfolio was built to deliver solid, ever increasing income in a buy and hold strategy.

I picked 52 stocks during that time, about one per week.  In this post I look at the ten stocks with the most dividend growth.  
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Monday, September 12, 2011

ITW Dividend Machine with Call Option Income

          Earlier today I profiled ITW as a dividend machine.  I want to share with you another income opportunity on ITW and that is to sell calls against ITW.  Here are the facts:  you can buy ITW today at about $41.25, you will receive a dividend of $.36 on October 12, 2011; you can sell a December $45 call against your holdings and you immediately receive a call premium of about $1.75.
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DIVIDEND MACHINE for September 12, 2011 ITW Illinois Tool Works

NEW YORK - JULY 30:  A financial professional ...Image by Getty Images via @daylife

            Income investors must take advantage of poor markets; these are opportunities to search for deals.  ITW, Illinois Tool Works has been a company I have wanted to own.  My reasons for not buying ITW already are many, including already owning a bunch of industrial companies, and the dividend yield was a touch too weak for me in the past.

            Times have changed for me and perhaps for you too.  Earlier this year when the markets were up, I wrote calls on the industrials and the call  buyers took my stock.   I always make at least 10% on the gain from a call being taken, so I was happy to lose them.  Now I am a little short on industrials.  Since over time, industrials have provided nice dividend income that goes up during bad times and they share extra profit with us during boom times we always want to have a healthy allocation of industrials.  With the recent market swoon, I finally find an opportunity to add ITW to my income portfolio.

            ITW’s dividend fundamentals are solid.  Earnings are $3.85 per share per year, dividends were just increased again as they have been for at least five years.  ITW’s annual dividend is now $1.44 per share per year.  If you own ITW by September 30, 2011, you will receive the recently enhanced quarterly dividend of $.36 per share on October 12, 2011.  The dividend yield is 3.39% based on the closing price of $42.51 on Friday, September 9, 2011.  

            ITW has been in business for around one hundred years and is composed of 840 small businesses.  They have a very solid balance sheet as measured by D/E ratio, which is .39.

            If you have money to invest and want to buy a diversified industrial with a dividend yield that is well above what you can get from a corporate bond and with a dividend yield that has increased every year for at least five years, ITW is for you … and me!

Very Truly Yours,
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