Tuesday, August 28, 2012

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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Thursday, August 23, 2012

Dividend Machine for week of 8/20/2012 CINF

The Ohio state seal.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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Monday, August 20, 2012

Was options expriation weekend a good one for you?

          I love the first Monday after options expiration.   I have either make a lot of capital gains or I am presented with the opportunity to sell more calls on those dividend paying stocks. I retreat to "the counting house" and look at how I have done.  Two examples are presented below.
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Thursday, August 16, 2012

Trade bonds? Is this a good idea?

If you are reading this post, thinking you want to make money trading bonds, you probably should read another blog.    This blog is for income investors.  However, trading bonds can be a part of income strategy; if you never pay more for a bond than it will return to you at maturity; you can make money trading bonds and earn the interest while you wait.
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Tuesday, August 14, 2012

Import Dividend Data

Recently I was reviewing the 2011 dividend machines list with a friend of Alfred Ferol.  We discussed my dividend machine project and he seemed to understand that the number one objective of investing your money in dividend machines was income.  I was surprised, therefore, when he reviewed the portfolio data that input into Yahoo Finance, the first thing he spotted was a company with a big gain.

Eventually we got around to zeroing in on actual income earned.  That is when I realized no software exists to import dividends, actual dollars deposited into your account, software that can then add up the total. I have to do that manually.

Measuring dividend income is easy for the ordinary income investors; all you have to do is look at the “dividend income line” on your brokerage statements and add it up.  

However, when dealing with a theoretical portfolio like my 2011 and 2012 dividend machines, I need to know if the income these stocks generate is greater than I could get from a 10-year U.S. treasury and if that income has increased.   No software I know of can do that with data being imported instead of manually entered.

Using the Yahoo’s Finance Portfolio I can track a lot of stuff from their data downloads.  I know the gain on the 2011 portfolio as of 8/13/2012 was over 15% and I can follow it anytime.  However,  I have to add up the dividend income manually.   Then I have to keep track of that history in order to measure the rate of rise of income.

You income investors are smart.  Let me know if you know of software that could help us all keep track of our dividend income.

Very Truly Yours,

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Sunday, August 12, 2012

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

English: C.D. Howe (NFB image) The Hon. C.D. H...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
Last 4 Qtrs Earnings
Last 4 Qtrs Dividend
Current Dividend Yld
No. of Years increased
Debt/Equity ratio

Very Truly Yours,

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