#DividendInvesting
#dividends #yield
With interest rates depressed and likely to remain so for years, stocks with ample and secure dividends could benefit as investors search for yield.
One approach is to consider companies whose dividend yields nicely exceed their bond yields
#dividends #yield
With interest rates depressed and likely to remain so for years, stocks with ample and secure dividends could benefit as investors search for yield.
One approach is to consider companies whose dividend yields nicely exceed their bond yields
This can be a good way to find high-quality stocks because low bond yields are often a sign of financial strength & dividend stability
The stock of any company whose safe dividend yield is materially higher than its own 10 year bond yield may have a compelling risk/reward profile
The stock of any company whose safe dividend yield is materially higher than its own 10 year bond yield may have a compelling risk/reward profile
The approach doesn’t predict that a stock will outperform, but it has been very effective at identifying stocks with limited risk
Let’s take an example Johnson & Johnson (JNJ), whose dividend yield of 2.7% is more than double the about 1% on its 10-year debt.
Let’s take an example Johnson & Johnson (JNJ), whose dividend yield of 2.7% is more than double the about 1% on its 10-year debt.
The wide gap indicates that investors are pessimistic about future dividend increases at J&J, despite a payout boost of 6% this year and bumps up at an annualized rate of 6% over the past five years.
Also investors have been encouraged about #BerkshireHathaway stock buyback activity. It repurchased $5.1 billion in the second quarter, more than in all of 2019.
Buybacks remained strong in July, at an estimated $2 billion-plus, based on Berkshire’s 10-Q filing
Buybacks remained strong in July, at an estimated $2 billion-plus, based on Berkshire’s 10-Q filing
Some investors are speculating that once Warren Buffett & Charlie Munger are not at helm ( both are 90 plus age). Probably some activist Investors will take position and demand dividends and also return the capital. Quiet possible by today’s standards.
#ITC
Data shows that while the ITC’s profitability has improved over the past five years, with PBDIT margin rising from 29% in FY15 to 41% in FY19, the return on capital employed declined from 48 % to 33 % and return on net worth depreciated from 30 % to 23% during the period
Data shows that while the ITC’s profitability has improved over the past five years, with PBDIT margin rising from 29% in FY15 to 41% in FY19, the return on capital employed declined from 48 % to 33 % and return on net worth depreciated from 30 % to 23% during the period
The company’s dividend pay-out ratio too weakened from 69 % to 46 % . At a dividend yield of 5 % , the risk/reward ratio is comfortable and downside risks are minimal. But the chances of outperformance remains questionable.
Credits
#AndrewBary at barrons.com
#davidking at Columbia Flexible Capital Income fund
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#AndrewBary at barrons.com
#davidking at Columbia Flexible Capital Income fund
@threadreaderapp
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