8/22/2014

How to Retire At The Age Of 40 With Dividends - 10 Helpful Investing Tips From "All About Interest"

I'm passionate about dividends and share my thoughts about stocks on my blog but there are also many other bloggers with good ideas.

Most of them share their personal journey to financial freedom on the internet and educate people how they grow their passive income with dividend stocks. Their plan: Retire at the age of 40.

I love those stories and the hard work they do. I'm also a guy who worked hard for his success. That's the reason why I want to support them and like to distribute their thoughts to a wider audience.


I share fresh articles from them on my Twitter and Facebook account. If you like you can join the conversation there. It’s always great.

Today I'd like to interview a great Blogger who has a nice dividend investing space on the internet, a site calling All About Interest.

Tom: AA Interest, you are a dividend investor and publishing your journey to a financial independence at the age of 40 on the web. On your blog, you show people your asset structure with a net worth of $725,000. What are your main growth drivers for your financial freedom goal?


AA Interest: My main growth driver is my savings each month that I plow back into investments that offer passive income streams. These passive income streams are real estate (rental properties) and dividend growth stocks. 

This passive income is then added to my savings the following month and put right back to work for me, causing a compounding, or snowball effect. 

Tom: Out there are so many people who have the dream to retiree with a high passive dividend income stream. Can you give them three important tips to follow in order to achieve this aim?

AA Interest: My advice is simple:

1.) Start investing as soon as possible
2.) Save as much as you can each month
3.) Research your investments

These are the three biggest factors that will produce your desired retirement amounts: time, money and rate of return.  You need to know the time you have available for compounding to work its magic.  You need to know the amount of money you have available to invest.  You also need to do your research so you have a good return on your investments.
 
Tom: Back to stock market financials. What are the best places to be when you think about putting money into stocks now; can you tell us something about your recent trades or your current ideas.




AA Interest: Whether the market is in a bull or bear cycle, I believe there are always companies that offer a fair value or better. Currently, I have a large portion of my portfolio in the energy sector.  

I'm invested in big names like Chevron, Conoco Phillips, British Petroleum and Kinder Morgan to name a few. From a p/e standpoint, a lot of these energy companies offer some of the best values in the market.

They also happen to pay a generous and growing dividend, usually in excess of 3.5%. 

I'm also a fan of companies that generate large amounts of free cash flow and have little or no debt. A company like this that I've recently been investing in is Visa.  

I also look for short-term, negative catalysts that can suppress a stock's price. One such company I've been investing in lately is Target.

Shares are trailing the S&P significantly since the credit card breach and lackluster Canadian results.

However, Target is a dividend champion, having increased their dividend consecutively for over 47 years! I'm a fan of the company long-term and believe shares currently offer a good value. 

Tom: Final Question: You’ve published a long Watchlist on your Blog. What are your main criteria to consider a buy? Do you look at P/E multiples, high yields or other ratios?

AA Interest: I actually laid out a Business Plan so that I could monitor my stock purchasing like running an actual business. As outlined in this plan, my main criteria to buy are:

1.) At least 90% of all stocks chosen should be in the CCC list, that is the Champions, Contenders and Challengers list maintained by David Fish.  This list can be found on my Resources tab.
2.) Small-Cap or larger ( >250 million market cap).
3.) 10-year YOC should be 10% or higher (typically using 5-year CAGR).
4.) Minimum yield of 2.5% (exception can be made as long as target total portfolio yield holds).
5.) Dividend growth over last 5 years (5-year CAGR) must be over 4%.
6.) Large moat or competitive advantages.
7.) Sound fundamentals.

These are the basic rules that I follow. Some of these rules leave flexibility and some room for being subjective.  

For instance, Visa doesn't meet rule number 4. However, since my portfolio average yield is well above 3.5%, I made an exception.

In a nutshell, I'm looking for companies that pay and raise dividends at a rate higher than inflation, have a large barrier to entry and are fundamentally sound. This is why I consider myself a dividend growth investor.

Tom: Thank you for your great interview. If you like to follow AA Interest, please visit his Blog at http://www.allaboutinterest.com.

If you also like to be interviewed or release a guest article, please contact us.

9 Of The Cheapest Large Cap Dividend Stocks The Market Has To Offer (GM, MET, AFL)

Today I screened the market by large cap bargains. Those stocks have a market cap over USD 10 billion as well as a future P/E ratio of less than 10.

I know how hard it is to find real investment opportunities. I personally bought some insurance stocks in the past because those are relatively cheap valuated and they offer a little upside with rising interest rates, despite the fact that they also could get hurt due the their huge fixed income portfolio.

Within the dividend growth community, some traders have announced that they have put Deere stocks into their portfolio. I also own stocks of Deere because its one of the leading companies within the farm and soft commodity space.

Below are five dividend ideas with single-digit forward P/E ratios and positive earnings growth for the next five years while debt ratios are acceptable. 

These are the criteria in detail:

- Forward P/E under 10
- 5Y future earnings growth positive
- Large Caps
- Dividends positive
- Long-term debt-to-equity under 1

The selection is not huge. Attached is also a list with all details from the screen. Nine stocks are in focus of the screen.

5 Cheaply Valueated Dividend Stocks...

8/20/2014

41 UK Dividend Growth Kings You Must Know

Recently, I stumbled on Twitter and found an interesting tweet about a UK stock that has hiked currently its dividend. 

As you might know, I love stocks that increase dividends, not because I'm an event driven investor, but because I love it to see that the company has a good running operational business and wants to share its success with their shareholders.

The tweet came from a Guy named @UKDividendKings. I check out his site and saw his impressing work. He compiled all stocks from the FTSE 350 with more than 10 consecutive years of dividend growth in a list. 


These are his detailed criteria:

- FTSE 350 member (excluding Trusts)
- £1bn+ market cap
- Minimum of 10 years consecutive, unbroken dividend raises – no cuts, no holding static


41 UK-Dividend Kings

UK Dividend Kings (Click to Enlarge);
Source: http://ukdividendkings.com/list

For sure, I never thought that there were so many companies with a long history of consecutive dividend growth. I knew that the American market offers around 500 or a few companies but 41 in the UK?


Well, back to the list, I love the overview with dividend cover ratio and picked a few companies that I personally like or I often hear from. 


Tesco is not on the list but pays one of the highest yields but the market rumors that Tesco will cut future dividends. There are also rumours about Vodafone's dividend safeness. 

The list shows a dividend cover ratio of 1.59.

Stocks are not cheap


Everybody tells it and it's somehow true: stocks aren't cheap for the moment. With P/E's above 20 or more, the market is definitely highly valuated.

My favorite UK-Dividend Kings are... 

Vodafone Group (NASDAQ:VOD) has a market capitalization of $89.62 billion. The company employs 92,812 people, generates revenue of $63.711 billion and has a net income of $18.794 billion. Vodafone Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $18.477 billion. The EBITDA margin is 29.00 percent (the operating margin is -10.20 percent and the net profit margin 29.50 percent).

Financial Analysis: The total debt represents 20.82 percent of Vodafone Group’s assets and the total debt in relation to the equity amounts to 35.82 percent. Due to the financial situation, a return on equity of 15.67 percent was realized by Vodafone Group. Twelve trailing months earnings per share reached a value of $6.98. Last fiscal year, Vodafone Group paid $2.32 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 4.78, the P/S ratio is 1.41 and the P/B ratio is finally 0.75. The dividend yield amounts to 7.00 percent and the beta ratio has a value of 0.79.

Long-Term Stock Price Chart Of Vodafone Group (VOD)
Long-Term Dividend Payment History of Vodafone Group (VOD)
Long-Term Dividend Yield History of Vodafone Group (VOD)

GlaxoSmithKline (NYSE:GSK) has a market capitalization of $114.57 billion. The company employs 99,817 people, generates revenue of $44.037 billion and has a net income of $9.350 billion. GlaxoSmithKline’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15.174 billion. The EBITDA margin is 34.46 percent (the operating margin is 27.58 percent and the net profit margin 21.23 percent).

Financial Analysis: The total debt represents 43.35 percent of GlaxoSmithKline’s assets and the total debt in relation to the equity amounts to 260.75 percent. Due to the financial situation, a return on equity of 84.96 percent was realized by GlaxoSmithKline. Twelve trailing months earnings per share reached a value of $3.23. Last fiscal year, GlaxoSmithKline paid $2.59 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.80, the P/S ratio is 2.60 and the P/B ratio is finally 9.89. The dividend yield amounts to 5.60 percent and the beta ratio has a value of 0.59.

Long-Term Stock Price Chart Of GlaxoSmithKline (GSK)
Long-Term Dividend Payment History of GlaxoSmithKline (GSK)
Long-Term Dividend Yield History of GlaxoSmithKline (GSK)

British American Tobacco (NYSEMKT:BTI) has a market capitalization of $111.66 billion. The company employs 87,485 people, generates revenue of $25.354 billion and has a net income of $6.976 billion. British American Tobacco’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $10.339 billion. The EBITDA margin is 40.78 percent (the operating margin is 36.21 percent and the net profit margin 27.52 percent).

Financial Analysis: The total debt represents 43.51 percent of British American Tobacco’s assets and the total debt in relation to the equity amounts to 176.30 percent. Due to the financial situation, a return on equity of 55.35 percent was realized by British American Tobacco. Twelve trailing months earnings per share reached a value of $6.80. Last fiscal year, British American Tobacco paid $8.72 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.18, the P/S ratio is 4.40 and the P/B ratio is finally 10.21. The dividend yield amounts to 4.11 percent and the beta ratio has a value of 0.74.

Long-Term Stock Price Chart Of British American Tobacco (BTI)
Long-Term Dividend Payment History of British American Tobacco (BTI)
Long-Term Dividend Yield History of British American Tobacco (BTI)

If you would like to receive more dividend stock ideas, you should subscribe to my free e-mail list. Alternatively, you can follow me on Facebook or Twitter.

Diageo (LON:DGE) has a market capitalization of $44.00 billion. The company employs 26,588 people, generates revenue of $10.258 billion and has a net income of $2.264 billion. Diageo’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.738 billion. The EBITDA margin is 36.44 percent (the operating margin is 26.39 percent and the net profit margin 22.07 percent).

Financial Analysis: The total debt represents 40.12 percent of Diageo’s assets and the total debt in relation to the equity amounts to 135.04 percent. Due to the financial situation, a return on equity of 33.64 percent was realized by Diageo. Twelve trailing months earnings per share reached a value of $0.93. Last fiscal year, Diageo paid $0.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.88, the P/S ratio is 4.33 and the P/B ratio is finally 6.50. The dividend yield amounts to 2.93 percent and the beta ratio has a value of 0.61.

Long-Term Stock Price Chart Of Diageo (DGE)
Long-Term Dividend Payment History of Diageo (DGE)
Long-Term Dividend Yield History of Diageo (DGE)

Sage Group (LON:SGE) has a market capitalization of $4.30 billion. The company employs 13,242 people, generates revenue of $1.376 billion and has a net income of $47.50 million. Sage Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $406.10 million. The EBITDA margin is 29.51 percent (the operating margin is 13.12 percent and the net profit margin 3.45 percent).

Financial Analysis: The total debt represents 24.92 percent of Sage Group’s assets and the total debt in relation to the equity amounts to 62.64 percent. Due to the financial situation, a return on equity of 4.13 percent was realized by Sage Group. Twelve trailing months earnings per share reached a value of $0.21. Last fiscal year, Sage Group paid $0.11 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.06, the P/S ratio is 3.13 and the P/B ratio is finally 5.08. The dividend yield amounts to 2.91 percent and the beta ratio has a value of 0.87.

Long-Term Stock Price Chart Of Sage Group (SGE)
Long-Term Dividend Payment History of Sage Group (SGE)
Long-Term Dividend Yield History of Sage Group (SGE)

Smith & Nephew (NYSE:SNN) has a market capitalization of $15.55 billion. The company employs 11,036 people, generates revenue of $4.351 billion and has a net income of $556.00 million. Smith & Nephew’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.323 billion. The EBITDA margin is 30.41 percent (the operating margin is 18.62 percent and the net profit margin 12.78 percent).

Financial Analysis: The total debt represents 6.72 percent of Smith & Nephew’s assets and the total debt in relation to the equity amounts to 9.66 percent. Due to the financial situation, a return on equity of 14.02 percent was realized by Smith & Nephew. Twelve trailing months earnings per share reached a value of $3.12. Last fiscal year, Smith & Nephew paid $1.37 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.90, the P/S ratio is 3.57 and the P/B ratio is finally 3.83. The dividend yield amounts to 1.58 percent and the beta ratio has a value of 0.87.

Long-Term Stock Price Chart Of Smith & Nephew (SNN)
Long-Term Dividend Payment History of Smith & Nephew (SNN)
Long-Term Dividend Yield History of Smith & Nephew (SNN)

Associated British Foods (LON:ABF) has a market capitalization of $22.37 billion. The company employs 112,652 people, generates revenue of $13.315 billion and has a net income of $628.00 million. Associated British Foods earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.610 billion. The EBITDA margin is 12.09 percent (the operating margin is 8.17 percent and the net profit margin 4.72 percent).

Financial Analysis: The total debt represents 11.24 percent of Associated British Foods assets and the total debt in relation to the equity amounts to 18.94 percent. Due to the financial situation, a return on equity of 9.76 percent was realized by Associated British Foods. Twelve trailing months earnings per share reached a value of $0.79. Last fiscal year, Associated British Foods paid $0.32 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 35.95, the P/S ratio is 1.72 and the P/B ratio is finally 3.72. The dividend yield amounts to 1.12 percent and the beta ratio has a value of 0.63.

Long-Term Stock Price Chart Of Associated British Foods (ABF)
Long-Term Dividend Payment History of Associated British Foods (ABF)
Long-Term Dividend Yield History of Associated British Foods (ABF)

Do you like this article? If yes, please support us and hit the button for a Facebook Like, make a tweet or post a comment in the Dividend Yield community! Thank you so much, we really appreciate it.

-------

*I am long GSK, BTI, DGE, SNN. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

8/18/2014

Warren Buffett Buys Surprisingly These 8 Dividend Stocks (WMT, GM, IBM, VZ ...)

Warren Buffett is one of the most trusted investors in the world. Recently, he came out with his 13F Filling which informs about the recent investment activity.

I studied Warren's latest buys and sells. My thoughts are clear: He invest into calbe and telecom stocks. Below is a small overview of his latest purchases. In addition, I've implemented a detailed view on his latest dividend buys for you.

In total, Warren bought 13 stocks of which eight pay dividends. The highest yielding company was the telcom company Verizon followed by the car maker General Motors.

His total portfolio value hit the USD 107 billion benchmark and around 65 percent of his assets are invested into four companies (Wells Fargo, Coca Cola, American Express and IBM as well).

45 percent of his assets have a relationship to the financial sector. Insurance stocks have made him rich in the past but I think those shares were only a strong cash source for further investments. 

Buffett is a great investors with a fantastic sense for good investments but everybody should develop his own investment style.

8/16/2014

4 Hot Dividend Growing Incurance Stocks You Must Know (ACE, AFL, TRV, UNH)

During the past week I've visited my girlfriend and came back home with some ideas about investing. 

Earlier this year, I've noticed that insurance stocks are great cash flow producer and some of them have a really low dividend payout ratio. They invest a huge amount of money to buy back own shares and they are really cheap valuated.

Warren Buffet likes insurer but he prefers today stocks from the cable business. I also see that those companies have a very attractive Price-to-Ebitda ratio.

However, I bought two German insurers last Friday. They yield over 3 percent and I like to increase my positions over the next time if they become cheaper.

The American stock market also has great insurer to look at. Aflac and Travelers are my two favorites followed by Chubb Corp. Those are also long-term dividend grower and part of David Fish's CCC List.

Below I've highlighted a few large cap insurer from the accident & health insurance industry as well as stocks from the property & casualty insurance industry. In addition, I've added large caps from the health care plans industry. From there came only one stock, the United Health Group.

All of the selected stocks have raised dividends by more than five consecutive years. Just dare a glace at my thoughts. I know that those stocks are not very popular but they are very attractive in terms of price for cash.

If you like to receive the Dividend Weekly for free (weekly published E-Book with around 1,000 best dividend paying stocks), please enter your email and verify your adress. Easily unsubscribe at any time.