CenturyLink a Dividend Aristocrat Analysis

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CenturyLink (CTL) is another one of the Dividend Aristocrats that we have in our business world.  They have consistently paid dividends for over 35 years straight and they are in the Telecommunications industry.  I am a huge follower of dividend aristocrats and I am excited to see some financials this company has to offer.



Price to Earnings Ratio or P/E: CTL closed today at $40.35.  They have earnings per share in the amount of $3.13.  Therefore, 40.35/3.13 = 12.89 P/E Ratio.  Relatively lower than the overall S&P 500, showing a possible undervaluation.  I then went to my usual Morning Star source to see how they compare with their industry as a whole, as they go up against other phone and internet providers such as AT&T.  It turns out the industry average is roughly 15.9; thus Century Link is undervalued compared to it's competitors.  Let check out some appreciation.

CenturyLink's 52 week high, as of today, is $46.87.  From solely this figure, they could have $6.52 of room to grow or a little over 16%.  Therefore, there is some room to grow, but that isn't what we are really here for.  I mean of course we want a company that has growth, but we need some cash flow.  Lets go see their yield.

Dividend Yield & Payout: They pay a quarterly dividend of $0.725 per common share.  Over four quarters this amounts to $2.90 annually per common share of stock.  Therefore, CenturyLink's dividend yield is an enormous ($2.90/$40.35) 7.18%.  Wow!  An over 7 percent dividend yield to their investors, this is double the amount of 10 year treasury interest yields and of course much higher than the stock market as an average.  Well, I have done some history on them, and a few years ago (2007) that $2.90 used to only be $0.26.  That's right, only 26 cents per share PER YEAR.  They would only raise it a smidge every year.  However, after 2007 they skyrocketed their dividend.
Century Link's payout ratio is 2.90/3.13 = 92.6%.  This is pretty high.  It isn't uncommon to have a high payout ratio for telecommunication companies, but I don't really enjoy the looks of an over 90% payout ratio.

Conclusion:  Though CenturyLink is an aristocrat, there are a few flags that stand out.  That dividend payout is extremely high.  How long can they sustain such a high rate?  Do they have the earnings to grow the company further?  With only a 12B market cap and with competitors that are humungous, where do they go?  Their dividend yield is extremely attractive and you do also have to give a nod to the fact they have raised dividends for over 35 years straight, and not many can fall into this category.   Also to note - their current ratio (current assets dividend by current liabilities) is barely 1.  I like to see at least 2, to show their solvency.  One would have to consult, without a doubt, a further analysis on CenturyLink before deciding to take any action.

-Lanny B.

Disclosure: I do not recommend anything, please consult your own research. This is actual data, analysis, however I base no investor recommendation.  Thank you for your understanding.

Picture Location: http://www.chambermaster.com/directory/jsp/events/EventPage.jsp?ccid=322&eventid=3361

McDonald's Corporation Stock Analysis (Member of Dividend Aristocrat List)

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McDonald's Corporation (MCD) is a proud and long-term member of the Dividend Aristocrat list.  As we all know, they are a giant in the food industry and do an extremely large amount of business inside and outside our United borders.  During economic turmoil, people that want a cheap/quick meal head to the good old golden arches and munch on Dollar Menu items.  Their growth is still there as they explore further emerging market strategies.  Let's get to the analysis..


P/E Ratio: McDonald's current share price is $76.03 with an earnings per share of $4.58.  P/E breaks down to (76.03/4.58) 16.6.  Not incredible higher than the "15" that I like, it does fit in my range.  MorningStar places it against other in their industry with an average of 22.1.  Extremely undervalued when you compare it to it's top competitors.  Very attractive to an investor.

Potential Appreciation: McD's 52 week high stands at $80.94.  This currently gives it a ((80.94-76.03)/76.03) 6.5% appreciation upside based on the past history.  However, I wouldn't add MCD for appreciation to my portfolio.  I would add it based on the brand-sake and their beautiful dividend yield and consistency in that growth, to which I break into next..

Dividend Yield & Payout: Now McDonalds has consecutively paid and increased Dividends for over 34 years now and continues to do so at a nice increasing rate.  Their current yield of ($0.61*4) 3.21% is extremely attractive as it is over the 3% mark that I enjoy.  The payout ratio of $2.44/$4.58 = 53.27%; almost smack down in the middle of my 40-60% range = another thumb's up in my book.  Last increase  from 55 cent to 61 cents per share provided an 11% increase alone.  They paid a 33% increase back at the end of 2008 aka during one of the worst financial time periods we have endured.  Wow.  Really solid if I may say.

Conclusion: McDonald's is a great choice/pick to add to your portfolio.  With a market capitalization of close to $80Billion, no one comes close to them.  They currently are expanding their international business and are consistently increasing that beautiful dividend that us, as investors, love to see.  McDonald's, at any time, is a great way to start your dividend portfolio.  With their above 3% yield and consistent increases of over 10% to their payout, while maintaining a medium pay-out ratio, is extremely attractive.  Our waistlines may not enjoy the "Golden Arches" but our portfolio's sure do : )  Enjoy!

-Lanny B.

Disclosure: I do not recommend anything, please consult your own research. This is actual data, analysis, however I base no investor recommendation.  I am LONG MCD.  Thank you for your understanding.


Picture Location: http://www.stamp.umd.edu/food/mcdonalds.shtml

Southern Copper Corporation Stock Analysis

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Southern Copper Corporation (SCCO) is a large mining/producer of precious metals such as silver, gold, copper, etc.. and do a lot of business in Peru and Mexico (where large reserves are).  I wanted to keep this in line with the silver/oil/food discussion I spoke about earlier.  Analysis is as follows:



P/E Ratio: SCCO's Price currently is at $42.05 with earnings per share (EPS) at $1.83.  Therefore, the P/E stands at 22.98; higher than the S&P 500 average.  When comparing this to their industry of involvement (Basic Materials) on MorningStar, they are above the average of 17.  Therefore, it isn't as attractive in these terms.  However, there has been a declination in overall ounces of silver and the price of the metal has sky rocketed.  I am mixed on these stats.  Also to note - Morningstar shows the forward P/E is 12...

Potential Appreciation: SCCO's 52week high stands at $50.35, giving it a potential of ((50.35-42.05)/42.05) = 19.7% appreciation.  This has a lot of upside given its recent history.   Pair that with the increase of value of an ounce of silver, I can see this going above those marks.  **Note: past performance is not an indication of future performance

Dividend Yield & Payout: They pay 4 dividend payments per year.  Based on the last four, totaling 1.83, their yield is 4.35%.  This is much higher than the average of the market and provides a good incentive/attractiveness to potential and current investors.  Their current payout ratio: $1.83/1.83 = 100%.  This is how much they pay in dividends over how much they earn per share.  This is obviously extremely high and causes caution to investors.  Their last increase from 43 cents to 58 cents marks a 34% dividend increase.

Conclusion: I do like silver.  I have done a lot of research on the metal and it shows the declination of amount of silver that we have in stock today.  Silver value is increasing at an tremendous rate and I like to see what companies are in the trenches to mine this stuff out.  I like their yield and dividend payments, along with the industry they are in, but I will have to see what their next earnings release shows for the EPS; morningstar shows a forward P/E of 12.  Any thoughts on Silver/Oil/Food?  What companies do you like as we battle through this volatile market?  Please comment or message!

-Lanny B.

Disclosure: I do not recommend anything, please consult your own research. This is actual data, analysis, however I base no investor recommendation. Thank you for your understanding.


Picture Location: http://www.mountainminingsilver.com/Home_Page.html

ConAgra Foods Stock Analysis

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ConAgra Foods Inc (CAG) is a very large consumer and commercial food manufacturer for products such as Hunt's, Slim Jim, Orville Redenbacher popcorn and many others.  This is another company I wanted to analyze as food prices begin to rise, along with oil and precious metals.  Now lets begin the analysis.



P/E Ratio: Their current share price is $23.00 flat with a $1.54 EPS according to Google Finance.  This brings us to a (23/1.54) 14.94 P/E ratio, which is under my 15 on average that I like.  Compared to the S&P 500, ConAgra is undervalued, according to this metric.  On Morning star's website, the industry average is 17 for the market they specifically operate in, thus ConAgra is currently undervalued against it's current competition.  Thumbs on this metric.

Capital Appreciation: Solely based on the prior 52 weeks, ConAgra's high is $26.32, which breaks down to ((26.32-23)/23) 14.4% upside possibility.  Again, this would just be an additive to the main focus of my blog = their divided.

Dividend Yield & Payout Ratio: Their dividend per year, currently stands at (.23*4) $0.92 per share.  The yield, therefore, is (0.92/23) exactly at 4%.  4% is extremely solid, much higher than what I like and is very attractive.  Their payout ratio is 0.92/1.54 = 59.74%.  Boom, just barely under my 60% ceiling on the average that I like to see.  Also, their annualized dividend growth (according to my sources) is 9.23% and they have been paying a dividend since 1985; over 25 years of dividends!  The yield, ratio and growth rate receive another thumbs up in my book.

Conclusion: For the long-term investor, this seems like a stock priced to buy at the moment.  With rising food prices, money flowing into the market and a track record of dividends - proves it could be a staple in a portfolio.  Their dividend yield is exceptionally attractive, they have potential upside with a very acceptable level of payout on their earnings, I see this being a stock to fit well in any portfolio.  I can see the price of ConAgra to hit above $26 range in 3-4 months.  I suggest you do your own analysis and consult an advisor or other sources before making a decision.  Thank you!

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. Thank you for your understanding.

Image Documentation: http://www.wisynco.com/conagra

Monsanto Stock Analysis

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Monsanto (MON) is involved the agricultural industry and was spoken to me by my good friend in Chicago.  He is very excited about this company, given the economic climate circumstances with food and agricultural products current and upcoming rise in price.

P/E Ratio: Current Price of $70.91 with earning per share of $2.05.  This P/E equates out to 70.91/2.05 = 34.59.  This looks extremely high, I know.  The market has brought this down a few dollars as well, hopefully it continues.  HOWEVER, the industry average according to Morning Star is 34.3.  Therefore, this industry may have a higher price relative to their earnings.  I would like to see the price tick down a bit more though : )

Price Appreciation Potential: Their 52 week high is 77.28, providing a ((77.28-70.91)/70.91) 9% potential capital appreciation.  Their low is $44.61, showing they have come from a loooong way.  It's tough to dictate this, as food prices are going up and this could push the price over their high.  However, I haven't done that thorough of an analysis to decide.  I will reiterate - I'd like to see this come down a bit.

Dividend Yield & Payout: Their dividend payout per year is $1.12 per share or (1.12/70.91) 1.58%.  This yield is under the S&P on average.  If the price came down, this would push the yield up. Their payout ratio is (1.12/2.05) 54.63%.  It is perfectly in the range that I like to see.  That yield could be a little higher, but that is me being selfish I assume.  They have paid dividends for 10 years and based on a few resources, they have increased dividends by 20% annually.  Not too shabby on that end.

Conclusion: Things I like: They are at their average for P/E.  The Industry is going in an upward direction.  Dividend Payout is nice.  They do pay a dividend yield with an annual increase of 20% on average.  Thins I dislike: Uneasy with an appropriate conclusion on that P/E.  It is still high for my taste and would like price to creep down.  With a price decrease, their yield would also be more attractive.  However, I haven't done an intense analysis on Monsanto and may do so in the upcoming hours/days.

-Lanny B

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. Thank you for your understanding.

PPL Corp Dividend Analysis

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Today on my agenda is PPL Corporation (PPL), a Utility Company based in Pennsylvania and also is involved internationally.  One reason why I like the Utility Industry is that we always will be using some sort of energy to carry out our daily activities, I mean what is going to brew that coffee as you are reading my blog!?

To begin - P/E Ratio: Price currently as of market close is $25.02 and their earnings are $2.23 per share, according to my pals at Google Finance.  This equates out to a: $25.02/2.23 = 11.22, well under the S&P 500 average.  This tells me that this utility company may be undervalued.  Morning star.com has shown that the industry average P/E is 11.1.  Therefore, they are right on with the industry.  There may be other companies that are more undervalued than others, which would need more analysis.

Appreciation from current price: Their 52 week high is $30.05.  Therefore, based on that historical fact and with them trading at $25.02, there is ((30.05-25.02)/25.02) = 20.1% appreciation possibility with the stock.

Dividend Yield & Payout Ratio:  Their dividend payout per year currently stands at (0.35*4) $1.40 annually per share.  $1.40/$25.02 = 5.60%.  This yield is very attractive and offers a great DRIP opportunity.  Most utility companies do offer a generous yield, and this one doesn't stray to far from the tree.  The payout ratio breaks down to 1.4/2.23 = another 63%er.  This isn't too alarming, just out of my 60% range.  Most utility companies pass on most of their earnings down to their investors, therefore this doesn't "turn me off" in the least bit, and they have been doing so for over 25 years.

Conclusion: If you don't own a utility company in your portfolio, this could be a great company to look at.  With usage of energy always being there and also an international protection, this could be a long-term stock one would hold.  They offer a great dividend yield and I believe they have room for appreciation.  Again, consult your own analysis and advisers to see if it fits your strategy.

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. Thank you for your understanding.

Oil and Food Companies

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Intelligent Conversations...

I had a very intelligent conversation with an analyst at work yesterday and he proposed that we move into oil, food and precious metals over this time period.  I believe he is right.  I am making this post to see what all the viewers believe about this.  With money flooding into the market/economy, it is weakening the dollar and pushing up prices on our necessary items, such as food and oil.

What companies do you believe to be undervalued in the food and oil industry that have solid dividend yields (Preferably over 3 percent, with a good track record)?  Companies like Exxon, TOTAL, Chevron, Smuckers, Kellogg, PG and the like?  Also - Do you like SLV for silver or is there silver companies that investors are enjoying the benefits of currently?

Lastly - what do YOU all thing is happening with this market currently?  What strategies are you all implementing into your portfolios currently?  Do you believe in "active-trading"?  I will look forward to comments, emails and the like!

Sincerely,

Lanny B.

Lance Update

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Lance (LNCE) NOW! Up-Date: Lance is currently trading at $17.43 (down 88 cents or 4.78%) and has currently dropped to provide a yield now of 3.67%, up .07% since my post on Sunday.

Reason why I post this - yield is higher, making it a smidge more attractive.  I'd like it to still come down more before I again re-evaluate the dividend.  I wanted to just keep everyone "in-the-know" on this, as it is a giant decline.

Thank you. - Lanny B.

Lance Dividend Analysis

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Lance, Inc. (LNCE) is in the consumer industry, food staple manufacturer.  They make food snacks like the peanutbutter and honey crackers that I am eating right now, in fact.  They are working with over a $1B in market capitalization and go up against the big guns such as J&J Snack foods, Kraft, Kellogg and that sort.  Smuckers may also be a huge competitor.  During difficult times, this company would be a very good company to own, in my opinion due to the demand for cheaper snack foods and a solid dividend.  Let us begin the simple analysis.

P/E Ratio: Lance's earnings per share is $1.01 according to Google Finance.  To describe how this is derived, you take the Net Income and divide it by the number of shares outstanding.  The current share price of Lance, as of February 20, 2011, is $18.31.  Therefore, the P/E is - 18.31/1.01 = 18.13.  This is higher than what I like, typically under 15.  This shows that they are not undervalued when compared to the overall market as a whole.  If the share price came down and/or the earnings increased, the P/E would decrease, making this a more attractive stock.  Also, Morning star shows the Industry Average to be 17.4 P/E, therefore Lance is a tad higher than that as well; appearing that there may be more attractive companies/stocks within that industry.

Dividend Yield: Lance's Dividend per quarter stands at 16 cents per quarter or 64 cents for the year.  Thus, 0.64/18.31 = roughly 3.5%.  This is pretty good and much higher than the S&P 500 on average. What's good with stocks, is that they usually increase with inflation, therefore they tend to be more attractive than bonds given their fairly comparable yields.  Lance also paid a special cash distribution in December of 2010 for $3.75!

Dividend Payout Ratio and Growth Rates:  Since their dividend per year is 64 cents and their earnings per share is 1.01, this gives us .64/1.01 = 63.36% payout ratio.  This is just a smidge higher than my usual range of 40-60%, but doesn't alarm me too much as it is just a small amount.  According to my analysis and sources, their dividend growth rate is in negative terms of (1.3%); they used to pay a higher dividend in the pre-2000's but cut it down to 16 cents a share from 24.  This obviously doesn't attract investors.  They have paid dividends for roughly 21 years, which is a good sign.

Conclusion: Lance is a strong company, but there are red flags based on the analysis TODAY.  They have a higher P/E than their industry average and S&P 500 average, and they haven't increased their dividend in over 10 years.  They do, however, provide a solid 3.5% yield currently; higher than most companies.  As of now, I will not add or recommend a position.  If Lance drops in price, and/or increases dividend, and has a solid 2011 year - I will further evaluate.

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. Thank you for your understanding.

Merck Stock Analysis

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Merck (MRK) has paid dividends, as crazy as it sounds, for over 40 years.  They are in a highly competitive industry - HealthCare and more specifically - Pharmaceuticals.  The industry can be very confusing with expiring patents, regulation issues, recalls on products etc.  The pipeline for a product to come to fruition also is very long.  However, I have noticed they all enjoy paying solid dividends.  

As always, lets start with price: as of the close on February 2nd 2011 they finished at $33.82.  Their 52 week high is $39.72, with a low of $30.70.  Therefore, based on their high - they are 14.9% away from it (39.72-33.82)/39.72 is what I used.  They are 3 bucks above their low, in a way showing there is more upside than downside currently.  However, that could be my opinion, which may be different from others. 

Price to Earnings Ratio: MRK has a current 12.1 P/E ratio, below the S&P average and according to Morning star is below the 14 average for the industry it is in.  Somewhat cheaper than the industry, Morningstar can also show you more ratios that it may be better or worse than the industry.  

Dividend Yield: Merck currently has a $1.52 annual dividend.  Thus, $1.52/$33.82 = roughly 4.5% yield.  Not too shabby.  Currently yields higher than Pfizer (PFE) and Abbot Lab. (ABT), their two big competitors.  One downside that I noticed - they did not raise their dividend last year.  One positive - they didn't slice/cut their dividend during the recession.  They still do have a track record of increasing their yield, I would lookout to see what they do with their dividend this year.  Their annual growth rate in their dividend is 10.37%, again this including a 0 increase for 2010.  I'm curious to see what they do this year. 

Payout Ratio: Their dividend is $1.52 per year and their EPS (Earnings Per Share) is $2.79.  Therefore, 1.52/2.79 = 54.5%, which is in my range of the 40-60% that I like.  It's almost smack dead in the middle, displaying they give more than half of their current earnings back to their shareholders and keep 45.5% for future growth in Research and Development (a typical large expense for pharmaceutical companies).  

Conclusion: Merck is one of the big players in the pharmaceutical industry, capturing more than 60Billion in market capitalization (Shares outstanding X Share price).  With solid earnings, solid dividend growth and a very median payout ratio - they seem very attractive, with a P/E ratio lower than the industry.  However, I want to see what Merck plans on doing with their dividend this year, as I do not want to see another 0 dividend increase.  I plan on waiting to see what they do with that issue. If you are looking for a pharmaceutical company or someone in the healthcare industry - you must include Merck in your analysis/options.  

I recommend doing your own due diligence before purchasing any investment, however, and I do not make a recommendation to anyone - I simply describe how I feel about the topic at hand.  Thanks for reading!

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

Friday Night Round Table

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Greetings everyone!  Today marks the end of the last official week of January and I wanted to share my thoughts on currently "big" companies that are undervalued or the stock price has taken a large hit recently, thus offering a higher yield than usual.  To begin my brief discussion we will start with:

Johnson and Johnson (JNJ): A dividend Aristocrat, their stock has dropped around $3 due to recalls on products, lawsuits being filed as well as a decrease in revenue and profits, year over year.  However, from a company standpoint - keeping your investors happy is what they need to do in this situation, thus their dividend, in my opinion, still stands strong and they have excess cash in storage.  Their price at $60.01, brings their yield to 3.60%; which based on my analysis 4 weeks ago, they had a yield of 3.49%.  Thus, it is an even more attractive investment for new/current shareholders.

Intel (INTC): Even after their stock price surged close to $22 after they announced their stock buyback plan and dividend increase, they had a pullback today, thus finishing off at $21.46 per share with a current yield of 3.37%.  With my previous article about INTC, their yield was 2.99%, thus it is much higher.

WWE (WWE): You read it.  The World Wrestling Entertainment has taken a beating due to disappointing earnings guidance.  However, with a dividend yield of 12.03% and the Royal Rumble coming and Wrestlemania, my brothers (die hard fans) say that this should help the company's revenue and that the loyal fan base is still there.  It will be interesting to see what will happen.  They are priced at $11.97, which is around $2 - $2.50 less than what it has normally traded at over the last 52 weeks or so.

AT&T (T): This is difficult.  Despite solid results, Verizon (VZ) and the Apple's (AAPL) iPhone seem to extremely threaten good old AT&T.  Their price has plummeted as well, finishing the week off at $27.49, pushing the yield to an astounding 6.26% (I analyzed them earlier when their yield was at 6.05%).  Does ATT last?  They are making now a bigger push for android phones, which is obvious due to the "non" exclusivity of the iPhone.  I know we are all about cell phone's and wireless coverage - but AT&T still has Cable, Internet, Land Line, U-Verse etc.  - question I have is - are these products of old age and are on a decline as well?  Being in the Dow 30, AT&T has to have something.

Lorillard (LO): They have dropped, in the last month, about $8 - roughly from mid $82 to $74.65, thus pumping the yield to 6.03% (According to google finance).  They are a cigarette company, and I know some people may be upset for me writing about them, but their yield is very strong.  I may do a further evaluation in the upcoming weeks on them.

Hudson City Bancorp (HCBK): They have dropped tremendously as well to $10.98 due to low mortgage interest rates and the uncertainty of these rate fluctuations in the future.  Their yield currently stands at 5.48%.

What do all of you think of these stocks?  Any other High dividend yielders that look attractive going into the weekend?

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

J.M. Smucker Company Stock Analysis

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The JM Smucker Company (SJM) has paid dividends now for over 10 years.  They did extremely well during the great recession as they had the acquisition of Folgers and also they are a staple in everyone's homes with their vast array of product offerings - I mean come on, I think I eat peanutbutter everyday and my mom loves their coffee : ) 

To start the analysis, I would like to look at their price: as of January 27th 2011 (Before the market opens) they are trading at $62.34. Their 52 week high is $66.28, giving a chance of a 6% upside on the pricing giving its most recent high. Their low is $53.27 over the prior 52 weeks.  It is more towards their 52 week high at this point, which I would like to see it a dollar or two lower.  

Price to Earnings Ratio: SJM has a current 14.74 P/E ratio, below the S&P average and according to Morning star is below the 16.2 P/E for the industry average. Therefore, SJM's stock is a cheaper option according to its earnings and is currently undervalued against the average of both the industry and S&P index.

Dividend Yield: Let us take a look at Smucker's dividend yield.  Their current dividend yield when trading at $62.34 is 2.57%.  2.57% is still much higher than the average of the S&P 500 index, and they have had consecutive raises in their dividend policy.  Also, their dividend yield growth rate currently stands at 9.61% since their first issuance back in November of 2000.  Last year's increase was over 13%, from 2008 to 2009 (Excluding their special dividend) was 8.7%, and from 2007 to 2008 was about 7%.  

Payout Ratio: Their dividend is $1.60 per year and their EPS is $4.23.  Therefore, 1.6/4.23 = 37.8%, actual a low ratio.  Compared to their earnings, they are retaining over 60% of those for their business, building up their cash supply for possible future acquisitions I am sure (One allows me to think that, because of the big Folgers deal they pulled off) and this retaining of earnings could be used for further, future dividend increases.  This shows me that they have room to provide increases and consistently pay that dividend.  

Conclusion: From what we all experienced over these last 3 years from the "great recession", one can bet that Smucker's was a great pick as most consumers would buy peanutbutter (Jif) for cheaper meals and make their own coffee at home (Folgers) than going to a cafe and paying a few dollars for a cup.  As it is a great staple for your cupboards and countertops, I believe it is a great staple for your investment portfolio.  I currently do not have a position in SJM, but am highly considering starting a position, as over time with a DRIP in place, this investment could pay off mightily.  

I recommend doing your own due diligence before purchasing any investment, however, and I do not make a recommendation to anyone - I simply describe how I feel about the topic at hand.  Thanks for reading!

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

Intel Boosts Dividend & Authorizes BuyBack Plan

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Big News for Intel (INTC) today!

1.) They boosted their dividend by 15%, from .1575 to .1812 per share per quarter.  This led to their share price to rise by 2.02% today to $21.24 per share.  The dividend yield on Intel is: 0.7248/21.24 = 3.41%; much higher than their previous 3%!!

2.) Intel Authorized a $10Billion buyback plan.

What does this mean for shareholders?  Well, less outstanding shares = higher earnings per share, thus boosts the value of the common stock held by shareholders.  Pairing that up with a 15% increase in dividend and that sums up a great day if you are an Intel investor.  I wanted to add shares to my portfolio, now I have more of a reason too : )

This was a quick post and I just wanted to get the word out there.  For more on Intel, see my analysis.

-Lanny B

Chevron Stock Analysis

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Chevron (CVX) has paid dividends for 40 years and have consistently raised them for 20!! One of the longest that I have seen, that's for sure.  If you aren't aware, we are in the oil consumption age and even though we are trying to find other renewable energy sources, we will be using Oil for a very, very long time.  Why not have a company that is heavily involved and one of the biggest names in the Energy sector then? 

Their price: As of January 22nd 2011 the price is at $93.78. I know, I know - that is extremely high and I haven't even analyzed a company yet with such a high stock price, which may though off potential new investors.  Their 52 week low is $66.83 and their 52 week high is $93.94.  Hmph.  They are at their 52 week high and their trend is definitely ticked up over the last year.  I normally never buy a stock when its at its peak in any given time period.  This is the only con in my book for Chevron, but this isn't a company you buy one day and then hours/days later you sell it.  

Price to Earnings Ratio: Chevron currently has a P/E ratio of 11.19 (According to Google Finance), which of course is below the S&P average and according to Morning star is below the 14.5 P/E for the industry average. Therefore, Chevron's stock STILL is relatively CHEAP to its earnings and is currently undervalued against the average of both the industry and S&P index.

Dividend Yield: Oil companies like paying dividends back to their shareholders.  Their current dividend yield when trading at $93.78 is just over 3%.  A 3% yield on a $93 share price is pretty damn good if you ask me.  What's so surprising is that they can pay an above average dividend, present an above average yield on an incredible high-priced stock!  If Chevron's stock price dropped $10 to $83 per share, their yield would be 3.47%, just for measure.  Conclusion on their yield - it is extremely good, especially that they have had a track record of paying and increasing their dividend.  Now on to that growth rate on their cash flow to shareholders: their dividend yield growth rate is 7.1% according to my analysis since 1970.  That isn't too shabby if you ask me.  This allows them to keep raising their dividend on an annual basis, helping to keep up with an increasing share price.  

Payout Ratio: Their dividend is $2.88 per year and their EPS is $8.38. Therefore, 2.88/8.38 = 34.4%, just below my 40-60% range that I like.  What this means is that they tend to retain most of their earnings, to help grow their company, expand their stores and market and possible acquire other companies. As an investor, 34% payout isn't too bad, though I would like to see them provide back more of their earnings to their shareholders.  It is nice to note that they are earning a tremendous amount per share of common stock; a great sign of a strong and lasting corporation.  

Conclusion: Chevron is also an extremely sound company to add to your portfolio at any time.  Given it's current price, I would like to see it cheaper, but then again, I know with a DRIP that you will be able to catch it at occasional low points.  A reason why an oil company is great, is no matter what - you will be filling up your vehicle at the pump to go from point A to point B and as a country we will be using it tremendously, at least throughout the next few decades.  I do not have a position in Chevron, but would want to do more analysis on the corporation before adding a position.  Thank you for reading this brief analysis, good luck and take care.  

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

Walmart Stock Analysis

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Walmart (WMT) has paid dividends for 36+ years.  Walmart is one of the large and mighty powerful Dividend Aristocrats, meaning they have paid dividends and increased them for over 25 years.  A great stock if you ask me to have in your portfolio!  

Their price: as of January 20th 2011 (before the market has opened) the price is at $55.03. Their 52 week high is $56.27, giving just a 2.2% appreciation on the pricing giving its most recent high. Their low is $47.77 over the prior 52 weeks. Therefore, it is verrry close to the 52 week high.  Since they are extremely close to that 52 week high, I would personally like to see them drop a dollar or two.  However, since their track record shows, a dividend increase/raise for 25+ years hints to me that Walmart isn't a bad buy at anytime.  That is just my perspective, simply because I invest for cash flow from these companies : ) 

Price to Earnings Ratio: Walmart currently has a current 13.7 P/E ratio (According to Google Finance), which of course is a tad below the S&P average and according to Morning star is below the 14.8 P/E for the industry average. Therefore, Walmart's stock is relatively cheap to its earnings and is currently undervalued against the average of both the industry and S&P index.

Dividend Yield: Let us talk about their cash flow back to investors!  Their current dividend yield when trading at $55.03 is 2.20%.  I know what you all are thinking - THIS IS THE LOWEST out of all my analysis' that I have completed thus far.  However, it is STILL above the average of the S&P 500 and again - it is a Dividend Aristocrat, giving a pay/dividend raise for 25+ years.  Now if their price went down to say, $52 for example - their yield would be 2.32%, a little higher and a little cheaper.  Here is why this dividend yield doesn't turn my face away -  their dividend yield growth rate is an incredible 24.36% according to my analysis since 1974.   A 24.36% raise on average.  That is extremely high and definitely keeps their shareholders happy.  

Payout Ratio: Their dividend is $1.21 per year and their EPS is $4.02. Therefore, 1.21/4.02 = 30%, just below my 40-60% range that I like.  What this means is that they tend to retain most of their earnings, to help grow their company, expand their stores and market and possible acquire other companies. As an investor, 30% payout isn't too bad, though I would like to see them provide back more of their earnings to their shareholders.  

Conclusion: Walmart is an extremely sound company to add to your portfolio.  Given it's current price, I would like to see it maybe 2-3 dollars cheaper, but then again - that dividend growth rate on average of over 24% is amazing and the fact that they are an aristocrat with a proven track record of dividend increases is a plus.  The reason I like that is because even during a recession (which we just had) they still increase their dividends.  I also ask myself this - is Walmart going anywhere?  Most likely not, therefore this is a stock to hold for an extremely long-term in my perspective.  Thank you for reading this brief analysis, good luck and take care.  

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

AT&T Stock Analysis

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AT&T (T) has paid dividends for 26 years.  They have had at least 5 years of consecutive dividend increases and are a truly ruler in their area of the technology sector.

Their price: as of January 16th 2011 they are trading at $28.43. Their 52 week high is $30.10, giving a 5.55% appreciation on the pricing giving its most recent high. Their low is $23.78 over the prior 52 weeks. Therefore, it is close to the 52 week high.  I usually like to buy further away than that 52 week high, simply because I am cheap : ), but then again my preferences can be completely different than yours.  

Price to Earnings Ratio: AT&T has a current 8 P/E ratio (According to Google Finance), well below the S&P average and according to Morning star is far below the 15.8 P/E for the industry average. Therefore, AT&T's stock is relatively cheap to its earnings and is currently undervalued against the average of both the industry and S&P index.

Dividend Yield: Of course I am bringing up their dividend yield currently.  Their current dividend yield when trading at $28.43 is 6.05%.  Wow.  Pretty high if you ask me.  Most telecommunication stocks, however, do have high yields, therefore, this isn't unusual for this industry.  Also, their dividend yield growth rate is just over 5% according to my analysis since 1984.   That isn't as high as I typically like to see it, however the yield is high and increasing what they pay out by 5% every year still isn't too shabby : ) 

Payout Ratio: Their dividend is $1.72 per year and their EPS is $3.55. Therefore, 1.72/3.55 = 48.45%, right in the middle of where I like it (Between 40 and 60%)!!  This gives a great big thumbs up in my book as a close to 50% payout ratio tells me that basically they keep half of their earnings for growth or other means of action and they give half of them back to their investors!

Conclusion: AT&T is a great stock to add to your portfolio.  Given it's current price, I would like to see it maybe 50 cents to a dollar cheaper, as I think Verizon's deal with Apple for the iPhone could hinder AT&T's performance for the future.  However, one has to realize AT&T's total business - Internet, U-Verse (TV), Direct TV, Home Phone Lines, Business Lines, Mobile Devices, Publications etc., etc.  Therefore, they have different cash flow vehicles in their portfolio rather than just their mobile branch.  They have been around for a very long time period and I believe will be for the future.  

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

Intel Corporation Analysis

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Intel Corporation (INTC) has paid dividends now for 18+ years.  They have had at least 5 years of consecutive dividend increases and are a truly ruler in their area of the technology sector.

To start the analysis, I would like to look at their price: as of January 15th 2011 they are trading at $21.08. Their 52 week high is $24.37, giving a 13.5% chance of appreciation on the pricing giving its most recent high. Their low is just at $17.60 over the prior 52 weeks. Therefore, it is somewhere in between. Again, with Intel price is not necessarily the most important thing as you invest for cash flow, and their cash flow always grows every year.

Price to Earnings Ratio: INTC has a current 11.34 P/E ratio, well below the S&P average and according to Morning star is far below the 18 P/E for the industry average. Therefore, INT's stock is relatively cheap to its earnings and is currently undervalued against the average of both the industry and S&P index.

Dividend Yield: My favorite part. Their current dividend yield when trading at $21.08 is 2.99%. It may be a smaller dividend yields than those analyzed in the past but I think with increases in their dividend and their strong performance and strength in their sector, which companies RARELY offer a yield, that this is more than good.   Also, their dividend yield growth rate is an absolute amazing 24.29% since their first issuance back in October of 1992! Therefore, you get (on average) a 24.29% increase yearly to your dividend cash flow from INTC. I also ask - how many jobs have you had that give you a 24.29% increase every year on average?

Payout Ratio: Their dividend is $0.63 per year and their EPS is $1.86. Therefore, 0.63/1.86 = 34%, actual a somewhat low ratio. Since it is in the technology sector which grows at an astounding rate, they tend to retain more earnings to grow, but obviously they have enough earnings to consistently raise that dividend, which is exactly what we want!

Conclusion: Intel is a great pick in your portfolio. They have a strength-hold on the technology division that they are in (Market Cap is over 117 Billion!).  They are a great stock to own for its cash flow as they have recorded past history of amazing returns on their stock price and once placed into a Dividend Reinvestment Plan account, you can increase your cash flow dramatically year after year. At the given price, I would start a position in Intel based on their dividend growth alone and it doesn't hurt how dominant they are!

-Lanny B.

Disclosure: I do not hold nor recommend anything. This is actual data, analysis, however I base no investor recommendation. However, I personally would add/start a position on this firm, however my direction is different from anyone else's. Thank you for your understanding.

My Dividend Portfolio as of 12/31/2010

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My Dividend Portfolio:

Symbol	Yield	Current ShP	Annual Income
PFE	4.57%	$17.51	42.70
CIM	16.79%	$4.11	31.15
NGG	6.31%	$44.38	49.66
V	0.85%	$70.38	3.35
HRB	5.04%	$11.91	9.60
ANH	13.86%	$7.00	7.76
HIMX	10.59%	$2.36	8.25
PRGN	5.83%	$3.43	2.00
SHMR	5.85%	$13.75	8.04
LMT	4.29%	$69.91	87.00
TOTAL	5.17%		249.51

This marks a 45.12% increase in my annual divided cash flow from my November 27th posting regarding my holdings.  This is due to a few reinvestments from stocks that I own and also a new addition of Lockheed Martin Corporation (LMT), which I purchased Thursday, December 30th.  I have set many goals for this year, to which I will use my recent action on Thursday as one for the new year.  I set goals with my friend who is an auditor in Chicago, who was in town and we decided to really set goals and strategize on how to accomplish these.

My goals for 2011:
Invest $7,500.00 (minimum) into DRIP (Dividend Reinvesting) stocks (Update: I have done $2,000)
Maximize my Roth IRA contributions of $5,000.00 for year 2011
Create other Passive Income Streams (which one can see from my Passive Income Online blog)
Start Positions in Speculative/Micro Cap stocks
Accomplish my education and certification goals for 2011 (MBA-Finance graduating May 2011 and CPA exam August 2011)

With these goals, more specifically the investment goals, I hope to add to my dividend income stream.  I will continue to reinvest my dividends from my holdings, which will thus provide me more shares of that stock, thus increasing my dividends annually (all else held constant such as a stable dividend etc).

Disclosure: I do not recommend any particular company. I am therefore Long on all stocks above, but do not provide this chart as a recommendation of any sort. Do your due diligence and find what is suitable for you. Thank You : )