Friday Night Round Table

.

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

.

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

.

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

.

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

.

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

.

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

.

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

.

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 : )