Saturday, January 28, 2012

Why Smart Investors Buy Dividend Stocks

Let's get a few things straight. Dividend stocks are not cool. They are not exciting. And they do not make for good conversation topics at parties. They're like the trombone player from high school who never had a date to prom. In fact, come to think of it, the only thing dividend stocks are good for is making money. And potentially lots of it. So if you're not interested in making money, then proceed no further.  READ MORE

Wednesday, January 25, 2012

Dividend Growth Stock Analysis: AFLAC

Supplemental insurance is a boring topic to talk about. Many people have it through their work, but most probably couldn't tell you who their provider is... unless its Aflac (AFL).  Its amazing what a good advertising campaign can do for a company. The Aflac duck has become the face (and sound) for the company and has made Aflac a easily recognized name.  But its not just advertising that Aflac does well, they also dominate their niche insurance business.  I was lucky enough to buy stock in Aflac in 2009 when there were fears of them holding too much toxic European debt.  Those fears have been calmed since then and the future is looking brighter now.  So let's take a look at how Aflac rates in this week's dividend growth analysis*.  READ MORE

* Based on my experience using this analysis model I have decided to make a small change to consecutive dividends paid and consecutive dividend raises. Previously I used > 30 years = 2 points but have changed this to > 25 years. This will be reflected from this analysis forward.

Thursday, January 19, 2012

Boring Terms We Need To Know: P/E Ratio

Price-to-earnings ratio (P/E) is one of the first stock analysis terms people learn about.  It's a very simple calculation that gives you an idea of the current valuation of a company based on its earnings.  Although it is a simple metric and one most people will say they understand, there is more to just knowing that the lower the P/E ratio the cheaper the valuation of the stock.

For those of you who are beginners lets take a quick look at the calculation.  P/E is just as it appears, price divided by earnings.  Typically you will see (TTM) when viewing a P/E ratio, this stands for Trailing Twelve Months.  In other words, it is using the stock's earnings for the most recently reported 12 months.

Friday, January 13, 2012

Dividend Growth Stock Analysis: Wal-mart

Since I live in the city I'm not able to go to Wal-mart (WMT) to do my shopping very often. Of course there are several in the surrounding metropolitan area so I get the opportunity from time-to-time. Honestly I don't like the idea of going to them because the store is always crowded (no matter what time it is) but once I'm inside I'm amazed at the time and money I end up spending. I don't think I've ever come out of a Wal-mart store with only what I went there looking for. When something like that happens you know it's a good business and one that should be around for a very long time. I had this realization a few years back and was lucky enough to purchase shares of Wal-mart for under $50 / share. Let's take a look and see if the company still rates as a good dividend growth buy today:  READ MORE

Thursday, January 5, 2012

Searching for Future Dividend Stars

I was an avid baseball card collector when I was a kid. It was one of the few things that would tempt me to spend my allowance. I loved the smell of a newly opened pack of cards and even the cardboard crunch gum that was in the earlier packs... well at least for the two minutes that it had flavor. Although I loved the game of baseball and reading stats about players, what I really cared most about was the value of the card. Getting a card of my favorite player (Ozzie Smith) was great, but what I most wanted was a rookie card of a potential up-and-coming star because that's where the greatest potential for increased value was.

I remember when Topps brand would release "Future Stars" cards for players they thought were going to be, well, future stars. Of course they were basing this tag on a small sample set of the player's stats. So for every Bo Jackson, there was a Tim Pyznarski. Although I have moved on from collecting baseball cards to "collecting" dividend growth stocks, I'm still in search of those future stars so I can own an earlier and more valuable version of an asset.   READ MORE