Dividend Income
June 19, 2023 | Daily JAM, Dividend Income, NEE, Videos |
This week’s Quick Pick is utility NextEra Energy (NEE). NextEra is focused on Florida, a state with a relatively utility-friendly regulatory scheme, and where the company’s Florida Power and Light has 5.8 million customers. NextEra operates a mix of energy sources including seven nuclear plants, 4.6 gigawatts of solar, and, recently, hydrogen as well. That’s a good mix, fortunately, or unfortunately, for this point in the climate crisis. I have owned NEE since November 2020 in my dividend portfolio. The stock price hasn’t moved a lot lately, but if the Fed continues its pause on rate hikes and the economy doesn’t slow further, I think this one will outperform. Right now you get a 2.5% dividend with the possibility of capital appreciation if the company’s alternative energy efforts continue to show growth and when/if the Fed cuts interest rates.
June 14, 2023 | ADBE, ALB, AMAT, CMI, Daily JAM, Dividend Income, GOOG, JCI, Jubak Picks, Long Term, MSFT, NVDA, SCCO, Top 50 Stocks |
I think a well-constructed portfolio should resemble an onion. (Yes, to continue the analogy, it may make you cry in the short term, but the end result after cooking time is yummy.) At the center of that onion is a core built of stocks with extremely high, risk-adjusted potential rates of return. These stocks won’t deliver the kind of huge gains you can reap from investing in a risky bet–if everything turns out right for that company and its stock. But neither are they likely to crash and burn because something goes wrong at the company. These core portfolio stocks will drop if the market as a whole heads south, but they will drop less and recover faster. These aren’t buy-and-forget, or hold-forever stocks. They can soar to unreasonable valuations at times and an active investor should take profits at some point of overvaluation. (I did a YouTube video recently (you can find it on any of my sites) on when to sell a very overvalued Nvidia, for example.) And they can trade at big discounts to fair value (which is, of course, when the steely-eyed among us will buy) because management has made a mistake or between the industry in which they do business is slumping, or because the market for the company’s goods and services has taken an unexpected direction. At that point, you’ll need to consider selling or adding to your positions depending on your analysis of how long the damage might last and how bad it is. But the point of this core to your stock portfolio is that these are companies that will deliver index-beating results with relatively small risks. Which will enable you, the investor, to plan how to achieve your financial goals with relatively less worry and uncertainty. So, without further ado, here’s my list of 10 stocks for a core portfolio–with the very important “whys” for each pick.
June 1, 2023 | AMAT, AMD, CVS, Daily JAM, Dividend Income, EMR, GOOG, ILMN, Jubak Picks, Long Term, MSFT, NVDA, Top 50 Stocks, TSM, Volatility |
Artificial intelligence really is a paradigm-breaking, transformative technology. Right now, investors are so enthusiastic about the sector, especially the obvious leader Nvidia (NVDA), that we’re looking at a potential bubble that will collapse with much gnashing of teeth and I-told-you-so “wisdom” casting doubt on the reality of the entire endeavor. I think a bubble is indeed possible. Nvidia did trade at a trailing twelve-month price-to-earnings ratio of 196 on May 31, after all. But I think you do want to own the sector now–because the breaking of the bubble, if it does break is, in my opinion, two quarters or more away. And you want to own the sector for the long run–say, 10 years or more–because it is such a game changer for so much of the economy. But what to own? I’ve put together a list of the 10 stocks that I think are the best way to participate in the AI gold rush.
April 5, 2023 | Daily JAM, Dividend Income, DVN, Jubak Picks, Volatility |
Just in case there are readers who don’t watch my videos, but do follow my picks. Today, April 5, I added Devon Energy (DVN) to my Jubak Picks, Dividend, and Volatility Portfolios.
April 5, 2023 | Daily JAM, Dividend Income, Jubak Picks, Volatility |
Today’s Quick Pick is Devon Energy (NYSE: DVN). On Sunday, OPEC+ said it’s going to cut oil production by about 1 million barrels a day. The following Monday saw a surge in oil prices. My take on this? If you’re going to bet on oil, do it now, before the question of whether or not we’ll have a recession starts to hang over the sector. Devon Energy has a similar playbook to Pioneer Resources, a stock I already own. Devon has introduced a variable dividend (50% of post-dividend cash flow) alongside their set dividend payout. About 70% of Devon’s resources are in the Permian Basin, the lowest-cost oil resource in the U.S. oil shale sector. At the moment, the forward yield is about 9.4%, but it is variable and could go up and down. If oil prices continue to go up and Devon decides to produce more oil, cash flow will go up with it. I’ll be adding this to three of my portfolios–Jubak Picks, Dividend, and Volatility to get one more bump in this commodity before we start to worry about an upcoming recession.
March 6, 2023 | Daily JAM, Dividend Income, Videos |
This week’s Trend of the Week video is Utilities are Struggling as Inflation Surges. As utilities start to update their grid infrastructure to support renewable energy sources, utility companies have filed for rate increases. Those rate increases have to be approved by state government regulators, and they’ve recently gotten some pushback, specifically from utility commissions in the Midwest, including Wisconsin, Minnesota, and Michigan. As an example, in Michigan, DTE applied for a $388 million rate increase and the utility got approval for just $31 million. Utility commissions are arguing that they can’t approve rate increases when consumers are already facing soaring utility bills. Investors have expected utilities to be a place to hide in this market, with projected growth and higher revenue, but due to this kind of resistance from regulators, you can’t count on utilities to revenue and income to fuel dividend increases at the same rate as in recent years. I suggest picking utilities one by one, as opposed to ETFs in order to stay away from some of those companies that do business in less accommodating states. You can find specific utility stocks in my Dividend Portfolio available on JubakPicks.com and JubakAM.com.
February 28, 2023 | Daily JAM, Dividend Income, Jubak Picks, PXD |
On Friday, shares of Pioneer Natural Resources (PXD) fell on a Bloomberg story reporting rumored talks between the Permian Basin oil shale producer and Appalachian natural gas producer Range Resources (RRC). On Monday shares of Pioneer rebounded as the company denied that it was in acquisition talks. The lesson? Investors really don’t want Pioneer to spend money on acquiring more assets.
February 23, 2023 | Daily JAM, Dividend Income, Jubak Picks, PXD |
Wednesday, February 22, Pioneer Natural Resources (PXD) reported better-than-expected adjusted earnings for the fourth quarter of 2022 while revenues came up short of Wall Street estimates. Revenue was still up 18% year-over-year to $5.1 billion. Fourth quarter net income nearly doubled to $1.48 billion or $5.98 share, from $763 million, or $2.97 a share, in the fourth quarter of 2021. The company declared a quarterly total dividend of $5.58/share, made up of a $1.10 base dividend and a $4.48 variable dividend. The total annualized dividend yield is approximately 11%.Which is why I’m adding the shares to my Dividend Portfolio today.
February 22, 2023 | Daily JAM, Dividend Income, INTC, Jubak Picks |
So it wasn’t much of a surprise to most investors–although some of us were hoping that Intel (INTC) would hold its dividend steady after a big bond offering in the last few weeks. But today Intel cuts its dividend by 66% to 12.5 cents a share from a prior 36.5 cents. The stock dropped only 2.26% on that big news.
February 8, 2023 | Daily JAM, Dividend Income, INTC, Jubak Picks |
The possibility that Intel (INTC) would cut its dividend has been hanging over the stock price since the company announced one of the ugliest quarters I’ve seen in a while on January 26. No question why. Intel’s adjusted free cash flow was a negative $4.075 for the full 2022 year. And with the company looking to invest heavily in new fabs, the $6 billion a year in dividend payouts looked like a potential source of investing cash. And certainly, you wouldn’t want to buy into a stock paying 5.09% (as Intel did today) if the company was about to cut its dividend. But a dividend cut looks less likely today.
February 2, 2023 | Daily JAM, Dividend Income, Videos |
Today I posted my two-hundred-and-thirty-second YouTube video: Quick Pick Intel Today’s Quick Pick: Intel (NASDAQ: INTC). Intel’s revenue and earnings report last week was terrible. It was a classic kitchen sink quarter, where the company laid out all the bad news at once, so investors only have positive things to look forward to. The stock was trading at $28 on January 31, and the 52-week range is $52.5 – $24, so we’re currently pretty close to the bottom of the range. The 2022 loss is a little over 38% but year to date, even with all of this bad news, the stock is actually up 5.75. If you have a longer time range, this is the time to buy Intel. We’re close to a bottom here and their plans going forward include new chips and, in 2024, new technology that can really compete with AMD. Additionally, Intel’s fab business, where they manufacture chips designed by other companies, went up about 30%. They are one of the few companies left that are actually manufacturing the chips, (their biggest competitor being Taiwan Semiconductors.) As Intel improves its own technology, its fab business will grow and become more appealing to chip designers. As long as Intel hits its projected milestones throughout 2023, this is a good buy for 2024.
December 8, 2022 | ABBV, Daily JAM, Dividend Income, MMM |
Once a company has put in the time and money to make the Dividend Aristocrats list, the company isn’t likely to squander that investment just because a recession looms. To make the list–and garner a big chunk of cash from conservative dividend investors–a company has had to pay a dividend for a least 25 consecutive years and has had to raise that dividend every year. A company like 3M (MMM), which owns a 64-year record of paying and raising its dividend payout, is as close to a dividend sure thing as exists. Which is why it’s not surprising that AbbVie (ABBV), which owns a 50-year record of paying and raising its dividend, announced that it would raise its dividend in 2023 to $1.48 a quarter with the February 2023 payout. That would bring the annual dividend yield to 3.5% But…
