November 30, 2022 | BHP, Daily JAM, Dividend Income, Special Reports |
You have to do a fair amount of work rearranging the dividend numbers for BHP (BHP) to understand why this diversified commodities producer makes this list. First, throw that 11.02% dividend yield reported on Yahoo Finance and other sources. As part of its corporate strategy of moving away from fossil fuels and investing in expanding existing copper production and in opening its first potash mine (in Canada at a cost of $5.7 billion), BHP sold its petroleum unit. Part of the big “dividend” distribution in fiscal 2021 and 2022 is a result of the company distributing the shares in the purchaser it acquired in payment for that deal to BHP shareholders. Of the $7.11 paid in dividends in fiscal 2022, for example, $3.86 came from the distribution of those shares. If you buy BHP now, you can’t expect a repeat of that distribution of shares. (BHP also sold its U.S. onshore petroleum assets in 2019.) So the question is what dividend payout can you expect from BHP in 2023?
November 21, 2022 | Daily JAM, Videos |
Today I posted my two-hundred-and-eighth YouTube video: Quick Pick NiSource. This week’s Quick Pick is NiSource (NYSE: NI). If you saw my last Trend of the Week video, you know that I believe the dip in utilities represents a good buying opportunity as utilities make the transition away from coal and natural gas with an eye toward the future of electricity. Investors have already started “rewarding” some utility stocks, like Eversource Energy (NYSE: ES) and NextEra Energy (NYSE: NEE), because they see these utilities starting that transition. Which means, of course, that these stocks have been bid up on that recognition. Eversource is rated by Morningstar as 6% overvalued and NextEra, which owns Florida Power & Light, is rated at fair value by Morningstar. The utility I’m looking at is NiSource, which largely services Indiana and Ohio—not generally considered bastions of cutting-edge green energy technologies. But! Goods going from coast to coast necessarily travel through those states, and as trucking companies make the transition to electric, the utility companies that service those areas will need to provide the power. NiSource is at the beginning stages of its own transition away from coal and toward renewable sources. The stock currently trades at a 20% discount, according to Morningstar, with a 3.65% dividend, higher than both Eversource and NextEra. NiSource says they’re expecting 6-8% annual earnings growth over the next 10 years and they’ve started investing in renewables in Indiana and Ohio. I think this is a stock that will start to get recognized as committing to the energy transition and I’ll be adding it to my dividend portfolio.
November 21, 2022 | Daily JAM, Special Reports |
I know I’m not getting any older. Just better. And I’d assume that’s true for you too. But sources tell me that Canadians–yes, Canadians–are aging. And that there’s a growing market for retirement living facilities in Canada. According to Statistics Canada, the current supply of long-term care and retirement suites is 450,000. And by 2038 Canada will have a need for an additional 430,000 suites. Sounds like a growth market to me. And right now you can buy units in the Chartwell Retirement Residences Real Estate Investment Trust (CWSRF) with a 7.61% dividend yield.
November 17, 2022 | Daily JAM, Dividend Income, Jubak Picks, PXD, Special Reports |
When I put together my Special Report: “5 Safe Dividend Stocks Paying 6% or More,” one key requirement was that the company showed a long track record of raising dividends every year and the clear potential to continue to raise dividends every year. That formula could turn a 6% annual dividend yield now into 8% or 9% or even more over the next ten years. A safe almost guaranteed 10% yield at the end of 10 years strikes me as a very attractive prospect, especially given how tough I think the financial markets are going to be over the next five years or more. (For more on that outlook see my recently revised Special Report: “Your Best Investment Strategy for the Next Five Years.”) But I realized, looking at all the high-yield stocks that didn’t make the cut for that report that the requirement for a high-probability trend of higher dividends each year for the next 10 years, that this requirement left a lot of stocks paying very attractive high dividends now on the cutting room floor. Stocks paying 8% or more got left off the list because I didn’t see a commitment at the company to continued dividend increases every year or enough growth in free cash flow to make it possible for a company to raise or maintain its dividend through the ups and downs of the business cycle. These stocks paying 8% or more were very safe bets to continue paying that yield for the next year or two. But 10 years? Too much uncertainty. Which doesn’t mean you shouldn’t own some of these stocks now. An 8% or better yield for a couple of years is a very attractive prospect given how uncertain the economy and the stock market are right now. And an investor has a very simple remedy if a company looks like it can’t or isn’t committed to sustaining that yield. Sell the stock. So with all that in mind, I’ve put together a list of five “outlier” dividend stocks paying 8% or more at a time when the SPDR S&P 500 Trust ETF (SPY) has a yield of just 1.6%.
November 8, 2022 | Daily JAM, Dividend Income, Special Reports |
You might expect this list to be dominated by oil and natural gas producers. You might expect that–but you’d be wrong. Stocks like Pioneer Natural Resources (PXD) and Devon Energy (DVN) certainly pay dividends now high enough t qualify for this list, at 9.86% and 7.50% for the trailing 12 months, respectively, but I don’t think it’s possible to project that level of dividend payout for the 10-year period that I’ve focused on for this strategy. (Which doesn’t mean stocks like these aren’t worth owning on their dividends for the shorter term. In fact, I’m putting together a list of what I’d call current dividend outliers as an extra for this Special Report. These outlier stocks pay very attractive (better than 6% again and sometimes way better than 6%) dividends but the companies don’t have a track record or corporate culture that makes me feel certain about the longevity of this level of payout. Pioneer, for example, pays a 2-part dividend with a core rate and a variable rate depending on revenue and profits. That to me speaks to a company that doesn’t feel able to commit to the current high payout for very long. For a dividend stock with a high payout and a predictably long duration of that level of payout in the energy sector, I’m going to look at pipeline companies, especially those with big exposure to natural gas exports (specifically LNG exports) and the growing CO2 sector.
November 8, 2022 | Daily JAM, Dividend Income, Special Reports |
This is what I wrote yesterday in my Special Report. (You can find all the picks (so far 2) and the strategy I’m using if you go to the full Special Report.) I think Verizon provides a very useful checklist of what to look for in long-term safe picks that yield 6% or more. Which is why I’m putting it in the leadoff position on this list. Verizon isn’t anyone’s favorite stock right now. And it’s pretty clear why.
October 25, 2022 | Daily JAM, Jubak Picks, KO, Morning Briefing, Top 50 Stocks |
This morning before the stock market open Coca-Cola reported earnings of 69 cents a share for the third quarter. That was up from 65 cents a share in the third quarter of 2021 and was above the 64 cents a share expected by Wall Street analysts. Revenue of $11.1 billion was higher than the $10.5 billion projected by Wall Street.
October 14, 2022 | Daily JAM, Dividend Income, TFC |
I don’t like the economic and financial environment looming ahead for banks. I see bad loans rising with a need to reserve more against bad loans. Slowing economies aren’t good for loan demand or credit card delinquencies either. So I’m taking advantage of this moment to sell Truist Financial out of this portfolio in spite of the stock’s hefty dividend. I’ve got a loss on this position of 4.07% since I added it to this portfolio on June 13, 2022. The stock is down 22.19% for 2022 to date as of the close on October 12.
August 26, 2022 | Daily JAM, Dividend Income |
My one-hundred-and-seventieth YouTube video: “Quick Pick Intel” went up today. Intel (INTC) has had a bad year. In fact, you can argue that Intel has had “bad years.” The company has fallen behind both Taiwan Semiconductor and Advanced Micro Devices and getting back to parity isn’t a matter of one new chip. But I think the company and its stock may be near a bottom. (“Near,” mind you, depending on how the economy moves.) To me it looks like Intel will begin closing some of the technology gap with its rivals in 2023 and, the world certainly needs more chip factories. Thanks to the big drop in the stock, the shares trade with a high 4.3% dividend. And I think that dividend is safe due to Intel’s recent deal with Brookfield Asset Management that secures $15 billion in financing for the company’s new chip factories in Arizona. Which is why I’ll be adding it to my Dividend Portfolio on JubakPicks.com and JubakAM.com on Monday.
August 5, 2022 | CMI, Daily JAM, Dividend Income, Jubak Picks, Videos |
My one-hundred-and-sixty-fourth YouTube video “Quick Pick Cummins Part 3” went up today. I’m returning to my pick Cummins (CMI) because the company just released strong second-quarter earnings. What caught my eye is that besides not affirming guidance for the rest of 2022, the company reported growth in gross margins and operating margins at a time when many companies are feeling squeezed.
July 24, 2022 | Daily JAM, Dividend Income, PFE |
The federal government has agreed to purchase 105 million doses of Pfizer-BioNTech’s rebooted vaccine for $3.2 billion, the Washington Post reported on Friday. At $30.50 a dose, that’s a premium over the initial contracts the government made for the original vaccine in 2020, when the vaccines were $19.50 per dose. the government is expected to sign a new contract with Moderna (MRNA) shortly. Pfizer (PFE) is a member of my Dividend Portfolio. The shares are up 35.14% since I added them to the portfolio on August 28, 2020. The stock is down 11.89% year-to-date for 2022 as of the close on Friday, July 22. However, they are up 4.40% in the last month. Pfizer pays a 3.12% dividend.
July 5, 2022 | Daily JAM, Dividend Income, KMB, Stock Alerts |
As I said in my recent video “Quick Pick Kimberly-Clark,” I’m adding this stock to my Dividend Portfolio effect tomorrow July 6. The stock pays a dividend of 3.39%. That’s not knock-your-socks-off stuff, but very good for a very defensive consumer staples stock as we move closer to a recession. The stock is down 2.69% year to date as of the close on July 1 but the shares are up 10.31% in the last three months
