Yields, anyone???

redduck

redduck

Thinks s/he gets paid by the post
Joined
Mar 24, 2005
Messages
2,851
Location
yonder
OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.
 
Wait a minute (or so). I posted the above today at about 4:00PM. PST.
But, FIRE says I posted the above yesterday at 11:43 PM. How did I do that? Can I use this power to benefit humankind? Actually, I'm really into helping myself, but, if someone benefits along the way, that's alright with me.
 
there was an anaylst note recently where they said the dividend might be cut on C. they are cash flow negative from operations, a lot of loans going bad and they still have a lot of debt to repay
 
post_old.gif
Yesterday, 11:42 PM

No problem, I'll start drinking a better brand of booze (how could I argue that)? But I just copied the very top part of my initial post (see above with the blueish(sp)?-grey area. It does say:
post_old.gif
Yesterday, 11:42 PM (again copied from the original post)
Or, am I reading something incorrectly, or, just misinterpreting it? Wouldn't be the first time.
 
Last edited:
redduck said:
OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.
Click to expand...


WaMu latest earnings barely covering dividend. Likely a dividend cut on the horizon there.
 
Some of the European banks are hitting 8% yields or higher on their preferred's.

I think they are going to make it out a lot better than the US banks in this case. Might be something for you to look at.
 
Mr Warren Buffett bought a few shares of BAC - he didn't even call me up and ask how my DRIP shares in the file cabinet were doing!

Also a few C shares via a prior DRIP action.

No Washington Mutual though.

Have no idea which to add right now - maybe EGLE if I'm gonna chase yield!

heh heh heh - :cool: After LSU's loss last night and after the KU/MO in Kansas City today - I may have to wait a bit for 'my stock picking ability/crystal ball to start working. And no I don't bet football - just pick a few stocks on cold winter days - once in a while :rolleyes::D.
 
My price target on BAC is 12, if it never gets there and the entire subprime mess reverses and banks make a dramatic reversal then perhaps I will reevaluate my outlook and price, but nothing that has happened from February on has changed my opinion that banks are a total catastrophic investment. Right now I am keeping on eye on that by watching HBAN and seeing if it drops to 10 and if BAC drops below it's multiyear low of 40.

If all is well and these things reverse course there will be plenty of time for me to buy at 50, it is inconceivable to me that the banks stops will just stop and make a reversal like a Google stock.

The banks and Bernake are saying it is getting worse and they don't know where the bottom is, the wisest and most experienced are really in a panic right now and are praying that rate cuts fix all. But how can the Fed cut rates with a collapsing dollar? Bernake knows he is in a pickle right now with all his tools not at his disposal.

My price target of 26-28 on KRE is looking better with every passing week
__________________
 
Check out FUN (Cedar Fair). Current yield is 8% tax deferred. It's a limited partnership. Also check out FGP (Ferrell Gas Partners). It's at 9% right now. It's been paying $2.00 per share for years. It's also tax deferred.
 
Although I track C, BAC, and WM, and consider them well run companies, I have red-flagged them
in my database because I no longer can figure out how much I think they are worth. There is just
too much off-balance-sheet activity and unknown or unrevealed losses for me to have an opinion.

The highest yields of the other stocks I track (and which I consider safe, well-run companies) are
REITs : DRE 7.5% and WRE 5.2%. Both are somewhat lower-growth, but have long records
of increasing dividends and earnings over the years. GGP and KIM pay about 4.3% and have
considerably higher growth rates.
 
redduck said:
post_old.gif
Yesterday, 11:42 PM

No problem, I'll start drinking a better brand of booze (how could I argue that)? But I just copied the very top part of my initial post (see above with the blueish(sp)?-grey area. It does say:
post_old.gif
Yesterday, 11:42 PM (again copied from the original post)
Or, am I reading something incorrectly, or, just misinterpreting it? Wouldn't be the first time.
Click to expand...

redduck,

There's an option somewhere to set what your "timezone" is on the board. The times you see listed on posts are based on this setting - the board software automatically adjusts those dates to be in your local time zone. Since I live in MST, I see your post's time as 4:42 PM, which makes sense since I'm one hour ahead of you.

Probably you have never set that setting, so the board thinks you live in Greenwich Mean Time, which is probably about 9 hours ahead of your PST. To fix this I think you go in under "User CP" somewhere. It should be obvious if you go looking for it.

2Cor521
 
I need to post this to see what day and time I'm doing this. So,
SecondCore521 wish me luck.

Bingo, SecondCore521, I followed you suggestion (see above if anyone else has the same problem as I had). Got the day and the time right.

Got another situation now because REWahoo suggested I change to better brand of booze (I guess to fix the problem or maybe just to not care that I had a problem). Anyhow, the new problem is: I have all this better brand of booze that I no longer have a need for.
 
Last edited:
redduck said:
OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.
Click to expand...

I think dividend yields are an oxymoron of sorts. Here's an example:

Stock XYZ is at $40 and pays a 4% dividend $1.60 for 20 years.

Stock XYZ reveals that the CEO has been lying/cheating/making up numbers, etc. Stock goes down to $20, but NOW has a 8% yield.

Bottom line, did I get any MORE money in my pocket, all things being equal? NO..........

I'm not saying you could not get capital appreciation, be able to buy more, etc. What I am saying is you would get $1.60 a share no matter what the price is, but the YIELD looks good even though the stock may NOT be a good buy for awhile.........;)
 
OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
 
redduck said:
OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
Click to expand...

Sure it can - wouldn't be any fun otherwise - the level of uncertainty priced into the stock is part of that chewy thing referred to as the value premium.

I already own C and BAC in DRIP plans - may buy some more/or not. Also watching WM - having no special expertise/crystal ball - may buy some with any mad money I can scrap up - but not enough confidence to bet the farm - just a little dollar cost averaging over the next seven yrs as a short term holding.

heh heh heh
 
redduck said:
OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
Click to expand...

No....but the fallacy of high dividend yield RATIOS tricks plenty of investors.

Perhaps the damage is done, perhaps not. I believe a lot of banks and firms damaged by the subprime mess will be cutting their dividends.

Do I think some large banks are VALUES now? Yes, but I will buy in over time.

Bottom line? I would rather have a boring stock that cranks out a steady 4%+ than playing the game too aggressively.

In other words, I would rather have MO than C at this point in time, but that's subject to change.......:)
 
My greed and lust meter / kibbutz Buffett radar is also watching WFC, Wells Fargo and USB, US Bancorp.

:D

heh heh heh
 
OK, so look, Washingtion Mutual slashed its dividend by a mere 73%. It's a good thing I don't follow my own logic(?) when it comes to investing. Remember: "Don't chase yield."
 
I must say WM paying a 3% yield (based on it new $.15/quarter rate) looks a lot less interesting than 12% lol. However, if drops to $12 where it is yielding 5% I think starts to look like a value. Of course, I haven't even peaked at the balance sheet so don't take my word.
 
It hasn't been priced yet, but the convertible preferred WM plans to issue might be an interesting way to play it and still collect a good dividend while waiting.
 
I would think that buying high dividend stocks is not for the greedy but the conservative. A good strategy (my opinion) is to find a stock that has historically paid a steady dividend but is temporarily down and buy at that time to lock in a high dividend. As has been pointed out there are a few out there now. If WaMu and Bank of America, etc. and other banks all go down the tubes you are going to have more to worry about than dividend yields.
 
You must log in or register to reply here.

Similar threads

R
Buying More Real Estate + Cash Flow?
Replies
22
Views
1K
MRHARDROCKCAFE
MRHARDROCKCAFE
E
Trying to determine Fed Tax exemption (%) for funds w/V funds
Replies
5
Views
604
eroscott
E
C
Optimizing a Fixed Income Ladder
Replies
16
Views
2K
jazz4cash
J
D
Anyone negotiate a "severance" in non-RIF times?
2
Replies
33
Views
951
dadu007
D
2
MYGA Phishing attempt? (Anyone else asked to 'provide a bank statement'?)
Replies
16
Views
1K
pb4uski
pb4uski

Latest posts

Back
Top Bottom