My start to my 3%-4.5% dividend returns.

[RetireBy90]

VNR from yahoo


Vanguard Natural Resources, LLC
5847 San Felipe
Suite 3000
Houston, TX 77057
United States - Map
Phone: 832-327-2255
Fax: 832-327-2260
Website: http://www.vnrllc.com

Details *
Index Membership: N/A
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Full Time Employees: 110

Business Summary *
Vanguard Natural Resources, LLC, through its subsidiaries, engages in the acquisition and development of oil and natural gas properties in the United States. It owns properties and oil and natural gas reserves primarily located in six operating areas: the Permian Basin in west Texas and New Mexico; the Big Horn Basin in Wyoming and Montana; south Texas; the Williston Basin in North Dakota and Montana; Mississippi; and the Arkoma Basin in Arkansas and Oklahoma. As of March 31, 2012, the company had total proved reserves of 71.9 million barrels of oil equivalent, as well as owned working interests in 1,459 net productive wells. Vanguard Natural Resources, LLC was founded in 2006 and is headquartered in Houston, Texas.

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More on Vanguard Natural Resources, LLC

 

[jayc]

I thought VNR is a company. Yeah it's named Vanguard Natural Resources but it's not a Vanguard fund...

My bad. I was in a hurry and should have known, not 5 characters and does not end in X.

 

[newclown2]

I'm going to grab a small position in it, I'm a risk taker I don't feel good about the money sitting in the bank.

Thanks

 

[rbmrtn]

Are you going to hold this long term ? Natural resources can be volatile. VNR at one point was down almost 30% from it's peak price. So be prepared for price swings

An entry point of around $25 looks good.

 

[haha]

 

[newclown2]

Yes going to hold long term, I don't need this money that I'm going to invest in this. I know we all need money maybe I should'nt be saying that, I'm not new to investing in the market, I've always put 15% of my wages in my 401k here at work. Just funds and LVLT stock options way back when.

Hey we are going to have a major shift on the plant Earth come 12-21-2012 anyways, so go for broke?

My goal is to make an ok dividend payment on my cash, just having it sit in the bank does nothing for me. I'd go with CD's if they paid better.

 

[Nords]

I'm going to grab a small position in it, I'm a risk taker I don't feel good about the money sitting in the bank.

Hey we are going to have a major shift on the plant Earth come 12-21-2012 anyways, so go for broke?
My goal is to make an ok dividend payment on my cash, just having it sit in the bank does nothing for me. I'd go with CD's if they paid better.

Yeah, those all seem like [-]chasing yield[/-] sound asset-allocation assessments to me.

Or maybe you could start from the Bogleheads Wiki on asset allocation (Asset Allocation - Bogleheads), decide what AA works for you, and then pick low-cost assets to fill that plan.

 

[newclown2]

How does this look?

Most of these buys I'll put limit buy orders in for maybe an 1/8th or so south of the ask. Or I'll buy on a daily dip.
I know Ameritrade will want there cut....

Buy 'DOW' 250 shares cost to buy 250 x $29.79 = $7447.50
Annual Dividend $1.28 per share. 250 x $1.28 = $320.00 4.3% gross yield

Buy 'BKH' 250 shares cost to buy 250 x $31.00 = $7750.00
Annual dividend $1.48 per share. 250 x $1.48 = $370.00 4.77% gross yield

Buy 'VNR' 500 shares cost to buy 500 x $28.28 = $14,140.00
Annual dividend $2.40 per share. 500 x $2.40 = $1200.00 8.49% gross yield.

Buy 'Line' 500 shares cost to buy 500 x $39.00 = $19,500.00
Annual dividend $2.90 per share. 500 x $2.90 = $1450.00 7.44% gross yield.

Buy 1-2 ETF's I'm still looking at them....

So for my investment of $48,837.50 i'd gross $3340.00. That's about 6.8% return.

I was thinking I'd start with this, an sit on a large cash position, but I really need to do something with this cash. Letting it sit in a bank does nothing for me. I want to put $150k into the market.

So I've been thinking about an 'EXIT' when the world goes dark for 3 days just in case. You never know.

I'd like to hear where would some of you put/play with money? Not just the market, I'm out on signal family rentals I had 12 at one time. I'd consider built for the purpose multi-family 2+bed rentals.
I always wanted a pizza shack, maybe I can sell her on that being my 'plan'!

Thanks

 

[growing_older]

I've been thinking about adding selected dividend paying stocks to my portfolio. My concerns are how many I need to get adequate diversification and since this is a current hot investing topic, have all the prices been bid up already. I like the idea of controlling costs and with careful buys could keep total expenses under even fund fees.

I guess I also wonder at what size portfolio does it make sense to entertain buying the underlying members of an index (representative ones, perhaps) and push costs below that of funds.

 

[brewer12345]

How about adding some bonds? Moderately junky bonds or bank loans would offer you something like the yields you are looking for and be a lot less risky than equities.

 

[Nords]

... and since this is a current hot investing topic, have all the prices been bid up already.

I've been concerned about that for over a year, which probably means that the low-hanging fruit has already been picked. However you could still buy in for another year or two and not do too badly.

Reading DividendGrowthInvestor.com makes me think that he's only finding ~10 bargain dividend stocks out of over 300 per year, and they probably look pretty shaky.

 

[newclown2]

'Shaky' ok so what 6-10 dividend paying stocks would you invest in? I'll bet you are going to tell me 'ETFs'?

What makes a stock Shaky? I'd like to hear what you are doing?

 

[Nords]

'Shaky' ok so what 6-10 dividend paying stocks would you invest in? I'll bet you are going to tell me 'ETFs'?

Hey, if you want dividend-stock recommendations then I recommend that you read DividendGrowthInvestor.com.

We sold our individual publicly-traded stocks in 2007 except for Berkshire Hathaway, and most of the rest of our portfolio is in ETFs. We still hold a few shares of startup companies as angel investors, and we'll continue to hold those until the companies are acquired or out of business. See the "About Me" tab at Early Retirement & Financial Independence Community - View Profile: Nords

I've tried a bunch of different investing styles in the last decade, and individual stocks are hard work. You haven't talked about where your stock picks fit into your asset allocation or what analysis you've done on their dividends or what your entry/exit criteria will be. One might form the impression that you have $150K burning a hole in your pocket and you're gonna chase yield until you buy the shares.

What makes a stock Shaky?

A dividend stock can be shaky when the company cuts the dividend or when its share price makes the yield unattractive. It can be shaky when a company raises the dividend for a number of years and then skips an increase or two (for whatever reason). It can also be shaky when it's not earning enough to easily cover the dividend payout, or when the company's return on equity is dropping.

I'd like to hear what you are doing?

I've read enough about dividend investing to appreciate having dividend stocks as part of our asset allocation, but it's a lot less work to hold the asset as an ETF.

We've stopped making angel investments. I've educated myself and it's a lot of work. I've learned enough about the process over the last five years to resist the temptation to do more of it when I'm older. Over the next decade we'll probably earn a very lumpy cumulative -50% to +50% on our investments... about the same as a small-cap value ETF only with much higher (uncompensated) risk. Either way the amount of money earned (or lost) won't move the needle much on our ER portfolio.

We're keeping an eye on our asset allocation. We try to hold each of the ETFs and BRK shares between 18-28% of the total (+/- 5 percentage points around 23%). The Dow Dividend ETF is at 23% and the small-cap value ETF is creeping up over 25%. When either one reaches 28% then I'll sell call options on enough shares to rebalance back down to 23%. We're actually sitting at 12% cash right now, which is a lot more than the 8% we prefer to hold. The international value ETF is lagging at 19% so if it goes down below 18% then we'll buy some more. However it didn't drop that low during the worst of the euro debt crisis, so it's going to take an even worse euro crisis or a big runup in the other assets before we'll be putting any cash to work.

My points are:
1. We've put considerable effort into researching how we want to invest and then testing out the various methods,
2. We've put together an asset allocation, and
3. We're sticking to the plan.

 

[Running_Man]

I like Dividend Stocks!
Unlike many of the comments being given here, I do not find most of the dividend stocks I am interested in are overpriced. That is not to say they could not decrease quite a bit from here in a bear market, but relative to other investments I think they are one of the few that make sense. And investing in individual stocks rather than a fund when looking at dividends gives you far greater control over the cash flow of your portfolio versus a dividend fund. Most dividend funds hold stocks that have paid consistent dividends over a long time period until they cut them, by which time the stock has already dropped. I would hope I dropped a stock well before the dividend was cut.

One of the most important decisions in buying a dividend stock is finding a company that is committed to the dividend and present prospects will allow for continued growth in the dividend. A good dividend stock in the past that I just recently sold was Pepsi. Now Pepsi had a CEO who I have doubts about, however the business of Pepsi is one that should support a dividend for a long time. However with the recent decline in the rate of increase of the dividend to 4% and future dividend increases expected of only 4% I thought that stock overpriced at 73 and have moved those funds into Diageo PLC, as a more adult beverage company with far greater potential for future dividend increases, with a bit of Euro concern but less @ 1.25 than @ 1.5 a year ago.

LINN ENERGY LLC
Looking at Linn Energy the specific example you asked about, one of the things Linn has done is hedge all of their natural gas production through 2015, and they have hedged their oil production through 2013, which to me indicates a dividend that is secure through 2014-2015 at a minimum.

However Linn also is subject to wild swings in earnings, which is why they probably have so aggressively gone into hedging, and their earnings predictability has one of the lowest ratings possible on Value Line, along with an average Safety rating either of which would preclude me from investing in this stock. However it does not appear to be overpriced and could be a very good investment, however the speculation side for me is just too great for my conservative nature. My preference in this area is Kinder Morgan (KMP).

STOCKS I LIKE
Achieving 3.5% to 4.0% is the goal of my dividend portfolio and I am also looking for stocks that will grow the dividend at double the inflation rate overall (6-8 percent is my overall portfolio dividend growth plan right now). Since dividends require cash, I project what I expect to see in dividend increases in the future and if those projections are not made, or worst case an expected increase does not happen, that stock stands a very good chance of being replaced. In general the higher yielding the stock the more carefully I will follow the company's future as they are in general also the far slower dividend stocks in my portfolio. The high yielding ones I own right now are AT&T(T), Kinder Morgan (KMP), Altria (MO), Vectron (VVC) I offset those with some lower yielding dividend stocks with dividend growth rates in excess of 10% while still yielding at least 1.5 percent - VF Corp (VFC), Amgen (AMGN), Accenture (ACN), and Diageo PLC (DEO). The remainder of the portfolio is a diversifying tool with average dividends and average 6-8% dividend growth stocks such as Chevron (CHV), Coca Cola (KO), Mc Donalds (MCD), Air Products (APD). What I watch for is not the stock price, as the stock price change in general will not hurt me, but dividend cuts or eliminations would hurt badly.

Good luck

 

[Ed_The_Gypsy]

Would you guys hold a small position in 'LINE' Linn energy? Say like 250 shares up to 500?

LINN ENERGY LLC
Looking at Linn Energy the specific example you asked about, one of the things Linn has done is hedge all of their natural gas production through 2015, and they have hedged their oil production through 2013, which to me indicates a dividend that is secure through 2014-2015 at a minimum.

However Linn also is subject to wild swings in earnings, which is why they probably have so aggressively gone into hedging, and their earnings predictability has one of the lowest ratings possible on Value Line, along with an average Safety rating either of which would preclude me from investing in this stock. However it does not appear to be overpriced and could be a very good investment, however the speculation side for me is just too great for my conservative nature. My preference in this area is Kinder Morgan (KMP).

Try non-MLP versions: LNCO and KMI. The same holdings, less taxes (= no K-1 headaches) and easy to have in an IRA.

And, yes, small positions in both.

 

[MooreBonds]

Try non-MLP versions: LNCO and KMI. The same holdings, less taxes (= no K-1 headaches) and easy to have in an IRA.

And, yes, small positions in both.

I already have a position in LINE. Because of my various other MLP holdings (mostly pipelines), the marginal [-]headache and [/-]cost of [-]sanity[/-] time for adding "just one more MLP" is fairly low.

Also have had KMR for a number of years.

 

[haha]

I already have a position in LINE. Because of my various other MLP holdings (mostly pipelines), the marginal [-]headache and [/-]cost of [-]sanity[/-] time for adding "just one more MLP" is fairly low.

Also have had KMR for a number of years.

Similar for me. I understand the process of tax reporting, and I believe I understand some modestly esoteric aspects of MLP investing. However, I don't want any more of them for several reasons. Number one, all MLPs, no matter what business they are in, are exposed to political whim. To me, it appears that the tides are running against people who take their future into their own hands and use our capital markets well.

Second reason is that MLPs are roach motels. Easy to check in, but after a very few years the tax penalty to exit can be huge. I keep a spreadsheet that keeps an estimated capital gain and ordinary income increment to get out of a position. How many of us modetrate income investors want $40K ordinary income, and $40K LTCG added to our other taxable income in one year? And this is after only a few years of ownership. I have never sold a partial position in an MLP, so I am not sure of the process, but I have been told that selling partial positions is complicated tax wise.

I have only three, and I looked very carefully at the stability and apparent honesty of management and large shareholders. But things do change, though so far, the changes that have come along have for the most part tended to help my positions at least somewhat.

KMI is in a different class, since it is a C-Corp. Anytime I can get a reasonably priced C-Corp that acts as GP for MLPs and thus has IDRs running upstream to it, I want it. Since MLP investors usually are seeking yield, IMO these C-Corps are often much better priced from the buyer's POV than the limited partnerships. Though, if political change damaged the tax status of MLPs, I would guess that their GPs would also suffer.

Ha

 

[jimnjana]

Dividend Growth Investor

I started following his blog/articles last year. I like his thought process, so I guess that might be dangerous. But I am using the dividend income from "High Yielders" and capital gains to build positions in Dividend Growth Stocks within our IRAs. Wish I had come across his blog earlier.

 

[Eladio]

Good Morning,

Several years ago, I started directing my investments towards income and dividend growth. Now, with the lack of income in the bond, CD, Money market accounts, many investors seem to be rushing into any equity that pays a dividend and therefore driving up the prices and lowering yields along the way.

My dividend growth portfolio for anyone interested:

Updated Monthly Dividend Portfolio

However, there are opportunities for investment, especially in the cyclical industrial, energy, and transportation sectors from time to time. Many of these companies offer above average dividend yields, or above average dividend growth, and can be a good value when purchased at the right time.

I regularly use the following web resources:

Seeking Alpha Dividends and Income

Yield Hunter

 

[Eladio]

Dividend Income Portfolio updated for October 2012:

Added:

KMI
NNN
PPL
SCHF

 

[haha]

Dividend Income Portfolio updated for October 2012:

Added:

KMI
NNN
PPL
SCHF

How can you keep track of all these stocks you list? A full time professional analyst would not try. I don't mean these 4, but your entire list.

Ha

 

[Eladio]

@ha

I enjoy keeping up with the market, and researching new ideas. It's not always easy.

Some of the stocks (MCD, EMR, MDT) are long term core holdings that I don't spend much time on. Others, like the small caps require more frequent monitoring.

Eladio

 

[accountingsucks]

Stock tickers: COP, XOM, MO, T, PPL, AEP, DUK, AWF, EXC, FE, PFE, LLY.

Check out www.seekingalpha.com

Exc is not your gramma's utility stock. Very volatile. There is some belief div will be cut after recent q3 call. I think that is baked into price. Sure hope so as i own it.

 

[jimnjana]

Exc is not your gramma's utility stock. Very volatile. There is some belief div will be cut after recent q3 call. I think that is baked into price. Sure hope so as i own it.

The CEO answered a question and mentioned that dividend was secondary to maintaining credit rating. If pricing continued into 2013 it might be necessary to look at dividend if credit rating was in jeopardy. Price got hammered.

 

[accountingsucks]

The CEO answered a question and mentioned that dividend was secondary to maintaining credit rating. If pricing continued into 2013 it might be necessary to look at dividend if credit rating was in jeopardy. Price got hammered.

Yes I read the transcript - not sure if market is already pricing in a cut. Do you own any? I only recently added this and definitely second guessing myself here.