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Beat up companies with great dividends?
Old 03-08-2020, 10:59 AM   #1
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Beat up companies with great dividends?

I’m plenty long on tech, have sufficient short term bond, CD and cash, and looking to rebalance a bit, but don’t like pure play bonds.

Given the current circumstances, what are some great companies that have been beat up badly, and have, accordingly incredible dividends?

Example: ATT (T) is about 5.6% ... or, Macy’s (M) at 13%?
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Old 03-08-2020, 11:19 AM   #2
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Seadrill once paid a great dividend and was pretty beat up. Just saying.

You mention AT&T.

What happens when Starlink comes about and disrupts the current cell phone tower way of doing things?
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Old 03-08-2020, 11:32 AM   #3
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Fermion,

Sure ... good points, but I am less interested in the horrible what ifs than the possible dividends payable so over the next 10 years ...

There are pretty significant data throughput issues with space based solutions, as well, but that’s another topic ...
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Old 03-08-2020, 11:32 AM   #4
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At some point this will run its course. Look for companies with little/no debt in industries with good long term demographics. Even if everyone is a loser (for a period of time, e.g. because of an economic downturn), eventually there will be winners.

This was true after stagflation of the 70's, the dot com crash, and the 08/09 super recession. In these times of 'stress', the weak get crushed and the strong get stronger.

I think we are still early in the cycle, and quite frankly if we somehow someway did a quick run up from here it would likely be without me increasing my exposure (although I have been selectively buying).

After selling a bunch of stuff in earlier, my recent purchases have been:
ABBV - good cash flow, slight anti-virus drug play
TMO - Fisher Scientific - gotta believe lots of their diagnostic stuff is being ordered/sold and the CDC emergency guidelines are using their "TaqPath™ 1-Step RT-qPCR Master Mix" (sold by TMO).
IAU - Gold is going up from here. While people keep thinking demand contraction is deflationary, disruptions to supply lines and alternate sourcing is inflationary...as is the soon to be seen monetary and fiscal responses.

I'm all ears in terms of other possibilities - what things should be on my watch list?
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Old 03-08-2020, 11:45 AM   #5
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Originally Posted by stephenson View Post
Iím plenty long on tech, have sufficient short term bond, CD and cash, and looking to rebalance a bit, but donít like pure play bonds.

Given the current circumstances, what are some great companies that have been beat up badly, and have, accordingly incredible dividends?

Example: ATT (T) is about 5.6% ... or, Macyís (M) at 13%?
Macy's.you want to .take a flyer on retail and not only that, retail that makes more money when people are actually in the store which is certainly true of Macy's. I'd need a ten foot pole for that stock.

The market drove Bon Ton stock to a penny stock before it final merciful death.
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Old 03-08-2020, 12:08 PM   #6
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Macy's.you want to .take a flyer on retail and not only that, retail that makes more money when people are actually in the store which is certainly true of Macy's. I'd need a ten foot pole for that stock.

The market drove Bon Ton stock to a penny stock before it final merciful death.
Not commenting on Macy's directly (because I don't follow it closely). But stay far away from companies with significant debt. Just because treasury bonds are going up up up (i.e. rates down) does not mean that is true or will be true for high yield (or even investment grade) debt. We are now seeing credit spreads widen significantly. (Disclaimer: I even attempted to short HYG last week - unsuccessfully (but that is another story)). The weak may soon be unable to borrow in the debt markets.
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Old 03-08-2020, 12:31 PM   #7
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Carnival (CCL), 7.37% dividend.
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Old 03-08-2020, 12:46 PM   #8
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Carnival (CCL), 7.37% dividend.
Yeah that is a great one. Wonder what their coverage ratio will be on that level of dividend next quarter...
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Old 03-08-2020, 12:53 PM   #9
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I'd held Altria, MO, for years only to sell it off last year. At $42.15 its yield is 7.65%.
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Old 03-08-2020, 01:22 PM   #10
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Main Street Capital (MAIN) is paying 6.51%.
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Old 03-08-2020, 01:49 PM   #11
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The Efficient Market Hypothesis is a pretty good place to start with questions like this.
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Old 03-08-2020, 02:09 PM   #12
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I'm normally a pure index investor, but I am getting really intrigued by energy company yields.

Exxon Mobile at 7.3%?
BP at 8%?
Royal Dutch Shell at 9%

These companies not going to go out of business. I wonder about the sustainability of their dividends.

Some of the energy ETFs that have strong XOM and related holdings are pretty interesting as well. 8% yields.

Hmmmm....may even get me to jump in.
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Old 03-10-2020, 07:05 PM   #13
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Some great suggestions in this thread. Have to agree with ABBV, MO, T, and XOM...all dividend aristocrats, battle-tested through wars, 9/11, dot-com bust, the great recession...and continue to annually raise their dividends through it all.
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Old 03-11-2020, 06:04 AM   #14
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Buying NTR, CRWS, and JPC..... jmho
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Old 03-11-2020, 06:57 AM   #15
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PFE - Pfizer - paying 4.5% and has held up in recent turbulence. Bought some more last week and still about even in price.

Cisco at 3.5%
and Exxon at 8.5% might buy a small position.
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Old 03-11-2020, 09:08 AM   #16
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I have my eyes on the Canadian banks and will likely make an investment after they drop another 20-25%. I would stay clear of retail, energy, mall REITS, and industrial stocks. There was news crossing the wire this morning that Boeing is having liquidity problems and have drawn down their entire bank loan. There is no way that they can issue more debt to pay their dividends. The same issue hold for Exxon Mobile. They have to sell assets or issue more debt to pay their dividend.
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Old 03-12-2020, 08:39 PM   #17
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I am holding on to my T, but I was tempted to sell today, as it was my only holding still in the black. Too late now, so I will stay the course... It is my largest position.

I am now looking into MO (they have maintained dividend growth for 50 years), PG (63 years), O (26 years) and EPR (10 years). All of them severely beat up as of this writing.
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Old 03-12-2020, 08:42 PM   #18
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T is the only individual stock I own, everything else is an ETF of some sort. I am hanging on to T since it was beaten down even before the "crash" and it has Elliott Management guiding the financial performance, and I am reasonably confident it will do fine.
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Old 03-13-2020, 06:12 AM   #19
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Oil held up in the past due to supply and demand. Now the world is awash in oil and we are starting to get traction on electric vehicles. Maybe, who knows.
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Old 03-13-2020, 06:41 AM   #20
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It seems like years ago, but a few days ago? I posted a google sheet with SP 500 holdings and their change since a given date (set up with 2/18/20 but this change be changed).

I've updated the sheet to reflect the current SP 500 constituents. As with the start date, you can also add/remove/change these.

I also added a column to retrieve from yahoo finance the dividend rate (I believe yahoo updates those daily). Google sheets api does not provide a direct api to obtain the dividend or yield, thus the requirement to retrieve the data from Yahoo Finance. Unfortunately, the yahoo finance lookup is very very slow.

If anyone has a way to improve the dividend/yield calculation (or data retrieval), please post it. And of course, keep those investment ideas coming. I am looking for companies with good long term prospects whose balance sheet is strong and who have a low payout ratio.

Here's the sheet: https://docs.google.com/spreadsheets...it?usp=sharing
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