Dividend Stocks?

[SteveR]

For those that use dividends as a significant part of your FIRE incomes, which stocks you own and why?

 

[Nords]

For those that use dividends as a significant part of your FIRE incomes, which stocks you own and why?

DVY has been growing into a significant part of our income. It seems like an easy way to diversify into a 3-4% dividend.

 

[wildcat]

I don't have any recos for you but I were to focus on dividends with some extra money I would do some sort of split between the high yield/dividend growth S&P stocks. For example, MRK yields "x" for the high yield and C yields "x" but has increased its dividend faster than just about any company in the S&P.

Can always go with Vanguard Dividend Growth/Equity Income split. Could always run with the likes of Nords (always in good company ) and do the DVY.

 

[brewer12345]

I have always focused more on high yielding equities in my taxable account, and the all-equity account yields around 4%. I have some non or occasional dividend payors, some low yield, but high growth payors, and some extremely high yielding stuff (STON, EGLE, and until recently SPH). I've looked at TMA (waiting for price = book value, if ever). If the market for junk bonds ever gets rational, I would add some selected names too.

 

[ShokWaveRider]

I have always focused more on high yielding equities in my taxable account, and the all-equity account yields around 4%. I have some non or occasional dividend payors, some low yield, but high growth payors, and some extremely high yielding stuff (STON, EGLE, and until recently SPH). I've looked at TMA (waiting for price = book value, if ever). If the market for junk bonds ever gets rational, I would add some selected names too.

Does Vanguard have a mututal fund that is exclusive to high yielding stocks?

SWR

 

[brewer12345]

Does Vanguard have a mututal fund that is exclusive to high yielding stocks?

SWR

I don't know, but I would be surprised if that weren't the case.

BTW, I have also looked at HPF and some of the REIT preferreds look potentially attractive, if that is your bag.

 

[wabmester]

Does Vanguard have a mututal fund that is exclusive to high yielding stocks?

No. But if you look at most of the high-yield dividend funds, I think you'll find that they are thinly disguised sector funds for the most part. Utilities and Financial sectors.

 

[Gonzo]

I use Alpine Dynamic Dividend Fund (ADVDX) in my taxable account for dividends... M* lists it's current yield at 10.78%... ER at 1.35.

Gonzo

 

[wabmester]

I use Alpine Dynamic Dividend Fund (ADVDX) in my taxable account for dividends... M* lists it's current yield at 10.78%... ER at 1.35.

It looks like their high yield comes mostly from FNF (with a 27.93% yield!).   Anybody know anything about FNF?   Was that a one-time dividend or something?

Edit:  Hmm, they have some other interesting holdings:  take a look at FRO.    Spooky.

Another edit: Some individually risky issues, but that's not to say this is a bad approach. The fund looks well diversified, and that's a good reason to go with a fund like this over any of their individual holdings.

 

[renferme]

own FRT, EOP, ASN, NNN, GE, MO, HCP, USB, NYB, XOM, SLE, and some others.
many or all increase dividends yearly for many years.
XOM because I want to own oil (if you can't beat 'em, join 'em),
REITS for the dividends.
GE because it's a great company
MO because it's a great company that continually raises dividends.
USB and NYB because I wanted to diversify into banking
.
Dividend stocks tend to help reduce losses in a down market.
And I need the income they provide.

 

[uncledrz]

Few other thoughts, although not yet retired so not living on the income
aso, bac, aep, fpl, pgn, so, umh.

Problem is that dividend stocks now getting too much attention which effects yields.

 

[dougdo]

I own some NEW which is a REIT which does subprime mortgages. Its paying a very hefty 15%(!) dividend right now. Unfortunately it's a little risky--if the housing bubble pops your capital is at risk. When I first bought it I made a substantial capital gain as well but it has since dropped back to where I bought it.

I'm wondering what others think of this stock? I bought it after a Jubak recommendation on msn money.

 

[wildcat]

May want to PM Brewer on that one. As you said it is probably in the riskiest REIT sector and I would prefer something with more stability. Better REIT plays if you ask me but I don't like the sector as a whole.

 

[markplus4]

I love to get paid to wait....1) PCU - Copper co with a PE less than 5, and an 8+% yield.   Analysts have been predicting the demise of copper prices for over a year now.  They've been wrong and I believe will continue to be wrong.  Not for the faint of heart. though... 2) DRL - Puerto Rican bank with 5% yield and a single digit PE.  Restating earnings on I/O strips, but it's baked into the price IMHO.  $14 down from $40+ a yr ago.   
As always, do your own DD.

 

[eyetri2]

Someone asked about FNF and the 28% yield. They are doing a spin off and returned $10/share as capital back to shareholders. Yahoo used to have it right in terms of projected dividend yield for the next 12 months. Now they screwed things up and do the last 12 months, giving things like 28% yields! Ugh!

As for my investment ideas, the core part:

Has to have a dividend.

Where is it in its range of historical yield? Like people look at historical P/E, I look at dividend. Geraldine Weiss changed my life with that one. I do not subscribe to their investment report, but you can look at iqtrends.com to see a free copy and its simplicity. I now look at hundreds of stocks which are "undervalued" but not in their strict guidelines of 25 years of paying dividends.

Does the company increase their dividend? Very important to me, since my goal is to live off my dividends. If they increase it, I assume I can keep up with inflation and not touch the principal.

Then I do my own screens. 19 stocks ( a little too many, I admit). Biggest holding - NFI - very volatile and I'm down even with reinvested dividends, but this isn't a sprint. Also, don't forget because it's a REIT it is taxed as ordinary income, not the 15% dividend rate.

Other holdings - everything from Citigroup to Claire's to Fedex. Of my "favorites" (and we all know we shouldn't marry any stock):

WM - increase divi every quarter, some other banks do that now too
MO - big stable divi, and hopefully a 3 way break up of the company. Was stupid early in selling some in the high 20's, but I still have some and have done well.
MNT - approved for silicone breast implants again. Nothin' wrong with that.
CLE - teeny boppers paying for fake jewelry, tons of cash on their books. Not a home run stock, but definitely consistent singles every year.

If I had to pick only two stocks for a begining investor, it would be DVY and PEY. DVY for the large caps, PEY for the small/mid caps who know it is important to increase divies. You increase the dividend, to me it's saying the company is stable and looks good for the future.

eyetri2

 

[brewer12345]

Dirfference of opinion makes a market, but I personally wouldn't touch NFI or IMH with someone else's 10 foot stick. Both of those guys are extremely highly levered and do a huge amount of interest only subprime mortgages, with a heavy concentration in CA. NFI is even spookier because they use gain-on-sale accounting and are constantly aying out more cash than they get at the time of sale/securitization. The slightest hiccup in the subprime world, the capital markets, or the housing markets and you can kiss them goodbye.

I also wouldn't touch DRL. How shall I put this? Those clowns should be selling hot dogs on a street corner, not running a bank.

If you like mortgage REITs, there are plenty of mostly prime or commercial mortgage REITs out there that are far less risky than INH or NFI. Likewise, there are plenty of banks less risky than DRL. I'm less than impressed with how they managed to cripple themselves, but NYB is probably a more than reasonable choice if you are mostly buying for the dividends. My tase runs a lot smaller in banks than WM, but there are worse choices.

 

[Dawg52]

I believe Unclemick2 would say......"pssst Wellesley". 

 

[unclemick]

Yep

Don't own Wellesley - but have 6 of their top ten stock holdings in my putz portfolio and keep waiting for FPL - Florida Power and Light to get cheaper.

 

[CyclingInvestor]

I have been FI for about 1.5 years. The RE will happen in the next 0 to 3 years (at age 47-49).

I have most of my portfolio in top-quality equity REITs, which generate
enough dividends for me to comfortably live on once I stop working. I
currently own CNT, DRE, GGP, KIM, VNO, WRE. The remainder is in
an index fund in my 401k, and will probably move to SPY/DVY once I
retire. My portfolio has been structured this way since 1998, when I
first started thinking about FIRE (and REITs were a far juicier choice).
My REIT mix has slowly drifted towards higher quality and growth,
lower relative yields, and most importantly top quality management
(in my judgement) over the years.

I second the opinions of those above about mortgage REITs, especially
those with exotic strategies such as NFI. These are concentration-intense
investments, exactly what I try to avoid. I am sure some people are
making (and losing) large sums of money on these, but I will never be
one of them.

 

[wildcat]

Cycle -

Agree. If I were to own the individual names in REITs I would focus on quality and management.

 

[brewer12345]

Cycling, check out STON (which I own). Looks to me like it is basically a REIT, and pays a high, tax deferred distribution in return for a certain amount of PITA at tax time.

 

[CyclingInvestor]

I cannot really evaluate STON because it is so new (at least in terms
of being a public company). I like at least 5-10 years of track record to
analyze how management responds to different market conditions (and
explains them to shareholders, if the actions need explaining), to watch
balance sheet drift, etc. While this might cause me to miss out on some
big gains early (ARE) on companies that I later like, it also keeps me
out of those that seem like they should work (CEI), but end up with
problems. At this point in my investing career, I only need to keep hitting
singles, and do not need the risk associated with possible home runs.

 

[wabmester]

I believe Unclemick2 would say......"pssst Wellesley". 

I really don't understand the love of Wellesley on this forum.   Is this a running joke or something?   I think TH (may he RIP) originally brought this up as a rock-solid 4%-dividend fund.   It's a 60% bond fund, folks!   Those "dividends" are mostly bond interest.   That's not what we're talking about here.

 

[wildcat]

Cycling, check out STON (which I own).  Looks to me like it is basically a REIT, and pays a high, tax deferred distribution in return for a certain amount of PITA at tax time.

As we die Brew profits.  Guy has his hand in everything. Edit - I'm jealous

 

[Dawg52]

I really don't understand the love of Wellesley on this forum.   Is this a running joke or something?   I think TH (may he RIP) originally brought this up as a rock-solid 4%-dividend fund.   It's a 60% bond fund, folks!   Those "dividends" are mostly bond interest.   That's not what we're talking about here.

Yes... it was meant to be a funny. I sure am sorry to have irritated you.