Dividend Stocks Quotes

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The true investor . . . will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.
John C. Bogle (The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits 21))
Wisdom is really the key to wealth. With great wisdom, comes great wealth and success. Rather than pursuing wealth, pursue wisdom. The aggressive pursuit of wealth can lead to disappointment. Wisdom is defined as the quality of having experience, and being able to discern or judge what is true, right, or lasting. Wisdom is basically the practical application of knowledge. Rich people have small TVs and big libraries, and poor people have small libraries and big TVs. Become completely focused on one subject and study the subject for a long period of time. Don't skip around from one subject to the next. The problem is generally not money. Jesus taught that the problem was attachment to possessions and dependence on money rather than dependence on God. Those who love people, acquire wealth so they can give generously. After all, money feeds, shelters, and clothes people. They key is to work extremely hard for a short period of time (1-5 years), create abundant wealth, and then make money work hard for you through wise investments that yield a passive income for life. Don't let the opinions of the average man sway you. Dream, and he thinks you're crazy. Succeed, and he thinks you're lucky. Acquire wealth, and he thinks you're greedy. Pay no attention. He simply doesn't understand. Failure is success if we learn from it. Continuing failure eventually leads to success. Those who dare to fail miserably can achieve greatly. Whenever you pursue a goal, it should be with complete focus. This means no interruptions. Only when one loves his career and is skilled at it can he truly succeed. Never rush into an investment without prior research and deliberation. With preferred shares, investors are guaranteed a dividend forever, while common stocks have variable dividends. Some regions with very low or no income taxes include the following: Nevada, Texas, Wyoming, Delaware, South Dakota, Cyprus, Liechtenstein, Luxembourg, Panama, San Marino, Seychelles, Isle of Man, Channel Islands, Curaçao, Bahamas, British Virgin Islands, Brunei, Monaco, Qatar, United Arab Emirates, Saudi Arabia, Bahrain, Bermuda, Kuwait, Oman, Andorra, Cayman Islands, Belize, Vanuatu, and Campione d'Italia. There is only one God who is infinite and supreme above all things. Do not replace that infinite one with finite idols. As frustrated as you may feel due to your life circumstances, do not vent it by cursing God or unnecessarily uttering his name. Greed leads to poverty. Greed inclines people to act impulsively in hopes of gaining more. The benefit of giving to the poor is so great that a beggar is actually doing the giver a favor by allowing the person to give. The more I give away, the more that comes back. Earn as much as you can. Save as much as you can. Invest as much as you can. Give as much as you can.
H.W. Charles (The Money Code: Become a Millionaire With the Ancient Jewish Code)
Basically, CEOs have five essential choices for deploying capital—investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, or repurchasing stock—and three alternatives for raising it—tapping internal cash flow, issuing debt, or raising equity. Think of these options collectively as a tool kit. Over the long term, returns for shareholders will be determined largely by the decisions a CEO makes in choosing which tools to use (and which to avoid) among these various options. Stated simply, two companies with identical operating results and different approaches to allocating capital will derive two very different long-term outcomes for shareholders.
William N. Thorndike Jr. (The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success)
Morgan then formed the U.S. Steel Corporation, combining Carnegie’s corporation with others. He sold stocks and bonds for $1,300,000,000 (about 400 million more than the combined worth of the companies) and took a fee of 150 million for arranging the consolidation. How could dividends be paid to all those stockholders and bondholders? By making sure Congress passed tariffs keeping out foreign steel; by closing off competition and maintaining the price at $28 a ton; and by working 200,000 men twelve hours a day for wages that barely kept their families alive. And so it went, in industry after industry—shrewd, efficient businessmen building empires, choking out competition, maintaining high prices, keeping wages low, using government subsidies. These industries were the first beneficiaries of the “welfare state.
Howard Zinn (A People's History of the United States: 1492 to Present)
The stock holders in the quarry were the SS and the leaders of the Nazi party. The blood of the slaves were their dividends, and the fat grew rich on human misery.
Tom Hofmann (Benjamin Ferencz, Nuremberg Prosecutor and Peace Advocate)
We don’t talk about sex for the same reason we don’t talk about stock dividends: we have very little of it.
Ali Hazelwood (The Love Hypothesis)
automatically compound. If you need cash, you can sell stock and pay capital gains tax at a lower rate than a dividend would be taxed.
Daniel Pecaut (University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting)
Do not trust historical data—especially recent data—to estimate the future returns of stocks and bonds. Instead, rely on interest and dividend payouts and their growth/failure rates.
William J. Bernstein (The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between)
Reliability investing requires finding companies trading below their inherent worth--stocks with strong fundamentals including earnings, dividends, book value, and cash flow selling at bargain prices give their quality.
Ini-Amah Lambert (Cracking the Stock Market Code: How to Make Money in Shares)
SHAREHOLDERS’ EQUITY has two components: CAPITAL STOCK: The original amount of money the owners contributed as their investment in the stock of the company. RETAINED EARNINGS: All the earnings of the company that have been retained, that is, not paid out as dividends to owners.
Thomas R. Ittelson (Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports)
Basically, CEOs have five essential choices for deploying capital—investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, or repurchasing stock—and three alternatives for raising it—tapping internal cash flow, issuing debt, or raising equity.
William N. Thorndike Jr. (The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success)
Discounted Cash Flow The discounted cash flow method of valuation is the most sophisticated (and the most difficult) method to use in valuing the business. With this method you must estimate all the cash influxes to investors over time (dividends and ultimate stock sales) and then compute a “net present value” using an assumed discount rate (implied interest rate).
Thomas R. Ittelson (Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports)
company and for similar companies in the same industry. • The percentage of institutional ownership. The lower the better. • Whether insiders are buying and whether the company itself is buying back its own shares. Both are positive signs. • The record of earnings growth to date and whether the earnings are sporadic or consistent. (The only category where earnings may not be important is in the asset play.) • Whether the company has a strong balance sheet or a weak balance sheet (debt-to-equity ratio) and how it’s rated for financial strength. • The cash position. With $16 in net cash, I know Ford is unlikely to drop below $16 a share. That’s the floor on the stock. SLOW GROWERS • Since you buy these for the dividends (why else would
Peter Lynch (One Up On Wall Street: How To Use What You Already Know To Make Money In)
Far am I from denying in theory, full as far is my heart from withholding in practice, (if I were of power to give or to withhold,) the real rights of men. In denying their false claims of right, I do not mean to injure those which are real, and are such as their pretended rights would totally destroy. If civil society be made for the advantage of man, all the advantages for which it is made become his right. It is an institution of beneficience; and law itself is only beneficience acting by a rule. Men have a right to live by that rule; they have a right to do justice, as between their fellows, whether their fellows are in public function or in ordinary occupation. They have a right to the fruits of their industry, and to the means of making their industry fruitful. They have a right to the acquisitions of their parents; to the nourishment and improvement of their offspring; to instruction in life, and to consolation in death. Whatever each man can separately do, without trespassing upon others, he has a right to do for himself; and he has a right to a fair portion of all which society, with all its combinations of skill and force, can do in his favor. In this partnership all men have equal rights; but not to equal things. He that has but five shillings in the partnership, has as good a right to it, as he that has five hundred pounds has to his larger proportion. But he has not a right to an equal dividend in the product of the joint stock; and as to the share of power, authority, and direction which each individual ought to have in the management of the state, that I must deny to be amongst the direct original rights of man in civil society; for I have in my contemplation the civil social man, and no other. It is a thing to be settled by convention.
Edmund Burke (Reflections on the Revolution in France)
To that end, he said, the city formed a holding company that acquired 51 percent of the stock of all the casinos in the city, in the hopes of collecting dividends. “But it was a mistake: the casinos funneled the money out in cash and reported losses every time,” Putin complained. “Later, our political opponents tried to accuse us of corruption because we owned stock in the casinos. That was just ridiculous…. Sure, it may not have been the best idea from an economic standpoint. Judging from the fact that the setup turned out to be inefficient and we did not attain our goals, I have to admit it was not sufficiently thought through. But if I had stayed in Petersburg, I would have finished choking those casinos. I would have made them share.
Masha Gessen (The Man Without a Face: The Unlikely Rise of Vladimir Putin)
Statisticians say that stocks with healthy dividends slightly outperform the market averages, especially on a risk-adjusted basis. On average, high-yielding stocks have lower price/earnings ratios and skew toward relatively stable industries. Stripping out these factors, generous dividends alone don’t seem to help performance. So, if you need or like income, I’d say go for it. Invest in a company that pays high dividends. Just be sure that you are favoring stocks with low P/Es in stable industries. For good measure, look for earnings in excess of dividends, ample free cash flow, and stable proportions of debt and equity. Also look for companies in which the number of shares outstanding isn’t rising rapidly. To put a finer point on income stocks to skip, reverse those criteria. I wouldn’t buy a stock for its dividend if the payout wasn’t well covered by earnings and free cash flow. Real estate investment trusts, master limited partnerships, and royalty trusts often trade on their yield rather than their asset value. In some of those cases, analysts disagree about the economic meaning of depreciation and depletion—in particular, whether those items are akin to earnings or not. Without looking at the specific situation, I couldn’t judge whether the per share asset base was shrinking over time or whether generally accepted accounting principles accounting was too conservative. If I see a high-yielder with swiftly rising share counts and debt levels, I assume the worst.
Joel Tillinghast (Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing (Columbia Business School Publishing))
We want to build up a new state! That is why the others hate us so much today. They have often said as much. They said: “Yes, their social experiment is very dangerous! If it takes hold, and our own workers come to see this too, then this will be highly disquieting. It costs billions and does not bring any results. It cannot be expressed in terms of profit, nor of dividends. What is the point?! We are not interested in such a development. We welcome everything which serves the material progress of mankind insofar as this progress translates into economic profit. But social experiments, all they are doing there, this can only lead to the awakening of greed in the masses. Then we will have to descend from our pedestal. They cannot expect this of us.” And we were seen as setting a bad example. Any institution we conceived was rejected, as it served social purposes. They already regarded this as a concession on the way to social legislation and thereby to the type of social development these states loathe. They are, after all, plutocracies in which a tiny clique of capitalists dominate the masses, and this, naturally, in close cooperation with international Jews and Freemasons. If they do not find a reasonable solution, the states with unresolved social problems will, sooner or later, arrive at an insane solution. National Socialism has prevented this in the German Volk. They are now aware of our objectives. They know how persistently and decisively we defend and will reach this goal. Hence the hatred of all the international plutocrats, the Jewish newspapers, the world stock markets, and hence the sympathy for these democrats in all the countries of a like cast of mind. Because we, however, know that what is at stake in this war is the entire social structure of our Volk, and that this war is being waged against the substance of our life, we must, time and time again in this war of ideals, avow these ideals. And, in this sense, the Winterhilfswerk, this greatest social relief fund there is on this earth, is a mighty demonstration of this spirit. Adolf Hitler - speech at the Berlin Sportpalast on the opening of the Kriegswinterhilfswerk September 4, 1940
Adolf Hitler
The performance of the American stock market is perhaps best measured by comparing the total returns on stocks, assuming the reinvestment of all dividends, with the total returns on other financial assets such as government bonds and commercial or Treasury bills, the last of which can be taken as a proxy for any short-term instrument like a money market fund or a demand deposit at a bank. The start date, 1964, is the year of the author’s birth. It will immediately be apparent that if my parents had been able to invest even a modest sum in the US stock market at that date, and to continue reinvesting the dividends they earned each year, they would have been able to increase their initial investment by a factor of nearly seventy by 2007. For example, $10,000 would have become $700,000. The alternatives of bonds or bills would have done less well. A US bond fund would have gone up by a factor of under 23; a portfolio of bills by a factor of just 12. Needless to say, such figures must be adjusted downwards to take account of the cost of living, which has risen by a factor of nearly seven in my lifetime. In real terms, stocks increased by a factor of 10.3; bonds by a factor of 3.4; bills by a factor of 1.8.
Niall Ferguson (The Ascent of Money: A Financial History of the World)
It nevertheless remains true that, in most countries for which long-run data are available, stocks have out-performed bonds – by a factor of roughly five over the twentieth century.9 This can scarcely surprise us. Bonds, as we saw in Chapter 2, are no more than promises by governments to pay interest and ultimately repay principal over a specified period of time. Either through default or through currency depreciation, many governments have failed to honour those promises. By contrast, a share is a portion of the capital of a profit-making corporation. If the company succeeds in its undertakings, there will not only be dividends, but also a significant probability of capital appreciation. There are of course risks, too. The returns on stocks are less predictable and more volatile than the returns on bonds and bills. There is a significantly higher probability that the average corporation will go bankrupt and cease to exist than that the average sovereign state will disappear. In the event of a corporate bankruptcy, the holders of bonds and other forms of debt will be satisfied first; the equity holders may end up with nothing. For these reasons, economists see the superior returns on stocks as capturing an ‘equity risk premium’ – though clearly in some cases this has been a risk well worth taking.
Niall Ferguson (The Ascent of Money: A Financial History of the World)
A good rule of thumb is to never, ever pay more than 15 years fair rental value for any residence.c This computes out to a 6.7 percent (1/15th) gross rental dividend, or 3.7 percent after taxes, insurance, and maintenance, which is about what you might expect from a mixed portfolio of stocks and bonds.
William J. Bernstein (The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between)
So, how can you figure out the dividend yield? It’s easy! Simply divide the number of dividends paid to you ($100) by the amount you have invested in the stock ($10,000). After dividing these figures, you will come up with a dividend yield of 1%.
Millionaire Mob (Dividend Investing Your Way to Financial Freedom: A Guide to Live Off Dividends Forever)
It costs more to transact abroad, and many foreign governments tax stock dividends; although you can recover this cost in a taxable account through the foreign tax credit on your U.S. tax return, you cannot do so in a retirement account.
William J. Bernstein (The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between)
Perhaps there is no better illustration of the ethical impotency of the modern church than its failure to deal with the evils and ethical problems of stock manipulation. Millions in property values are created by pure legerdemain. Stock dividends, watered stock and excessive rise in stock values, due to the productivity of the modern machine, are accepted by the church without murmur if only a slight return is made by the beneficiaries through church philanthropies [1927].
Reinhold Niebuhr
We find stories more convincing than statistics. Academic studies tell us that value stocks—those shares that are cheap based on market yardsticks like price-earnings ratios and dividend yield—outperform growth stocks, despite the latter’s rapidly increasing earnings and sales. But academic studies are no competition for a good story: We are still drawn to hot growth companies with their slick innovations and adoring customers.
Jonathan Clements (How to Think About Money)
You’re a business owner, not a stock trader.
Jason Fieber (The Dividend Mantra Way: Achieving Financial Independence By Living Below Your Means And Investing In Dividend Growth Stocks)
Each ran a highly decentralized organization; made at least one very large acquisition; developed unusual, cash flow–based metrics; and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder, and skepticism from their peers and the business press. All also enjoyed eye-popping, credulity-straining performance over very long tenures (twenty-plus years on average).
William N. Thorndike Jr. (The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success)
Graham’s timeless lesson for the intelligent investor, as valid today as when he prescribed it in his first edition, is clear: “the real money in investment will have to be made—as most of it has been made in the past—not out of buying and selling but of owning and holding securities, receiving interest and dividends and increases in value.” His
John C. Bogle (The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits 21))
Contrarily, for those who invest and then drop out of the game and never pay a single unnecessary cost, the odds in favor of success are awesome. Why? Simply because they own businesses, and businesses as a group earn substantial returns on their capital and pay out dividends to their owners. Yes, many individual companies fail. Firms with flawed ideas and rigid strategies and weak managements ultimately fall victim to the creative destruction that is the hallmark of competitive capitalism, only to be succeeded by others.3 But in the aggregate, businesses grow with the long-term growth of our vibrant economy.
John C. Bogle (The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits 21))
An equity investor buys and holds the shares of stock in a company in anticipation of dividends and/or capital gains.
Jigar Patel (NRI Investments and Taxation: A Small Guide for Big Gains)
In the early years, top incomes were derived from capital, and the richest people were what Piketty and Saez call “coupon clippers,” who received most of their incomes from dividends and interest. The fortunes underlying these receipts were eroded over the century by increasingly progressive income and estate taxes. Those who used to live off their (or their ancestors’) fortunes have been replaced at the top by earners, people like CEOs of large firms, Wall Street bankers, and hedge fund managers, who receive their incomes as salaries, bonuses, and stock options. Entrepreneurial
Angus Deaton (The Great Escape: Health, Wealth, and the Origins of Inequality)
Evade purchasing stocks which purely look like a bargain.
James Moore (Investing for Beginners: A Short Read on the Basics of Investing and Dividends)
Blue-chip stocks are a reasonable investment for the elderly investor because they usually pay cash dividends which the retired person may need to live on, and are usually more conservative than other investments, excluding bonds. Holdings in these stocks should be long-term to avoid trading costs and speculation.
Phillip B. Chute (Stocks, Bonds & Taxes: A Comprehensive Handbook and Investment Guide for Everybody)
To fill this gap in the capital market, Davis and Rock set themselves up as a limited partnership, the same legal structure that had been used by a short-lived rival called Draper, Gaither & Anderson.[18] Rather than identifying startups and then seeking out corporate investors, they began by raising a fund that would render corporate investors unnecessary. As the two active, or “general,” partners, Davis and Rock each seeded the fund with $100,000 of their own capital. Then, ignoring the easy loans to be had from the fashionable SBIC structure, they raised just under $3.2 million from some thirty “limited” partners—rich individuals who served as passive investors.[19] The beauty of this size and structure was that the Davis & Rock partnership now had a war chest seven and a half times larger than an SBIC, and with it the ammunition to supply companies with enough capital to grow aggressively. At the same time, by keeping the number of passive investors under the legal threshold of one hundred, the partnership flew under the regulatory radar, avoiding the restrictions that ensnared the SBICs and Doriot’s ARD.[20] Sidestepping yet another weakness to be found in their competitors, Davis and Rock promised at the outset to liquidate their fund after seven years. The general partners had their own money in the fund, and thus a healthy incentive to invest with caution. At the same time, they could deploy the outside partners’ capital for a limited time only. Their caution would be balanced with deliberate aggression. Indeed, everything about the fund’s design was calculated to support an intelligent but forceful growth mentality. Unlike the SBICs, Davis & Rock raised money purely in the form of equity, not debt. The equity providers—that is, the outside limited partners—knew not to expect dividends, so Davis and Rock were free to invest in ambitious startups that used every dollar of capital to expand their business.[21] As general partners, Davis and Rock were personally incentivized to prioritize expansion: they took their compensation in the form of a 20 percent share of the fund’s capital appreciation. Meanwhile, Rock was at pains to extend this equity mentality to the employees of his portfolio companies. Having witnessed the effect of employee share ownership on the early culture of Fairchild, he believed in awarding managers, scientists, and salesmen with stock and stock options. In sum, everybody in the Davis & Rock orbit—the limited partners, the general partners, the entrepreneurs, their key employees—was compensated in the form of equity.
Sebastian Mallaby (The Power Law: Venture Capital and the Making of the New Future)
Two lists of potentially attractive stocks for covered writing are the 30 stocks making up the Dow Jones industrial average and the stocks in the S&P 500 Dividend Aristocrats index mentioned in Chapter 4.
Kevin Simpson (Walk Toward Wealth: The Two Investing Strategies Everyone Should Know)
Wealth grew more concentrated during his reign. Before Welch, corporate profits were largely reinvested in the company or paid out to workers rather than sent back to stock owners. In 1980, American companies spent less than $50 billion on buybacks and dividends. By the time of Welch’s retirement, a much greater share of corporate profits was going to investors and management, with American companies spending $350 billion on buybacks and dividends in 2000.
David Gelles (The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy)
General Electric was the largest company in the world in 2004, worth a third of a trillion dollars. It had either been first or second each year for the previous decade, capitalism’s shining example of corporate aristocracy. Then everything fell to pieces. The 2008 financial crisis sent GE’s financing division—which supplied more than half the company’s profits—into chaos. It was eventually sold for scrap. Subsequent bets in oil and energy were disasters, resulting in billions in writeoffs. GE stock fell from $40 in 2007 to $7 by 2018. Blame placed on CEO Jeff Immelt—who ran the company since 2001—was immediate and harsh. He was criticized for his leadership, his acquisitions, cutting the dividend, laying off workers and—of course—the plunging stock price. Rightly so: those rewarded with dynastic wealth when times are good hold the burden of responsibility when the tide goes out. He stepped down in 2017. But Immelt said something insightful on his way out. Responding to critics who said his actions were wrong and what he should have done was obvious, Immelt told his successor, “Every job looks easy when you’re not the one doing it.
Morgan Housel (The Psychology of Money)
Adequate size. A sufficiently strong financial condition. Continued dividends for at least the past 20 years. No earnings deficit in the past ten years. Ten-year growth of at least one-third in per-share earnings. Price of stock no more than 1½ times net asset value. Price no more than 15 times average earnings of the past three years.
Benjamin Graham (The Intelligent Investor)
Investing in dividend stocks is one of the best ways to build wealth. The reason it works so well is that you can take the cash from a dividend payment and use it to buy more dividend stocks. Then those dividend stocks will pay you more dividends.
Matthew R. Kratter (A Beginner's Guide to the Stock Market)
The dividend discount model suggests that in an efficient market, the current price of a stock should equal the present value of all expected future dividends, assuming for the sake of simplicity that the investor has no intention of selling the stock. (The present value is sometimes called the discounted value, since the present value of an item is discounted from its value in the future.)
Andrew W. Lo (In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest)
Each ran a highly decentralized organization; made at least one very large acquisition; developed unusual, cash flow–based metrics; and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder, and skepticism from their
William N. Thorndike Jr. (The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success)
In December 1972, Polaroid was selling for 96 times its 1972 earnings, McDonald’s was selling for 80 times, and IFF was selling for 73 times; the Standard & Poor’s Index of 500 stocks was selling at an average of 19 times. The dividend yields on the Nifty-Fifty averaged less than half the average yield on the 500 stocks in the S&P Index. The proof of this particular pudding was surely in the eating, and a bitter mouthful it was. The dazzling prospect of earnings rising up to the sky turned out to be worth a lot less than an infinite amount. By 1976, the price of IFF had fallen 40% but the price of U.S. Steel had more than doubled. Figuring dividends plus price change, the S&P 500 had surpassed its previous peak by the end of 1976, but the Nifty-Fifty did not surpass their 1972 bull-market peak until July 1980. Even worse, an equally weighted portfolio of the Nifty-Fifty lagged the performance of the S&P 500 from 1976 to 1990.
Peter L. Bernstein (Against the Gods: The Remarkable Story of Risk)
Don’t increase your lifestyle until your passive income surpasses your active income. You’ll know you can and should buy that luxury item when the cost of keeping it is totally covered by your passive income. The things you own (such as dividend-paying stocks, oil partnerships, and real estate investment trusts) should pay for the things you enjoy and consume.
Christopher Manske (Outsmart the Money Magicians: Maximize Your Net Worth by Seeing Through the Most Powerful Illusions Performed by Wall Street and the IRS)
These steps will help you remember that correlation is not causation, and that most market prophecies are based on coincidental patterns. That was the problem in the late 1990s at the Motley Fool website. Its Foolish Four portfolios were based on research claiming that factors like the ratio of a company’s dividend yield to the square root of its stock price could predict future outperformance. In the long run, however, a company’s stock can rise only if its underlying business earns more money.
Jason Zweig (Your Money and Your Brain)
Inspired by Sharpe’s work, Fouse in 1969 recommended that Mellon launch a passive fund that would try to replicate only one of the big stock market indices, like the S&P 500 of America’s biggest companies. It got nixed by Mellon’s management. In the spring of 1970, he then proposed a fund that would systematically invest according to a dividend-based model devised by John Burr Williams—who had nearly two decades earlier inspired Markowitz’s work—but that too was summarily squashed. “Goddammit Fouse, you’re trying to turn my business into a science,” his boss told him.14
Robin Wigglesworth (Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever)
Following the 4 Percent Rule still gives you a 5 percent chance of running out of money, due to a phenomenon known as sequence-of-return risk. Your backup plan is to use the Cash Cushion and the Yield Shield. Cash Cushion: A reserve fund held in a savings account that you can use to avoid doing a full portfolio withdrawal during down years. Yield Shield: A combination of dividends and interest being paid by your ETFs that is delivered as cash without selling any assets. The Yield Shield can be raised by pivoting some of your assets into higher-yielding assets, such as . . . Preferred shares Real estate investment trusts (REITs) Corporate bonds Dividend stocks The size of the Cash Cushion is determined using the following formula: Cash Cushion = (Annual Spending − Annual Yield) × Number of Years
Kristy Shen (Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required)
It’s true that interest rates are lower today than they were in 1989, so you’d expect yields on bonds and dividends on stocks to be lower.
Peter Lynch (One Up On Wall Street: How To Use What You Already Know To Make Money In)
Buffett’s 1952 memo on Cleveland Worsted Mills mentioned that the stock traded below net current asset value and had “several well-equipped mills.”98 He thought the company had ample earnings to cover the dividend, a view supported by the summary financials found in Table 1. The company paid $8.00 a share out to shareholders, and the last year the company earned below this figure was 1945.99 The income and return on capital figures were a little concerning. Like Marshall-Wells in the first chapter, Cleveland Worsted Mills was coming off the post-World War II highs and falling back to earth, earning a respectable but not extraordinary return on invested capital in 1951. Worsted was a commodity product, with shortages the sole reason for the company’s previously rising income and returns on capital. As the market normalized, the company was unlikely to earn above-average returns on capital in the future.
Brett Gardner (Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns)
Buffett’s thesis on Cleveland Worsted Mills was straightforward. The stock sold for below its net current asset value and at a bargain P/E multiple. The worsted manufacturer was consistently profitable and paid a fat dividend. By 1952, having graduated from Columbia and now an employee at Buffett-Falk, Buffett liked the stock enough to write a brief report on it, stating, “The $8 dividend provides a well-protected 7% yield on the current price of approximately $115.”86 The stock had been cheap for some time. Buffett, in fact, had held the stock in 1951, selling at a slight loss as he invested his capital in companies like GEICO and Timely Clothes. Ben Graham also liked the stock, having made the Cleveland firm a 1.5% position in the Graham-Newman fund and including the company in the 1951 edition of Security Analysis in a table titled “Six Common Stocks Undervalued in 1949,” along with Marshall-Wells.87
Brett Gardner (Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns)
Greif had a quirk in its share structure that presented a valuation challenge. The company had two shares of stock, Class A and Class B, but only the A shares were publicly traded. The B shares were closely held and not exchange-traded. Like most companies with dual-class share structures, they had differing voting rights. Unlike most companies with dual-class share structures, the classes were entitled to differing dividend distributions and liquidation proceeds. The A shares—the class Buffett bought—had first rights to liquidation proceeds and dividends. Plus, the A shares were entitled to cumulative dividends while the B shares were not. The A shares would only gain voting rights if the company failed to pay the A’s entitled dividend for four quarters. However, the Class B shares received a higher split of additional dividends once the distribution exceeded a certain rate. This made calculating market capitalization figures difficult since there was no price readily available for the Class B shares.
Brett Gardner (Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns)
Union Street Railway was a New Bedford, Massachusetts-based bus company. With the equity trading below the net cash on the company’s balance sheet, Union Street was a classic net-net when Buffett bought the stock. This was a small, thinly traded company with a market capitalization below $1 million. The small float meant acquiring stock required a bit of work and persistence by the young, enterprising investor. Like the other stocks discussed so far, it was cheap. But in contrast to the previous investments discussed in this book, this one was actually losing money at the time of Buffett’s purchase. Yet this stock would be a huge winner for Buffett, yielding him a dollar profit worth more than 4.5x the average household yearly income at the time. After accumulating a meaningful stake in the company, Buffett took a trip to Massachusetts to meet with the company’s president. While he did not run a proxy contest or take aggressive action to prompt a capital return, the company paid a substantial dividend shortly after his visit.109 Union Street Railway was an early lesson in how positive changes in capital allocation can lead to windfall profits.
Brett Gardner (Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns)
The valuation analysis was simple—anyone could see the stock was incredibly cheap. But it had been traded below net cash for several years before the company distributed cash to shareholders. Returning the cash was the critical factor in driving excellent returns. Assuming Buffett bought the stock in 1954 at $35 and sold in 1957 (having received the $50 per share distribution and a few dollars extra in dividends) when it traded between $20 and $28, he would have more than doubled his money and earned around a 30% IRR.135 The stock didn’t work because it was cheap—it worked because management returned capital to shareholders. The other securities discussed in this book were also incredible bargains—but it took action to drive wonderful returns for shareholders.
Brett Gardner (Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns)
1. Divide capital into 10 equal parts and never risk more than a tenth of it on any one trade. 2. Never overtrade. 3. Never let a profit run into a loss. 4. Do not buck the trend. 5. Trade only in active stocks. 6. When in doubt, get out, and don't get in when in doubt. 7. Never buy just to get a dividend. 8. Never average a loss.
Kenneth L. Fisher (100 Minds That Made the Market (Fisher Investments Press Book 23))
When a company is paying out more in dividends, it is retaining less in earnings; the book value of equity increases by the retained earnings.
Aswath Damodaran (The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit (Little Books. Big Profits))
The point is that market returns are determined by both investment factors—the fundamentals of the initial dividend yield on stocks plus the rate at which their earnings grow—and by speculative factors— the change in the price that investors will pay for each $1 of corporate earnings.
John C. Bogle (John Bogle on Investing: The First 50 Years (Wiley Investment Classics))
The indefiniteness of finance can be bizarre. Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this: • The founders don’t know what to do with it, so they give it to a large bank. • The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. • Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. • Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats. At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.
Peter Thiel (Zero to One: Notes on Startups, or How to Build the Future)
for the stock market, corporate earnings and dividends; for the bond market, interest payments. Market returns, however, are calculated before the deduction of the costs of investing, and are most assuredly not based on speculation and rapid trading, which do nothing but shift returns from one investor to another. For the long-term investor, returns have everything to do with the underlying economics of corporate America and very little to do with the mechanical process of buying and selling pieces of paper. The art of investing in mutual funds, I would argue, rests on simplicity and common sense.
John C. Bogle (Common Sense on Mutual Funds)
For Long-Term Investors   Stock investments are ideal for reaping profits within a long timeframe. Stocks beat other investment vehicles (e.g. bonds) when measured in a period of ten years or more. Actually, the people who invested in the stock market during the Great Depression collected profits over the long-term.   If you will analyze the performance of all investment vehicles for the past 50 years and divide the results into ten-year periods, you'll see that stocks outclass other investment types in terms of total profits (considering that investors collected dividends and experienced capital compounding).
Zachary D. West (Stocks: Investing and Trading Stocks in the Market - A Beginner's Guide to the Basics of Stock Trading and Making Money in the Market)
If you're planning to invest stocks to generate income, you must look for stocks that offer dividends. Usually, corporations pay dividends to recorded stockholders quarterly.
Zachary D. West (Stocks: Investing and Trading Stocks in the Market - A Beginner's Guide to the Basics of Stock Trading and Making Money in the Market)
The superior performance of the original S&P 500 firms surprises most investors. But value investors (as described in Chapter 12) know that growth stocks often are priced too high, and excitement over their prospects often induces investors to pay too high a price. Profitable firms that do not catch investors’ eyes are often underpriced. If investors reinvest the dividends of such firms, they are buying undervalued shares that will add significantly to their return.
Jeremy J. Siegel
Whether appropriate or not, the term “value investing” is widely used. Typically, it connotes the purchase of stocks having attributes such as a low ratio of price to book value, a low price-earnings ratio, or a high dividend yield. Unfortunately, such characteristics, even if they appear in combination, are far from determinative as to whether an investor is indeed buying something for what it is worth and is therefore truly operating on the principle of obtaining value in his investments.
Anonymous
The Vanguard Total International Stock exchange-traded fund—to cite one low-cost example—owns more than 5,000 non-U.S. stocks, has a dividend yield of 3.2% and charges an annual fee of 0.14%. Another
Anonymous
South-east Asia’s high savings rates, most of which flowed into bank deposits, lent themselves to outsize banking systems, which invited godfather abuse. There is, in turn, a pretty direct line from the insider manipulation of regional banks to the Asian financial crisis. The ‘over-banked’ nature of south-east Asia also helps explain a conundrum that has occupied some of the region’s equity investors: why, despite heady economic growth, have long-term stock market returns in south-east Asia been so poor? Since 1993, when a flood of foreign money increased capitalisation in regional markets by around 2.5 times in one calendar year,37 dollar-denominated returns with dividends reinvested (what investors call ‘total’ returns) in every regional market have been lower than those in the mature markets of New York and London, and a fraction of those in other emerging markets in eastern Europe and Latin America.38
Joe Studwell (Asian Godfathers: Money and Power in Hong Kong and South East Asia)
blame. Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.
Anonymous
The amount of $1 invested in a capitalization-weighted portfolio in 1802, with reinvested dividends, would have accumulated to almost $13.5 million by the end of 2012.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
would take only $1.33 million invested in the stock market in 1802 to grow, with dividends reinvested, to about $18 trillion, the total value of U.S. stocks, by the end of 2012. The sum of $1.33 million in 1802 is equivalent to roughly $25 million in today’s purchasing power, an amount far less than the value of the stock market at that time.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
It took just over 15 years to recover the money invested at the 1929 peak, following a crash far worse than Smith had ever examined. And since World War II, the recovery period for stocks has been even better. Even including the recent financial crisis, which saw the worst bear market since the 1930s, the longest it has ever taken an investor to recover an original investment in the stock market (including reinvested dividends) was the five-year, eight-month period from August 2000 through April 2006.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
I have learnt from life and which is most precious to me now is that investment in oneself by way of experiences involving travel, different cultures, personal relationships, community service, good entertainment and the like are far more rewarding than any monetary or asset investment particularly when one is around my age. I am too old to wait for the stock exchange or other similar investments to pay any dividends. I don’t want to while away what time I have left waiting and hoping for a dividend which may never come. I could be dead in the meantime, but the dividends I receive from investing in myself are instantaneous.
Garry Greenwood (A Retiree's Guide To Life After Work)
The government can put dividends on the same tax basis as capital gains if the tax authorities allow investors to obtain a tax deferral on reinvested dividends until the stock is sold.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
Unlike common stocks, whose dividends and earnings fluctuate with the ups and downs of the company’s business, bonds pay a fixed dollar amount of interest. If the U.S. Treasury offers a $1,000 20-year, 5 percent bond, that bond will pay $50 per year until it matures, when the principal will be repaid. Corporate bonds are less safe, but widely diversified bond portfolios have provided reasonably stable interest returns over time.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
Gold is often sought as a refuge during times of financial travail. True to form, the price of the precious metal more than tripled in the 1999-2009 decade. But gold is largely a rank speculation, for its price is based solely on market expectations. Gold provides no internal rate of return. Unlike stocks and bonds, gold provides none of the intrinsic value that is created for stocks by earnings growth and dividend yields, and for bonds by interest payments. So in the two centuries plus shown in the chart, the initial $10,000 investment in gold grew to barely $26,000 in realterms. In fact, since the peak reached during its earlier boom in 1980, the price of gold has lost nearly 40 percent of its real value.
John C. Bogle (Common Sense on Mutual Funds)
A 6.5 percent annual real return, which includes reinvested dividends, will nearly double the purchasing power of your stock portfolio every decade. If inflation stays within the 2 to 3 percent range, nominal stock returns will be 9 percent per year, which doubles the money value of your stock portfolio every eight years. Despite
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
Investors can take advantage of this mispricing by buying low-cost passively managed portfolios of value stocks or fundamentally weighted indexes that weight each stock by its share of dividends or earnings rather than by its market value.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
We want more money in real terms after taking inflation into account. Here, I would like to emphasize that whether you consider yourself a stock, gold, private business, or real estate investor, or if you only invest for income such as dividends or rental income, all investors in all asset classes have to obey the same laws and principles of investing. There is no exception!   Sometimes,
David Schneider (The 80/20 Investor: How to Simplify Investing with a Powerful Principle to Achieve Superior Returns)
He claimed that he would rather buy stocks under these conditions, because pigs did not pay a dividend. Plus, you have to feed pigs.   Mr.
David Schneider (The 80/20 Investor: How to Simplify Investing with a Powerful Principle to Achieve Superior Returns)
What does diversification mean in practice? It means that when you invest in the stock market, you want a broadly diversified portfolio holding hundreds of stocks. For people of modest means, and even quite wealthy people, the way to accomplish that is to buy one or more low-cost equity index mutual funds. The fund pools the money from thousands of investors and buys a portfolio of hundreds of individual common stocks. The mutual fund collects all the dividends, does all the accounting, and lets mutual fund owners reinvest all cash distributions in more shares of the fund if they so wish.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
Hence, after this foreshortened discussion of the major considerations, we once again enunciate the same basic compromise policy for defensive investors—namely that at all times they have a significant part of their funds in bond-type holdings and a significant part also in equities. It is still true that they may choose between maintaining a simple 50–50 division between the two components or a ratio, dependent on their judgment, varying between a minimum of 25% and a maximum of 75% of either. We shall give our more detailed view of these alternative policies in a later chapter. Since at present the overall return envisaged from common stocks is nearly the same as that from bonds, the presently expectable return (including growth of stock values) for the investor would change little regardless of how he divides his fund between the two components. As calculated above, the aggregate return from both parts should be about 7.8% before taxes or 5.5% on a tax-free (or estimated tax-paid) basis. A return of this order is appreciably higher than that realized by the typical conservative investor over most of the long-term past. It may not seem attractive in relation to the 14%, or so, return shown by common stocks during the 20 years of the predominantly bull market after 1949. But it should be remembered that between 1949 and 1969 the price of the DJIA had advanced more than fivefold while its earnings and dividends had about doubled. Hence the greater part of the impressive market record for that period was based on a change in investors’ and speculators’ attitudes rather than in underlying corporate values. To that extent it might well be called a “bootstrap operation.” In
Benjamin Graham (The Intelligent Investor)
Coke is a special kind of dividend stock. It is a Dividend Aristocrat, one of an elite group of companies that have raised their dividends every year for the past 25 years. Other Dividend Aristocrats include the Colgate-Palmolive Company, Johnson & Johnson, and McDonald's. There's an easy way to own a piece of every Dividend Aristocrat: just buy some shares of NOBL. It is the ProShares S&P 500 Dividend Aristocrats ETF. It trades just like a stock, and you can purchase it using any brokerage account.
Matthew R. Kratter (A Beginner's Guide to the Stock Market)
More than thirty-five years ago Scudder, Stevens & Clark issued a brochure entitled “Monuments Rarely Pay Dividends.” “When a business begins to get stately,” it said, “wise investors quietly get out from under. For monuments rarely pay dividends.
Thomas William Phelps (100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities)
If historical growth and analyst estimates are of little value, what is the solution? Ultimately, for a firm to grow, it has to either manage its existing investments better (efficiency growth) or make new investments (new investment growth). In the special case where a company's margins are stable and there is no efficiency-driven growth, you should look at how much of its earnings a firm is reinvesting back in the business and the return on these investments. While reinvestment and return on investment are generic terms, the way in which we define them will depend on whether we are looking at equity earnings or operating income. With equity earnings, we measure reinvestment as the portion of net income not paid out as dividends (retention ratio) and use the return on equity to measure the quality of investment. With operating income, we measure reinvestment as the reinvestment rate and use the return on capital to measure investment quality.
Aswath Damodaran (The Little Book of Valuation: How to Value a Company, Pick a Stock, and Profit (Little Books. Big Profits))
They could forget about college. Maybe they didn't want college anyway. Maybe they didn't want degrees and titles and weekend workdays. They could live lives unburdened by transcripts, certificates, licenses, applications, dissertations, diversifications, stocks and bonds and dividends, insurance and annuities and 401(k)s, fashion trends, pantyhose, stuffy suit coats, bow ties, boring parties where the humans squandered irreplaceable minutes on suffocating small talk and no one partook in Dionysian pursuits and everyone went home early feeling empty inside despite the excesses of the cheese tray.
Emily Jane (On Earth as It Is on Television)
The stock market’s performance depends on three factors: real growth (the rise of companies’ earnings and dividends) inflationary growth (the general rise of prices throughout the economy) speculative growth—or decline (any increase or decrease in the investing public’s appetite for stocks)
Benjamin Graham (The Intelligent Investor)
In June 1949 the S & P composite index sold at only 6.3 times the applicable earnings of the past 12 months; in March 1961 the ratio was 22.9 times. Similarly, the dividend yield on the S & P index had fallen from over 7% in 1949 to only 3.0% in 1961, a contrast heightened by the fact that interest rates on high-grade bonds had meanwhile risen from 2.60% to 4.50%. This is certainly the most remarkable turnabout in the public’s attitude in all stock-market history.
Benjamin Graham (The Intelligent Investor)
Another peculiarity in the general position of preferred stocks deserves mention. They have a much better tax status for corporation buyers than for individual investors. Corporations pay income tax on only 15% of the income they receive in dividends, but on the full amount of their ordinary interest income. Since the 1972 corporate rate is 48%, this means that $100 received as preferred-stock dividends is taxed only $7.20, whereas $100 received as bond interest is taxed $48. On the other hand, individual investors pay exactly the same tax on preferred-stock investments as on bond interest, except for a recent minor exemption.
Benjamin Graham (The Intelligent Investor)
No intelligent investor, no matter how starved for yield, would ever buy a stock for its dividend income alone; the company and its businesses must be solid, and its stock price must be reasonable.
Benjamin Graham (The Intelligent Investor)
The selection of common stocks for the portfolio of the defensive investor should be a relatively simple matter. Here we would suggest four rules to be followed: 1. There should be adequate though not excessive diversification. This might mean a minimum of ten different issues and a maximum of about thirty.† 2. Each company selected should be large, prominent, and conservatively financed. Indefinite as these adjectives must be, their general sense is clear. Observations on this point are added at the end of the chapter. 3. Each company should have a long record of continuous dividend payments. (All the issues in the Dow Jones Industrial Average met this dividend requirement in 1971.) To be specific on this point we would suggest the requirement of continuous dividend payments beginning at least in 1950.* 4. The investor should impose some limit on the price he will pay for an issue in relation to its average earnings over, say, the past seven years. We suggest that this limit be set at 25 times such average earnings, and not more than 20 times those of the last twelve-month period. But such a restriction would eliminate nearly all the strongest and most popular companies from the portfolio. In particular, it would ban virtually the entire category of “growth stocks,” which have for some years past been the favorites
Benjamin Graham (The Intelligent Investor)
Seek established companies with a record of profitability and dividend payments - avoid start-ups and biotech or exploration stocks.
John Lee (How to Make a Million – Slowly: Guiding Principles from a Lifetime of Investing (Financial Times Series))
What we want is a company that increases profits (and hopefully dividends) each year and where the rating (PE ratio) that the stock market/investors place on the company's shares increases significantly. This is the 'double whammy' any investor should be seeking.
John Lee (How to Make a Million – Slowly: Guiding Principles from a Lifetime of Investing (Financial Times Series))
Currently, I am very focused on dividends - accepting that few shares are likely to show capital growth in the short term. From my higher-yielding stocks, I am hoping for maintenance of dividends - a dividend increase is a bonus; a "passing" or slashing of the payment is bad news. These board decisions reflect not only the profitability/debt levels of the company, but also its attitude to shareholder dividends, so past dividend history is an important consideration - as is the size of directors' holdings.
John Lee (How to Make a Million – Slowly: Guiding Principles from a Lifetime of Investing (Financial Times Series))
When you buy a share of stock, you become a partial owner of the business. And as a partial owner, you are entitled to a share of the profits that the business generates. Most mature companies will do 2 things with their profits: They will reinvest some of their profits back into the business in order to grow it. They will return some of their profits to the owners. Profits that are returned to the owners are called dividends. If you own a dividend-paying stock, you will usually get paid a dividend every 3 months.
Matthew R. Kratter (Dividend Investing Made Easy)
Here’s how to calculate the dividend yield of a stock: Take the annual dividend payment ($1.56 in this case) and divide it by the current price of the stock ($41.55). In this case, that gives you 0.03754513, or 3.75%. 3.75% is Coke’s current dividend yield.
Matthew R. Kratter (Dividend Investing Made Easy)
You can just buy the ProShares S&P 500 Dividend Aristocrats ETF. The ticker is NOBL, and this ETF (exchange-traded fund) trades just like a stock. You can purchase it using any brokerage account. Today NOBL trades at $62.65 per share. So if you have $1,000, you can buy 15.96 shares of NOBL (1000 divided by 62.65). You’ll pay an expense ratio of 0.35% to own this ETF. What this means is that if you invest $1,000 in this ETF, you will pay them $3.50 every year for the privilege of owning their ETF.
Matthew R. Kratter (Dividend Investing Made Easy)
To calculate the market capitalization of a company, multiply the current market price of a stock by the number of outstanding shares. The number of outstanding shares refers to the number of shares that have been sold to the public.
Michele Cagan (Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins—Your Essential Guide to the Stock Market (Adams 101 Series))
I helped him pick out some solid utility and infrastructure stocks and funds that pay him dividends in the 6% to 7% range.
Steven Bavaria (The Income Factory: An Investor's Guide to Consistent Lifetime Returns)
Stock Guide material includes “Earnings and Dividend Rankings,” which are based on stability and growth of these factors for the past eight years. (Thus price attractiveness does not enter here.) We include the S & P rankings in our Table 15-1. Ten of the 15 issues are ranked B+ (= average) and one (American Maize) is given the “high” rating of A. If our enterprising investor wanted to add a seventh mechanical criterion to his choice, by considering only issues ranked by Standard & Poor’s as average or better in quality, he might still have about 100 such issues to choose from. One might say that a group of issues, of at least average quality, meeting criteria of financial condition as well, purchasable at a low multiplier of current earnings and below asset value, should offer good promise of satisfactory investment results.
Benjamin Graham (The Intelligent Investor)
If the stock that you are considering is a Dividend Aristocrat and it has a dividend yield between
Matthew R. Kratter (Dividend Investing Made Easy)
2.50% and 4.50% today, it is probably reasonably fairly priced (in the current interest rate environment). If the dividend yield is below 2.50%, the stock is probably over-priced, and you should wait to purchase it. If the dividend yield is over 4.50%, there is probably something wrong. Either the company has an enormous amount of debt or underfunded pension obligations (like AT&T), which makes the stock more risky. Or the market is pricing in the chance of a dividend cut. Either way, you are better off sticking with the 2.50% to 4.50% dividend yield range. That’s where the more normal healthy companies will be found.
Matthew R. Kratter (Dividend Investing Made Easy)
Be passionate about the business but dispassionate about the stock. Celebrate the big successes of your businesses and reflect on failures. A true feeling of ownership gives an investor the conviction to hold. When you think like a business owner, you no longer view stocks as pieces of paper or buy them with “target prices” in mind. Instead, you view stocks as part ownership in a business and you want to savor the journey alongside the promoters. As companies grow larger and more profitable, their stockholders share in the increased profits and dividends. Invest for the long term. Live fully today. Every day, millions of hardworking people around the world are doing great things at so many companies. As investors, we are thankful.
Gautam Baid (The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated (Heilbrunn Center for Graham & Dodd Investing Series))
The first, or predictive, approach could also be called the qualitative approach, since it emphasizes prospects, management, and other nonmeasurable, albeit highly important, factors that go under the heading of quality. The second, or protective, approach may be called the quantitative or statistical approach, since it emphasizes the measurable relationships between selling price and earnings, assets, dividends, and so forth. Incidentally, the quantitative method is really an extension—into the field of common stocks—of the viewpoint that security analysis has found to be sound in the selection of bonds and preferred stocks for investment. In our own attitude and professional work we were always committed to the quantitative approach. From the first we wanted to make sure that we were getting ample value for our money in concrete, demonstrable terms. We were not willing to accept the prospects and promises of the future as compensation
Benjamin Graham (The Intelligent Investor)
Adequate Size of the Enterprise All our minimum figures must be arbitrary and especially in the matter of size required. Our idea is to exclude small companies which may be subject to more than average vicissitudes especially in the industrial field. (There are often good possibilities in such enterprises but we do not consider them suited to the needs of the defensive investor.) Let us use round amounts: not less than $100 million of annual sales for an industrial company and, not less than $50 million of total assets for a public utility. 2. A Sufficiently Strong Financial Condition For industrial companies current assets should be at least twice current liabilities—a so-called two-to-one current ratio. Also, long-term debt should not exceed the net current assets (or “working capital”). For public utilities the debt should not exceed twice the stock equity (at book value). 3. Earnings Stability Some earnings for the common stock in each of the past ten years. 4. Dividend Record Uninterrupted payments for at least the past 20 years. 5. Earnings Growth A minimum increase of at least one-third in per-share earnings in the past ten years using three-year averages at the beginning and end. 6. Moderate Price/Earnings Ratio Current price should not be more than 15 times average earnings of the past three years.
Benjamin Graham (The Intelligent Investor)
In a graph often cited by the late Clayton Christensen, a noted expert on disruptive innovation, in 1981, 50 percent of the average investment of profits was allocated to research and development and 50 percent to shareholder dividends. Today, 50 percent of that investment is allocated to stock buybacks, 49 percent to dividends, and a meager 1 percent to research and development.
R "Ray" Wang (Everybody Wants to Rule the World: Surviving and Thriving in a World of Digital Giants)