Dividend Detective - If You Like dividends, you'll LOVE Dividend Detective

 

Harry's Notes

2/15/12:  Driven by a 27% drop in its average daily charter rate, and a forecast of continued tough times for the balance of the year, dry-bulk ship owner Star Bulk Carrier (SBLK) lowered its quarterly dividend by 70% to $0.015 per share. More evidence that investors should stay away from dry-bulk shippers.

2/7/12 Mortgage REIT American Capital Agency (AGNC) cut its quarterly dividend by 11% to $1.25 per share, but its share price wasn't hurt. In fact, it's up slightly. Why? Mortgage REITs tend to trade near their book value.  Besides for the dividend cut, AGNC also reported its December quarter numbers and its book value, at $27.71 per share, was up 14% vs. year-ago and up 3% since September 30. Try to find another MREIT with that track record.

2/1/12:  Pitney Bowes (PBI), the provider of postal mailing services, just raised its quarterly dividend by 1% to $0.375 per share. That was enough to bring its yield up to 7.8%, the second highest in our Manufacturing & Services category (cigarette maker Vector (VGR) at 9.2% is the highest). But be careful before you jump in. Although PBI is generating plenty of cash to service its debt and fund its dividends, as you might guess, the demand for postal mailing services is declining. Despite PBIs best efforts to come up with new services, sales are stagnant, if not declining. PBI will report December quarter results on February 9. Driven by a 4% drop in sales, analysts expect earnings of $0.60 per share, down 10% vs. year-ago. I suggest avoiding PBI unless they announce something that will significantly turn things around in the the February 9 report or conference call.

1/13/12 In both 2010 and 2011, I described portfolios each containing seven dividend stocks intended to be held for the year. My 2010 portfolio averaged a 21% return vs. 13% for the S&P 500. My 2011 portfolio returned 24% vs. 0% for the S&P. Here's my list for 2012.

• American Software (AMSWA)

• Golar LNG (GLNG)

• H.J. Heinz (HNZ)

• OneBeacon Insurance Group (OB)

• Oneok (OKE)

• Vanguard Total Bond Market Index (BND)

• Verizon Communications (VZ)

Click here for details.

1/12/12 Here are the top 10 returning stocks followed by Dividend Detective in 2011.

Company D.D. Portfolio

2011 Return

B&G Foods

Mfg

82%

Oneok

Utility

60%

McDonald’s

Mfg

34%

CenterPoint Energy

Utility

33%

Unitil

Utility

31%

Dominion Resources

Utility

29%

Altria

MFG

27%

Southern Company

Utility

26%

J.H. Premium Dividend

Closed-End Fund

25%

Foot Locker

Mfg

25%

1/3/12:  Click here to see our Sample Portfolio returns for December and for the year 2011.

12/28/11:   We presented our first Dividend Hotshots portfolio in the October 2009 issue of Dividend Detective Highlights. To qualify for the Hotshots portfolio, stocks must had been paying at least 4.5% yields, had solid historical dividend growth records and strong future dividend growth prospects. We just compiled the total returns (share price appreciation + dividends) of the first October 2009 list, plus three more recent portfolios. Here are the results.

Start End Portfolio
Ave Return
S&P Return # Stocks Up
>=2%
# Stocks Down
>=
-2%
# Even

October 2009  DD Highlights

9/30/09

12/31/09

10.2%

5.5%

39

5

2

9/30/09 3/31/10 17.7% 10.6% 43 2 1
9/30/09 9/30/10 31.3% 8.0% 42 4 0

April 2010 DD Highlights

3/31/10 6/30/10 0.8% -11.2% 14 9 6
3/31/10 9/30/10 15.1% -2.2% 27 1 1
3/31/10 12/31/10 26.7% 7.3% 27 0 2
3/31/10 3/31/11 34.6% 13.3% 27 1 1
October 2010 DD Highlights
10/4/10 1/4/11 8.2% 11.7% 28 3 7
10/4/10 4/4/11 13.5% 17.2% 32 2 4
10/4/10 7/4/11 14.1% 17.7% 35 2 1

10/4/10

10/4/11

5.2%

-1.2%

24

11

3

April 2011 DD Highlights

4/4/11 7/4/11 2.4% 0.5% 17 9 11

4/4/11

10/4/11 -6.9% -17.7% 8 23 6

12/20/11:  While most REITs investing in home mortgages insured by government agencies Fannie Mae and Freddie Mac have been cutting their dividends, CreXus Investment Corp (CXS), a REIT that specializes in commercial mortgages has been going the other way.

CreXus just raised its December quarterly payout by 17%, hiking its yield to 13.7%. That's the fourth raise this year. CreXus upped its dividend by 20% in September, by 9% in June, and by 5% in March. Its $0.35 per share December payout is 59% above December 2010.

CreXus, a September 2009 IPO, is managed by a unit of Annaly Capital management (NLY).

12/15/11:  Hotel property REIT Ashford Hospitality, currently paying 5.1%, says it will up its payout 10% next year. Another sign of an improving hotel market. 

12/6/11:  Small banks are paying big dividend yields these days, but make sure that you pick the right bank. First Niagara (FNFG), based in Buffalo, NY, was paying 7.2%, but, alas, it just cut its quarterly payout by 50%, to $0.08 per share. It seems that First Niagara needs the cash to complete its takeover of HSBC's U.S. branches. Don't rely on stock analysts to keep you out of this sort of trouble, six of 11 analysts were recommending buying First Niagara.

12/3/11:  Here are the Premium Members Sample Portfolio returns for November: Conservative +2.5%, Growth & Income +1.2%, High Yield/Spec. -1.3%. For comparison S&P 500 -0.5%. Click here for Sample Portfolio returns since Jan. 2008.

12/2/11:  American Software (AMSWA), which makes software used by major corporations to manage back office operations, just reported blowout October quarter numbers. EPS up 83% year-over-year. Revenues up 22%. Dividend is 4.3%. Check it out.

11/29/11:  Digital publishing facilitator Rimage (RIMG) increased its quarterly dividend by 70%, bringing its yield up to 6%. Rimage just closed on an acquisition that it expects to spur growth. It's worth a look.

11/27/11:  I just added a list of publicly traded general partners to our MLP Directory. Click here if you don't know why that's important.

11/25/11: Ira writes: "Can you comment on closed-end funds following a covered call strategy?

While in theory they should work, I'm not aware of any covered-call CEF that has consistently produced results worth talking about. Comments?  

11/23/11:  We've just posted an updated Dividend Death List, which lists stocks that we think are likely to cut their dividends over the next 12-months. Our previous (8/5/11) version included 13 stocks. So far, only two of them have cut their payouts, but here's something unexpected: From August 5, through November 23, 2011, the 13 stock portfolio has averaged a 10.3% loss vs. -2.4% for the overall market, at least as measured by the S&P 500 (SPY). In fact, only two of the 13 were in the positive column. Comments?  

11/22/11:  For a newspaper article, I recently ran a quick check of the performance of closed-end funds compared to conventional mutual funds. Here's what I found.

As of November 15, 2011, the overall market, at least as measured by the S&P 500, was even for the year. However, more than 75% of the 617 closed-end funds tracked by Morningstar were in positive territory for the year, and more than 40% of them had rewarded shareholders with 15% or higher returns.

By contrast, only 41% of the 6,657 conventional mutual funds tracked by Morningstar had recorded year-to-date gains and less than 1% of them had racked up 15% or higher returns.

Admittedly, a much higher percentage of closed-end funds invest in fixed-income securities, especially municipal bonds, which have outperformed the overall market. Nevertheless, the closed-end fund’s outperformance is striking. Comments?  

11/20/11:  David Edwards, president of Heron Financial Group, produces a monthly commentary. His latest, titled, "Why Watching CNBC Won't Make You Rich," was especially insightful. Comments?  

 

About Harry Domash

Dividend Detective

Cancellation, Refund and Privacy Policies

published by Winning Investing

411 Palmer Avenue • Aptos, CA 95003

(800) 276-7721 email:

Best Seller!
Interested in Fundamental Analysis?

Fire Your Stock Analyst
A Step-by-Step Guide by Harry Domash
New: Second  Edition

Learn How to Invest
Winning Investing
Dedicated to helping you
become a winning investor.