The Div Guy

Top 20 Stock Holdings

2010-03-03T05:00:00.011-06:00

Here are the top 20 stocks in my Dividend Portfolio as of 2/26/10 ranked by size of holdings. I know some if these stocks no longer pay dividends but I have keep them for gains as the economy recovers. I will look to sell my stocks that are no longer paying dividends throughout 2010.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. Barclays PLC (BCS) UK
4. Penn West Energy Trust (PWE) Canada
5. HRPT Properties Trust (HRP) USA
6. Johnson & Johnson (JNJ) USA
7. Procter & Gamble (PG) USA
8. General Electric Company (GE) USA
9. American Capital (ACAS) USA
10. ONEOK, Inc. (OKE) USA
11. Aircastle Limited (AYR) USA
12. Banco Santander (STD) Spain
13. Cooper Tire & Rubber (CTB) USA
14. Diana Shipping Inc. (DSX) Greece
15. GlaxoSmithKline (GSK) UK
16. Exxon Mobil Corporation (XOM) USA
17. Deutsche Bank (DB) Germany
18. Pepsi (PEP) USA
19. Duke Energy Corporation (DUK) USA
20. Pfizer (PFE) USA

Here are the top 20 holdings of the Tweedy, Browne Worldwide High Dividend Yield Value Fund as of the end of 1/31/10:

1. Novartis AG (NVS) Switzerland
2. Unilever NV (UN) Netherlands
3. Total SA (TOT) France
4. Pearson PLC (PSO) UK
5. Muenchener Rueckver Germany
6. Glaxosmithkline PLC (GSK) UK
7. Emerson Electric Co (EMR) USA
8. BAE Systems PLC (BAESY) UK
9. Embotelladoras Arca Mexico
10. Diageo PLC (DEO) UK
11. CNP Assurances France
12. Exelon (EXC) USA
13. Philip Morris Intl (PM) USA
14. Genuine Parts Co (GPC) USA
15. Vodafone Group PLC (VOD) UK
16. Johnson & Johnson (JNJ) USA
17. Reynolds American (RAI) USA
18. Coca Cola (KO) USA
19. ConocoPhillips (COP) USA
20. Eni Spa (E) Italy

February Dividend Income Update

2010-03-02T05:00:00.005-06:00

My Annualized Dividend Income as of the end of February increased to $5,683 from $5,623 for the month. This means my dividend stocks will pay $5,683 in dividends over the next 12 months.

I made a few dividend stock purchases over the past month from dividend distributions. It looks like the economy has bottomed out and we had no more dividend cuts the last few months.

My Dividend Income Goal for the end of 2010 is $6,000. I plan to sell of some stocks that are no longer paying dividend throughout the year and add a few hundred dollars a month to our dividend paying stocks.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Wednesday.

February Net Worth Update

2010-03-01T05:00:00.002-06:00

As of the end of February our Net Worth increased to $795,239 from $777,745 for the month which is a 2.25% increase. The stock market has been mixed the past few weeks and we are now at a high since May 2008. This is also close to where we were on March 2007.

The breakout is as follows:
ASSETS
Retirement Accounts $393,278
Taxable Accounts $131,803
Cash $22,255
Home $205,000
Cars $8,300
Personal Property $3,000
Kids 529 Accounts $31,603

Here is the summary for this month:

Our Net Worth increased the past month due mostly to an slight increase in the stock market. We are still debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received around $826 in dividends for the month and have used the cash from these dividends to make additional stock purchases of our dividend stocks but I have not been adding much extra money.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. I continued funding our Roth IRA's each month.

I will post my Dividend Income Update on Tuesday.

Solid Foreign Dividend Stocks

2010-02-15T05:00:00.014-06:00

Barron's has an article by Johanna Bennett on The Wide World of Dividend Stocks. Here are some highlights:

In seeking stocks that pay a decent dividend, it's time for investors to go abroad.

Dividends paid by many big overseas firms have held up well over the last few years. And U.S.-listed shares of BP (ticker: BP), China Mobile (CHL), Diageo (DEO), Taiwan Semiconductor Manufacturing (TSM) and GlaxoSmithKline (GSK) remain lucrative options for income-hungry U.S. investors.

"If you only invest in U.S. stocks, you miss a lot of opportunities," says Alan Lancz, president of money-management firm Alan B. Lancz & Associates.

Foreign stocks tend to have more attractive dividend yields. Because overseas firms, much more than their U.S. counterparts, believe in returning more of their excess capital to shareholders, they're often more generous, says Judith Saryan, a portfolio manager with Eaton Vance, who specializes in dividend-paying stocks.

Financial data firm Markit Group sees dividends paid by companies in Europe's Dow Jones Stoxx 600 Index climbing an average of 11% in 2010. Members of Brazil's Bovespa stock index and Japan's Nikkei 225 should generate an average of 10% dividend growth.

Investors in the U.S. often find it inconvenient to trade on overseas stock exchanges. Yet companies that trade shares or American depositary receipts (ADRs) on U.S. exchanges are easy for U.S. investors to buy. ADRs tend to mimic the performance of the corresponding foreign stock, but are denominated and pay dividends in U.S. dollars.

With the help of FactSet Research Systems, Barrons.com found 66 foreign companies with market values above $5 billion and with dividend yields of 3% or higher.

Financial companies were excluded as too risky. We then looked for growing dividends backed by growing earnings.

The highest yield on our list belongs to Europe's biggest oil company, BP -- 6.3%.

Cliff Remily, manager of the Thornburg Investment Income Builder Fund, calls BP "hands down the best allocator of capital in the energy business." Since 1993, the company has steadily expanded oil reserves and spent $118 billion on dividends and repurchasing its own stock.

With a 3.7% yield, China Mobile, China's leading wireless service provider, could raise its payout to investors better than 15% annually through 2014, says Remily.

At 3.5%, Diageo, the world's largest maker of bottled spirits, has the lowest yield on our list.

The global recession has taken a toll on sales and earnings. Yet Diageo remains a global powerhouse with the ability to generate piles of cash and a long history of dividend hikes.

With a yield of 4.7%, Taiwan Semiconductor has paid a cash dividend to investors since 2004.

Ravaged by the global recession, manufacturing plants are humming again. Still, the ADR price has dropped 15% this year amid worries that the semiconductor foundry is being excessive by investing $4.8 billion this year in new manufacturing technology.

But Taiwan Semiconductor has virtually no debt and nearly $7 billion in cash.

And finally, there's GlaxoSmithKline.

Glaxo has the slowest-growing dividend on our list. But it has 100 new drugs and 15 vaccines in development. Profit and free cash flow are growing.

And with a yield of 5.2%, "investors are being paid well to wait," as the company overcomes it challenges, says Linda Bannister, an analyst with Edward Jones.

Because ADRs reflect the value of the corresponding foreign security, returns will get pinched if the U.S. dollar makes a big comeback.

Nevertheless, it's a big wide world, filled with big companies that pay out a fair amount of cash.

Disclosure: The Div Guy owns shares of GSK at the time of this post.

Blue Chips for the Long Run

2010-02-04T05:00:00.005-06:00

Here are some highlights from Blue Chips for the Long Run By Randall W. Forsyth on Barrons.com.

Two prominent investors, one a bull, the other a bear, actually agreeing on one thing while disagreeing about just everything else. To wit, Legg Mason's Bill Miller and GMO's Jeremy Grantham part company on most questions regarding the economy and the stock market.

But they both think high-quality U.S. stocks provide the best prospective long-term returns of any major asset class over the next decade. That said, Miller thinks the U.S. equity market, as defined by the Standard & Poor's 500 index, currently is roughly 10% undervalued while Grantham reckons it's 30% overvalued.

Stocks, by contrast, have spent "10 years in the wilderness," leaving high-quality, large-capitalization stocks cheap relative to bonds, Miller contends. Merck (MRK) trades at 12 times this year's earnings and yields more than 10-year Treasuries. International Business Machines (IBM) has record earnings; trades at 12 times next year's forecast earnings; buys back shares every and has increased its dividend 25% over the past five years.

As for Grantham, he sees "high-quality" U.S. stocks providing a 6.8% annual return over inflation during the next 10 years, slightly more than the overall market's historical real return of 6.5%. But overall large-cap U.S. equities should provide a real return of just 1.3% annually and 0.5% in real terms for small-cap stocks.

The seeming anomaly that the best-quality stocks also have been the cheapest has been a recurring theme of Barrons.com and Barron's magazine. Last week, Barrons.com featured a positive profile of Procter & Gamble (PG) while the print publication has published bullish stories on blue chips such as IBM, ExxonMobil (XOM), PepsiCo (PEP), Altria (MO) and AT&T (T) in recent weeks.

In addition, last week, the magazine also ran a feature on the so-called Dogs of the Dow, the highest yielding stocks of the Dow 30 Industrials ("Groomed for a Comeback," Jan. 18), which included such blue chips as DuPont (DD), Boeing (BA), Home Depot (HD), Merck, Chevron (CVX), Kraft (KFT), McDonald's (MCD), AT&T and Verizon (VZ.)

So, whether you agree with Miller and think stocks have further to rise, or Grantham, who believes the market is vulnerable to a pullback, you ought to stick to the top-shelf stuff, not the bland lite beer.

Disclosure: The Div Guy owns shares of PG, XOM, PEP, T and VZ at the time of this post.

Top 20 Stock Holdings

2010-02-03T05:00:00.016-06:00

Here are the top 20 stocks in my Dividend Portfolio as of 1/31/10 ranked by size of holdings. I know some if these stocks no longer pay dividends but I have keep them for gains as the economy recovers. I will look to sell my stocks that are no longer paying dividends throughout 2010.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. Barclays PLC (BCS) UK
4. HRPT Properties Trust (HRP) USA
5. Johnson & Johnson (JNJ) USA
6. Penn West Energy Trust (PWE) Canada
7. Procter & Gamble (PG) USA
8. General Electric Company (GE) USA
9. ONEOK, Inc. (OKE) USA
10. American Capital (ACAS) USA
11. Banco Santander (STD) Spain
12. Aircastle Limited (AYR) USA
13. Cooper Tire & Rubber (CTB) USA
14. Diana Shipping Inc. (DSX) Greece
15. GlaxoSmithKline (GSK) UK
16. Exxon Mobil Corporation (XOM) USA
17. Seagate Technology (STX) USA
18. Pfizer (PFE) USA
19. Duke Energy Corporation (DUK) USA
20. Deutsche Bank (DB) Germany

Here are the top 10 holdings of the Eaton Vance Dividend Income Fund as of 12/31/09:

1. BP PLC (BP)
2. Total S.A. (TOT)
3. Vodafone Group (VOD)
4. Occidental Petroleum Corp. (OXY)
5. International Business Machines (IBM)
6. Nestle S.A. (NSRGY)
7. BHP Billiton Ltd. (BHP)
8. Verizon Communications Inc. (VZ)
9. General Dynamics Corp. (GD)
10. Hewlett-Packard Co. (HPQ)

January Dividend Income Update

2010-02-02T05:00:00.004-06:00

My Annualized Dividend Income as of the end of January increased to $5,623 from $5,468 for the month. This means my dividend stocks will pay $5,623 in dividends over the next 12 months.

I made a few dividend stock purchases over the past month from dividend distributions. It looks like the economy has bottomed out and we had no more dividend cuts the last few months.

My Dividend Income Goal for the end of 2010 is $6,000. I plan to sell of some stocks that are no longer paying dividend throughout the year and add a few hundred dollars a month to our dividend paying stocks.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Wednesday.

January Net Worth Update

2010-02-01T05:00:00.005-06:00

As of the end of January our Net Worth decreased to $777,745 from $788,767 for the month which is a 1.40% decrease. The stock market had few bad weeks at the end of January but we are close to where we ended of 2009.

The breakout is as follows:
ASSETS
Retirement Accounts $383,882
Taxable Accounts $125,661
Cash $21,054
Home $205,000
Cars $8,400
Personal Property $3,000
Kids 529 Accounts $30,748

Here is the summary for this month:

Our Net Worth decreased the past month due mostly to the drop in the stock market. We are still debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received around $200 in dividends for the month and have used the cash from these dividends to make additional stock purchases of our dividend stocks but I have not been adding much extra money.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. I continued funding our Roth IRA's each month.

I will post my Dividend Income Update on Tuesday.

Shopping for Dividend Stocks

2010-01-20T05:00:00.005-06:00

The Wall Street Journal has an article by Brett Arends about blue chip dividend stocks. Shop for Dividends in This Aging Bull Market

Wall Street has rallied a long way since the dark days last winter. But there are still plenty of blue chips offering big dividend yields.

Screen the market for yields over 3% that are well-backed by earnings and a surprising number of big household names come up -- Kraft Foods, Clorox, Sara Lee, Sysco, Johnson & Johnson, Merck, BP, NStar, Verizon Communications and AT&T.

Right now top dividend stocks have extra appeal. That's because they offer a tempting alternative to cash or bonds for those who need income.

"Why own bonds when you can own 'defensives'?" asks Bijal Shah, strategist at investment company Icap.

Such stocks "are cheap in absolute terms," Mr. Shah says. "The dividend yield of U.S. defensives now equals the yield on 10-year Treasurys.... And the dividends and earnings of defensives grow very steadily, unlike the earnings stream for the overall equity market."

Judy Saryan, a fund manager at Eaton Vance in Boston who specializes in dividend stocks, says the first thing she checks with a stock is the company's balance sheet: Does it have big, or unknown, potential liabilities that could blow up the company's finances? Paying attention to balance sheets steered her fund around many icebergs over the past few years.

The second thing to check is the cash-flow statement. Is the company earning enough to keep paying dividends? How much of a cushion is there if business turns down?

Her favorite sign: A company that's actually raising payouts. "If a company grows its dividend," she says, "that's the best signal the management and the board can give that they have confidence in the future."

What are her picks right now? Ms. Saryan likes many big drug companies, seeing strong cash flow and solid balance sheets at the likes of Merck, Abbott Laboratories, and overseas firms Sanofi-Aventis, Novartis and AstraZeneca.

Also on her list: Major consumer-product firms like Procter & Gamble, PepsiCo, Colgate-Palmolive and McDonald's.

Technology stocks have boomed this year, but a few big companies still offer reasonable yields, including Analog Devices and even Intel.

But some of the fattest yields are to be found in telecoms. "Verizon is very attractive," Ms. Saryan says. "It has the best quality network" and a 6%-plus yield. And there's possible upside if the network can offer customers an Apple iPhone next year, as some rumors suggest could happen.

She also likes overseas mobile giant Vodafone, and Spain's Telefonica, whose U.S.-listed shares have a 4.7% yield. Telefonica has emerging-markets growth because Latin America now accounts for about half of its sales.

Disclosure: The Div Guy owns shares of JNJ, T, PG, PEP and ABT at the time of this post.

Health Care Stock Picks for 2010

2010-01-19T05:00:00.004-06:00

Barron's has an interview with John Sullivan the director of research and investment strategist at Leerink Swann, a Boston-based investment bank that specializes in health care.

Q: So how should smart investors position themselves to profit in health-care stocks?

A: In 2009, some of the best-performing health-care stocks were small biotech companies. Strong clinical trial data on a number of drug candidates could help extend that rally. We see a great opportunity in big-cap names in 2010, especially select names in Big Pharma. At less than 10 times earnings and with a dividend yield of almost 4%, we like Pfizer (PFE) best. We also like Merck & Co. (MRK). Across all of health care, we can't find any other stocks that are more likely to meet earnings expectations over the next several quarters than Pfizer and Merck. Both companies closed significant acquisitions in late 2009, and have embarked on cost-cutting
initiatives that will help drive reliable and very predictable earnings growth for the next several quarters.

Q: Besides Big Pharma, where else should investors look?

A: Big biotech stocks dramatically underperformed last year. But large players like Gilead Sciences (GILD) and Genzyme (GENZ) could generate revenue growth in the area of 10% and increase their bottom lines at a rate in the teens or better. Genzyme had a tough 2009 due to manufacturing and regulatory problems. They should put those issues behind them in 2010.

Q: What about managed care?

A: Though the stocks rallied significantly in the second half of 2009, they remain attractive. The valuation gap between insurers and the broader health-care sector should close once health-care reform is put to bed. We expect U.S. employment to rise in the first quarter of 2010, which is good news for health insurers that cater to big employers, such as WellPoint (WLP) and Cigna (CI). These two companies are also less exposed to Medicare Advantage health plans -- a prime target of health-care reform.

Q: Cash-strapped hospitals kept a tight hold on supply inventories and capital spending last year. What's ahead for medical-device, hospital-supply and equipment makers?

A: Hospital suppliers remained reasonably strong last year, so we think there is continued opportunity among big names such as Baxter International (BAX) and Covidien (COV). Starting late last year, hospitals have grown more comfortable with their financial situation, so demand for capital equipment has shown signs of improvement. Large medical-device companies, meanwhile, are divided between cardiac and orthopedic companies. The arrival last year of a new CEO at Boston Scientific (BSX) has energized and focused the company and created an attractive opportunity for investors. Demand for orthopedic surgery will recover as the economy improves. A small firm called NuVasive (NUVA) is an interesting play with their differentiated products for spine repair.

Disclosure: The Div Guy owns shares of PFE at the time of this post.

Starting a Roth IRA with $25

2010-01-12T05:00:00.006-06:00

I did a search to find a no load (no commision) index mutual fund with the lowest minimum requirement to open an account. The AARP Mutual Funds allow you to open an account with an investment of $25 if you sign up for a monthly contribution of $25 or you can set up an account with a single investment of $100. Additions to the account can be made at any time with a minimum of $25.

Now who can't afford to start an account with the AARP Funds?

You do not have to be an AARP Member to open an account and anyone who is a US Resident and has a Social Security number can invest in the funds. There are no minimum balance fees and a $10 annual maintenance fee charged by the custodian for IRA accounts.

Some other great things about the funds: they offer 4 index funds and a money market, they are managed (sub-advised) by State Street Global Advisors, they have low expenses capped at .50% and you can sign up right online.

I think even most young adults with or without debt issues should give this a try. Take a look at the AARP Aggressive Fund as it has a nice balanced portfolio including some international exposure.

Start an account today! No excuses.

The Div Guy is not associated with or compensated by AARP Funds. I did open two UGMA accounts with AARP Funds for my children.

7 ways to start the new year off right

2010-01-11T05:00:00.003-06:00

Vanguard has a good article online that goes over what you should review in the new year. I review my stocks on a regular basis but I review my mutual fund allocation and IRA allocations at the end of each year. Here is the Vanguard info:

1. Review your financial plan. If your personal situation has changed during the last year—perhaps you got married or bought a new home—see if you're still on track to meet your financial and investment goals. And if you don't have a plan, now's a good time to learn the basics of financial planning.

2. Revisit your asset allocation. The turbulent markets of the past year may have changed your mix of stock, bond, or cash funds. Make sure your portfolio still aligns with your investment plan and rebalance if necessary.

3. Take inventory of your savings. Do you have an emergency savings account? Until last year, many people underestimated the importance of having money available to meet unexpected expenses. If you received a year-end raise or bonus, consider salting it away—you won't miss what you can't spend. You also may want to think about starting an automatic investment plan to ensure you're consistently saving and investing your money.

4. Make the most of your IRAs. Whether you're considering a Roth conversion to take advantage of rules changes in 2010 or maximizing your annual contribution, make sure you take advantage of every opportunity to save for retirement. And don't forget—you still have until the 2009 tax-filing deadline in April to make an IRA contribution for 2009.

5. Keep taxes down. You can't always avoid taxes on your investments, but you can make the bite less painful. Taxes can erode your long-term investment returns, so learn how to be a tax-savvy investor.

6.Control your debt. Don't let excessive debt control you. Creating a budget based on what you have—not on what you can borrow—and spending less can help you take control of debt.

7. Review your estate plan. Make sure the beneficiary designations on your investments and other assets are up to date. If you don't have an estate plan, consider working with an estate planning professional to help you deal with complex financial issues and minimize estate taxes.

Good luck on your 2010 financial plans!

2010 Dividend Plan

2010-01-08T05:00:00.006-06:00

2010 Dividend Income Plan
We plan on growing the yearly dividend income to $6,000 by the end of 2010 from our end of year 2009 balance of $5,468 by reinvesting dividends and investing additional money every month into our stock portfolio held at Zecco. In 2008 and 2009, we saw many dividend cuts that brought down our income considerably.(2009 year end plan $7,000 actual $5,468)

I will sell some stocks in our portfolio that have cut their dividends during 2010. I plan to be a little more conservative with my stock purchases for 2010. I will be focus on increasing stock purchases into our large blue chips stocks that will represent long term value. I will look to reduce some of my bank holding throughout 2010 as well.

Our long term goal is to have $30,000 in yearly dividend by retirement in 2024. Keep in mind, I don't consider this dividend stock portfolio diversified. I have most of our retirement assets in a diversified mutual fund portfolio with Vanguard.

2010 Financial Plan and Review of 2009

2010-01-07T05:00:00.026-06:00

The financial markets of 2009 turned scary in March but ended the year with a nice return. The S&P 500 had a total return (including dividends) of 26.46% for the year. There were also a number of dividend stocks that stopped or decreased their dividend payments throughout 2009.

A few years ago I started tracking our yearly progress towards reaching our retirement goals of having $2 million in retirement assets as well as reaching $40,000 in dividend stock income. I originally wanted to complete both these goals by the time I am 60 which is 14 years from now. But with the market decline in 2008, we will have to add a couple of years to our goal and our new plan is to retire at age 62 which is in 16 years. I have been using Bloomberg's Retirement Planner on their personal finance calculators site to come up with what we will need at retirement.

Retirement Assets
In order to reach our retirement goal, we will need an average investment return of 8.5% along with a 10% contribution to our retirement plans for the next 16 years. I have used $95,000 for our annual household income. I am using 3% for inflation, 2% for expected salary increases and 8% return on investment in retirement. To calculate the amount needed for the end of 2010, I start with our 2009 year end retirement balance of $522,034 which is the balance of our retirement accounts as well as our taxable stock accounts. We then add the 8.5% investment return which is $44,373 for a total of $566,407. Next I add our retirement contributions of $9,500 which is a 10% contribution for a grand total of $575,907 in retirement assets needed at the end of 2010.

As part of our retirement contributions, we will fully fund my wife's Roth IRA's and add some to mine for total IRA contributions of $6,000. My wife will make 6% contributions to her 401(k) and I will contribute 12% to my 403(b) plan.

2010 Retirement Plan Summary
$522,034 2009 year end retirement asset balance
$44,373 8.5% investment return
$9,500 2010 contributions to our retirement accounts
$575,907 2010 year end plan (2009 year end plan $404,432, actual $522,034)

2010 Net Worth Goal
Our 2010 Net Worth goal for the end of the year will be $836,907 which is the increase in retirement assets that includes and 8.5% investment return and $9,500 in contributions for 2010.

2010 Net Worth Goal
$575,907 2010 Year End Retirement Balance
$205,000 House
$12,000 Cash
$8,000 Cars
$3,000 Personal Property
$33,000 529 Accounts
$836,907 Total (2009 Net Worth Plan $683,637, actual $788,767)

Let's hope the 2010 plan goes as well as 2009. I will go over my 2010 Dividend Income Goal on Friday.

Top 20 Dividend Stocks

2010-01-06T05:00:00.016-06:00

Here are the top 20 stocks in my Dividend Portfolio as of 12/31/09 ranked by size of holdings. I know some if these stocks no longer pay dividends but I have keep them for gains as the economy recovers. I will look to sell my stocks that are no longer paying dividends throughout 2010. I will go into more detail when I talk about my 2010 goals later this week.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. Barclays PLC (BCS) UK
4. HRPT Properties Trust (HRP) USA
5. Penn West Energy Trust (PWE) Canada
6. Johnson & Johnson (JNJ) USA
7. Procter & Gamble (PG) USA
8. General Electric Company (GE) USA
9. ONEOK, Inc. (OKE) USA
10. Banco Santander (STD) Spain
11. Cooper Tire & Rubber (CTB) USA
12. American Capital (ACAS) USA
13. Aircastle Limited (AYR) USA
14. Diana Shipping Inc. (DSX) Greece
15. GlaxoSmithKline (GSK) UK
16. Seagate Technology (STX) USA
17. Exxon Mobil Corporation (XOM) USA
18. Deutsche Bank (DB) Germany
19. Duke Energy Corporation (DUK) USA
20. Newell Rubbermaid (NWL) USA

Here are the top 20 holdings of the Tweedy, Browne Worldwide High Dividend Yield Value Fund as of the end of 11/31/09:

1. CNP Assurances France
2. Total SA (TOT) France
3. Novartis AG (NVS) Switzerland
4. Glaxosmithkline PLC (GSK) UK
5. Muenchener Rueckver Germany
6. Unilever NV (UN) Netherlands
7. Emerson Electric Co (EMR) USA
8. Pearson PLC (PSO) UK
9. Philip Morris Intl (PM) USA
10. Diageo PLC (DEO) UK
11. Embotelladoras Arca Mexico
12. Vodafone Group PLC (VOD) UK
13. ConocoPhillips (COP) USA
14. Coca Cola (KO) USA
15. Genuine Parts Co (GPC) USA
16. Johnson & Johnson (JNJ) USA
17. Eni Spa (E) Italy
18. 3M Co (MMM) USA
19. AT & T Inc (T) USA
20. Akzo Nobel (AKZOY) Netherlands

December Dividend Income Update

2010-01-05T05:00:00.006-06:00

My Annualized Dividend Income as of the end of December increased to $5,468 from $5,448 for the month. This means my dividend stocks will pay $5,468 in dividends over the next 12 months.

I made a few dividend stock purchases over the past month from dividend distributions. It looks like the economy has bottomed out and we had no more dividend cuts the last few months of the year.

My Dividend Income Goal for 2009 was $7,000 in yearly dividend income but due to the poor economy and dividend cuts, I had revised that goal to $5,500 and came up $32 short of the new goal. I will come up with new dividend and net worth goals for 2010 later this week.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Wednesday.

December Net Worth Update

2010-01-04T05:00:00.003-06:00

As of the end of December our Net Worth increased to $788,767 from $770,689 for the month which is a 2.35% increase. The last day of trading for 2009 ended on a down day but it is great to see the market recover from the March lows. Our Net Worth at the end of 2008 was $629,685 so we are up quite a bit from a year ago but still below year end 2007 of $820,314. I am optimistic about the markets recovery in 2010 and hope to see companies add positions and unemployment figures start to decrease.

The breakout is as follows:
ASSETS
Retirement Accounts $395,250
Taxable Accounts $126,784
Cash $19,140
Home $205,000
Cars $8,500
Personal Property $3,000
Kids 529 Accounts $31,093

Here is the summary for this month:

Our Net Worth increased the past month due mostly to the raise in the stock market. We are still debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received around $200 in dividends for the month and have used the cash from these dividends to make additional stock purchases of our dividend stocks but I have not been adding much extra money.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. I continued funding our Roth IRA's each month.

I will post my Dividend Income Update on Tuesday.

Top 10 Dividend Stocks: B Team

2009-12-08T05:00:00.005-06:00

Barron's has a recent post about quality dividend stocks for retirement. They pick their top 10 favorites. Here is the second part of Barron's article which lists the B Team of dividend stock picks. 10 for the Money by Vito J. Racanelli

Which companies are worthy of a retiree's income portfolio? Barron's has selected 10 for the A team, plus a second 10 that didn't quite make the cut, but easily could have. The A team is listed in the table, The Best Bets; the B Team is in the table, Lots of Bench Strength.

Company (Ticker) Yield
Abbott Labs (ABT) 3.0%
AT&T (T) 6.3%
Coca-Cola (KO) 2.9%
Emerson Electric (EMR) 3.2%
Lockheed Martin (LMT) 3.3%
Merck (MRK) 4.3%
Microsoft (MSFT) 1.7%
Telefonica ADR (TEF) 5.2%
United Tech (UTX) 2.3%
Wal-Mart (WMT) 2.0%

Disclosure: The Div Guy owns shares of ABT and T at the time of this post.

Top 10 Dividend Stocks

2009-12-07T05:00:00.007-06:00

Barron's has a recent post about quality dividend stocks for retirement. They pick their top 10 favorites. 10 for the Money by Vito J. Racanelli

Special Report on Retirement: Folks approaching retirement should consider buying high-quality, dividend-paying stocks to bulk up their portfolios. Here are our top 10 picks.

Which companies are worthy of a retiree's income portfolio? Barron's has selected 10 for the A team, plus a second 10 that didn't quite make the cut, but easily could have.

Before we get into specifics, a little more background: A study of 1,000 Americans done by Scottrade in January found that 75% of the polled baby boomers --Americans born anytime from 1946 through 1964 -- fear that full retirement won't be an option for them.

If there is a silver lining, it's that it is probably an auspicious time for buying and holding large-cap, high-quality, dividend-paying and dividend-growing stocks. "Right now, you can find leading blue-chip, high-quality stocks at below-average multiples that are raising dividends," says John Carey, a fund manager at Pioneer Investments.

Banco Santander (STD)
With many of the biggest U.S. and European banks in trouble or under pressure, this Madrid-based giant offers financial strength and geographic diversity. In 2009, once again it will probably be one of the world's most profitable banks.

Chevron (CVX)
Big integrated energy outfits like this American oil explorer offer both a dollar hedge (because crude rises when the dollar falls) and exposure to two of the world's most important commodities: oil and natural gas.

Intel (INTC)
The premier maker of microprocessors, semiconductor chips, and sundry other computer and communications gear is involved in cyclical businesses, but that's about the worst you can say about it. Intel is the 800-pound gorilla in the industry, and its manufacturing-scale and global-reach advantages would be hard to replicate, even in the tech world, where change happens quickly.

Johnson & Johnson (JNJ)
This is perhaps the quintessential dividend stock. While J&J was named the most respected company in a recent Barron's poll, its stock doesn't get the respect it deserves. J&J manufactures everything from Tylenol and Band-Aids to high-tech orthopedic hip replacements and coronary stents, and numerous pharmaceuticals.

McDonald's (MCD)
Because its shares haven't done much in the past two years, few may know that the home of the Golden Arches has been the best-performing Dow industrial stock since 2002, up about 300% in that span. That's when the world's biggest fast-food chain slowed its expansion and redeployed its prodigious cash flow toward upgrading existing restaurants and menus, adding salads and fruits that customers wanted. All this boosted same-store sales sharply. McDonald's continues to add new items, such as premium Angus burgers and McCafe coffee.

Nestlé (NSRGY)
Like J&J, the Swiss behemoth is steady and solid as the tortoise in the race with the hare. The world's largest food processor boasts wide product diversity and geographic reach, in the West and in fast-growing emerging markets, where the company is making a big push. Its balance sheet is probably the strongest in the food industry, giving it the wherewithal to undertake bolt-on acquisitions.

Novartis (NVS)
This leading manufacturer of drugs -- from cardiovascular medicines like Diovan to oncology and neuroscience compounds, as well as vaccines and diagnostic tests and over-the-counter products such as Excedrin -- also gives international exposure and would help diversify a retirement portfolio away from the dollar. The Basel, Switzerland-based firm's American depositary receipts have a dividend yield of 3.2%, and the payout has risen, on average, 15% annually over the past five years.

PepsiCo (PEP)
In the never-ending cola wars, PepsiCo is our selection because it offers a bit more sales growth than Coca-Cola (KO), which made our second list. PepsiCo is expanding in fast-growing markets like Russia and China, and through the introduction of new products like naturally sweetened beverages, in an already-diverse portfolio, according to Bahl & Gaynor's McCormick.

Procter & Gamble (PG)
Cincinnati-based P&G is another of the U.S.'s great franchises, with a widely diverse manufacturing, product and customer base around the world. It would be difficult to find a country where it doesn't either make or sell one of its laundry, beauty-care, food or health-care products. The stock is just below the market multiple and little changed for the year, with a 2.8% yield, the highest it's been in some time, notes Pioneer's Carey. "It's a strong company in a lot of business areas."

Verizon Communications (VZ)
This telecom has the highest dividend yield in our bunch, 6.2%, because many investors fear it eventually won't be able to replace revenue from the industry's ongoing loss of land lines. But through its Verizon Wireless joint venture with Vodafone (VOD), Verizon is the largest U.S. wireless-service provider, notes Darren Pollock, a portfolio manager at Cheviot Value Management. "Verizon continues to add wireless subscribers at a good clip, even without the ability to offer hot products like Apple's iPhone." Its network is generally considered the most reliable in the U.S.

Disclosure: The Div Guy owns STD, JNJ, PEP and PG at the time of this post.

At Pepsi(PEP), the Glass Is Half Full

2009-12-04T05:00:00.003-06:00

Barron's has an interesting article on Pepsi by By Jacqueline Doherty. Here are the highlights. At Pepsi, the Glass Is Half Full

Investors have turned their backs this year on consumer-staples stocks, while chasing after companies that promise faster growth. In PepsiCo's case, they've had added reason to look elsewhere, given declining revenue and profits in the company's North American beverage division -- home of Pepsi products, Gatorade sports drinks, Tropicana juices, Aquafina water and other familiar brands.

Pepsi has suffered as cash-strapped consumers have traded down to private-label products -- or quenched their thirst at the kitchen sink.

CEO Indra Nooyi's recent statement that Pepsi is targeting 11% to 13% growth next year in earnings per share, excluding the impact of currency translation, and assuming the bottling deals close on schedule, early in 2010.

"We see a path for double-digit earnings growth over the next three years," says Bill Pecoriello, CEO of ConsumerEdge Research, who has an Outperform rating and a 12-month price target of 72 on Pepsi's shares.

Mario Gabelli, chairman and CEO of Gamco Investors, which manages mutual funds, is even more optimistic, noting that in the next few years, "the stock [could] trade 50% to 60% higher, which, with the dividend, gives you a pretty good return."

Gabelli, whose funds own Pepsi shares, bases his analysis on what he thinks the company's parts could be worth in private-market transactions. Pepsi pays a dividend of $1.80 a share, and yields 2.8%.

As Pecoriello and other Pepsi fans see it, the company has many levers it can use to boost revenue and meet its earnings goals. Even if just a few of them work, PepsiCo's shares soon could be bubbling higher.

Disclosure: The Div Guy owns share of PEP at the time of this post.

Top 20 Stock Holdings

2009-12-03T05:00:00.005-06:00

Here are the top 20 stocks in my Dividend Portfolio as of 11/30/09 ranked by size of holdings.

1. Kinder Morgan Energy (KMP) USA
2. Barclays PLC (BCS) UK
3. DCP Midstream Partners (DPM) USA
4. HRPT Properties Trust (HRP) USA
5. Penn West Energy Trust (PWE) Canada
6. Procter & Gamble (PG) USA
7. General Electric Company (GE) USA
8. Johnson & Johnson (JNJ) USA
9. American Capital (ACAS) USA
10. Banco Santander (STD) Spain
11. Diana Shipping Inc. (DSX) Greece
12. ONEOK, Inc. (OKE) USA
13. Exxon Mobil Corporation (XOM) USA
14. Cooper Tire & Rubber (CTB) USA
15. GlaxoSmithKline (GSK) UK
16. Aircastle Limited (AYR) USA
17. Deutsche Bank (DB) Germany
18. Seagate Technology (STX) USA
18. Pfizer. (PFE) USA
20. Duke Energy Corporation (DUK) USA

Here are the top 10 holdings of the Vanguard High Dividend Yield Index ETF. The fund employs a “passive management”—or indexing—investment approach designed to track the performance of the FTSE® High Dividend Yield Index. Holdings as of 10/31/09:

1 Johnson & Johnson
2. JPMorgan Chase & Co.
3. Chevron Corp.
4. AT&T Inc.
5. General Electric Co.
6. Pfizer Inc.
7. Wells Fargo & Co.
8. Bank of America Corp.
9. Coca-Cola Co.
10. Intel Corp.

November Dividend Income Update

2009-12-02T05:00:00.007-06:00

My Annualized Dividend Income as of the end of November increased to $5,448 from $5,381 for the month. This means my dividend stocks will pay $5,448 in dividends over the next 12 months.

I made a few dividend stock purchases over the past month from dividend distributions. It looks like the economy is showing some signs of stabilizing and we will have fewer dividend cuts for the rest of the year.

My Dividend Income Goal for 2009 was $7,000 in yearly dividend income but due to the poor economy and dividend cuts, I have now revised that goal, I think $5,500 would be a much more realistic and challenging goal over the next few months.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Thursday.

November Net Worth Update

2009-12-01T05:00:00.001-06:00

As of the end of November our Net Worth increased to $770,689 from $747,078 for the month which is a 3.16% increase. The markets took a little hit the other day from the Dubai fallout but we are still waiting to see if the economy slowly starts to recover.

The breakout is as follows:
ASSETS
Retirement Accounts $382,311
Taxable Accounts $123,776
Cash $17,488
Home $205,000
Cars $8,750
Personal Property $3,000
Kids 529 Accounts $30,364

Here is the summary for this month:

Our Net Worth increased the past month due mostly to the raise in the stock market. We are now debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received around $800 in dividends for the month and have used the cash from these dividends to make additional stock purchases of our dividend stocks but I have not been adding much extra money.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. I continued funding our Roth IRA's each month.

I will post my Dividend Income Update on Wednesday.

New Dividend Stock Purchase: AT&T (T)

2009-11-20T05:00:00.011-06:00

After analyzing communication stocks from Monday's screen, I decided to purchase shares of AT&T (T).

Company Description

AT&T is the dominant local phone company in 22 states, serving about 55 million local phone lines and 15 million high-speed Internet users. The firm also provides phone and data services, such as Web hosting and data transport, to businesses nationwide, notably large corporations. AT&T owns 100% of AT&T Mobility, the second-largest U.S. wireless carrier with 77 million customers. The firm also owns a directory publishing business and a handful of international investments.

AT&T has been growing it's wireless revenue with help from iPhone and continues to roll out of U-verse fiber-based network which offers video and faster-speed broadband services. U-verse has higher profit margins and is increasing the companies profitability.

Strong Brand and Dividend Income

AT&T still has strong brand loyalty and an improved balance sheet. The 6% dividend yield is a big bonus as well. The dividend payout was 52% of the $13.9 billion of free cash flow which should provide ample cushion for continued dividend payments.

Disclosure: The Div Guy owns shares of T at the time of this post.

Americans Not Saving For A Rainy Day

2009-11-19T05:00:00.006-06:00

I just read an article on NPR.org that talked rain day funds. About half of Americans don't have $2,000 for a rain day fund. I find it amazing and sad that so few people can save money. Here are the highlights of "Americans' Savings Offer Little Shelter For Rainy Day" by Marilyn Geewax.

For nearly two years, the U.S. economy has been struggling with a recession brought on by excessive borrowing, both for home mortgages and consumer purchases. Economists say many people have learned a lesson; the personal savings rate is inching back up as more Americans embrace the "new frugality."

Still, half of U.S. households don't have even modest savings, according to a new study conducted by TNS Group, a market researcher, with help from professors at the Harvard Business School and Dartmouth College.

The researchers conducted a survey to see how many households could round up $2,000 within 30 days to cope with an emergency, such as having a car breakdown or needing a major home repair. About half said that even if they turned to relatives for help, they could not come up with $2,000 for a "rainy day," the study found.

The tougher credit environment makes it even more important for households to have their own savings to handle emergencies, according to one of the researchers, Dartmouth economics professor Annamaria Lusardi. The personal savings rate has crept back up from zero to about 3 to 4 percent, but is still about half the norm of a generation ago.

Lusardi says most Americans continue to live with what she calls "financial fragility." That is, families may be living a middle-class lifestyle, but are one job loss, or even one car breakdown, away from tumbling into real financial trouble.

She said many consumers don't study the interest rate and fee terms of their credit cards, and suffer from "financial illiteracy." That is, they don't realize just how expensive it is to borrow money — and how important it is to have cash available for unexpected expenses.

She recommends that families save in a "slow and steady" manner, always setting aside some cash each week to create a "rainy day" fund of at least $2,000.