Archives for December 2017

The Dow’s Most Dependable Dividend Payers Part III

December 28, 2017 By Richard Young

Continuing with Young Research’s dividend dependability rankings, the group of stocks listed below score best out of the 30 stocks in the Dow in terms of dividend dependability. Many of the most dependable dividend payers in the Dow have below average yields, but above average dividend growth prospects.

I have again listed the stocks in alphabetical order and provided the indicated dividend yield, projections for dividend growth in 2018, and commentary on why the stock scored where it did in terms of dividend dependability.

wdt_ID	Company	Indicated Yield	CY 2018 Proj. Div. Growth	Comments
1	WAL-MART STORES INC	2.08	1.97	A solid balance sheet, low earnings variability, and strong dividend coverage put WalMart in the top group for dividend dependability
2	VISA INC-CLASS A SHARES	0.69	17.39	Visa's strong earnings growth prospects, high dividend coverage, and low earnings variability make it one of the Dow's most dependable dividend payers.
3	UNITEDHEALTH GROUP INC	1.35	17.57	Strong growth and dividend coverage as well as low earnings variability put UNH in the top group.
4	PROCTER & GAMBLE CO/THE	3.00	1.87	A solid balance sheet, moderate growth, a good qualitative score, and a strong record of dividend growth keep P&G in the Dow's top group despite below average dividend coverage.
5	NIKE INC -CL B	1.30	11.11	Above average dividend coverage, a strong balance sheet, and moderate earnings growth pushed Nike into the top group.
6	MICROSOFT CORP	1.97	7.55	Strong earnings growth, solid dividend coverage, and a AAA balance sheet drive Microsoft's dividend score.
7	JOHNSON & JOHNSON	2.38	4.82	A solid balance sheet, a strong record of dividend growth, and low earnings variability make JNJ one of the Dow's most dependable dividend payers.
8	HOME DEPOT INC	1.89	6.74	Strong earnings growth, good dividend coverage, an above average earnings variability score, and a good balance sheet pushed HD into the top group.
9	BOEING CO/THE	2.32	20.42	Exceptional earnings growth, good dividend coverage, and a solid balance sheet helped Boeing.
10	3M CO	1.99	5.53	Solid earnings growth, moderate dividend coverage, low earnings variability, and a strong balance sheet put 3M in the top group for dividend dependability.

You can read part II here and part I here

Merry Christmas – Boogie-Woogie Choo-Choo Train

December 25, 2017 By Richard Young

Crash II, Preview

December 15, 2017 By Richard Young

Breaking news at youngsworldmoneyforecast.com will post next week!

You will learn exactly why investors today are being misled by both the Dow 30 and the S&P 500.

You will find out why I expect historically poor performance for most investor portfolios over the next five years.

You will read the complete details of an easy-to-deploy strategy that will help you ride out the coming storm with a positive total return.

You will understand exactly why I use this strategy myself and at my investment management company.

You will not want to miss the boat here.

The Dow’s Most Dependable Dividend Payers Part II

December 15, 2017 By Richard Young

Continuing with Young Research’s dividend dependability rankings, the group of stocks listed below rank in the middle of the pack among all 30 Dow stocks on Young Research’s dividend dependability score. In this group you will find a nice balance between yield and dividend dependability.

wdt_ID	Company	Indicated Yield	CY 2018 Proj. Div. Growth	Comments
1	CATERPILLAR INC	2.13	1.94	Average dividend coverage and decent earnings growth help CAT overcome one of the highest earnings variability rankings in the Dow
2	WALT DISNEY CO/THE	1.52	7.69	Above average dividend coverage along with average growth, financial strength, and earnings variability push Disney into group two.
3	MCDONALD'S CORP	2.32	6.79	Low dividend coverage and below average financial strength keep McDonalds out of the top 10.
4	INTEL CORP	2.51	6.03	Low scores on qualitative factors along with average scores on the quantitative factors put Intel in the middle of the pack group.
5	VERIZON COMMUNICATIONS	4.49	2.05	Low dividend coverage, below average financial strength, and below average growth prospects put Verizon in group two.
6	PFIZER INC	3.50	6.25	Below average dividend coverage, high earnings variability, and a strong balance sheet result in a tier two ranking for Pfizer.
7	TRAVELERS COS INC/THE	2.17	3.89	Average across the board rankings place Travelers in second grouping for dividend dependability.
8	UNITED TECHNOLOGIES CORP	2.25	5.88	Average ratings for growth, dividend coverage, and financial strength keep UTX in the middle tier.
9	COCA-COLA CO/THE	3.22	5.41	Coke's low dividend coverage and low earnings growth keep the company out of the Top 10 for dividend dependability.
10	APPLE INC	1.46	9.76	Solid earnings growth, strong dividend coverage, and a strong balance sheet help Apple, while low qualitative factors drag it down.

You can read part I here.

Crash!

December 12, 2017 By Richard Young

I have been investing since the spring of 1964, and I do not remember being as uncomfortable with the health of the financial markets as I am today. Given that unpleasant prelude, I also want to advise all investors that my own investing position has not changed since I began investing 53 years ago.

I do not market time, i.e., moving in and out of the markets. I pay zero attention to daily, weekly or monthly price movements and have never made an earnings projection in my life.

I do not keep tabs on the exact value of my own account. My assets are spread around with custodial friends whom I have known for decades. Not a lot changes for me year to year. Dust continues to gather on old portfolio friends, some of which I often forget I own because they have been with me so long. I tend not to break off long associations with old friends, whether individuals or portfolio proxies. More important, I never lose a minute’s sleep or worry about tomorrow.

You may find the Dick Young method of investing boring. If you had any idea of exactly how little money I started with and how much I have today—strictly as a result of interest, dividends and compound interest—you might, for a second, gasp. I do not rate highly in terms of exciting returns. Quite the opposite. Boring pretty well sums up the Dick Young lifetime investment ideology.

I have accomplished what I have with only Debbie’s help. I have never had any partners or any debt. And I don’t listen to the views of many, except perhaps those of Dave Hammer, my longest friend in the investment industry.

I am a long way from an investment genius and could probably name countless investment industry folk who are a whole lot smarter than am I. I loved Shaker Heights High School, but rarely studied. Eventually I did graduate, much to my own as well as my MIT-alum father’s great surprise.

I have little use for today’s Marxist-centric, ridiculously priced college tuition structure or academia in general. Given that, I remain loyal to Babson College, which I loved and where I did study. I actually managed to escape with a great degree due 100% to a newly gained ability to concentrate when I actually cared about the material I was given.

So, as you can see, I have been on a well-worn course for a long time, and, yes, I have learned a lot along the way. You may even conclude that I just might be able to offer you and your family a small bit of intelligence, comfort and support as you proceed along your own investing career. By this time, you probably clearly understand that there are areas where you cannot expect me or my investment management company to be of any help whatsoever.

I started off my warning letter to you with the word crash because without a number of prescient moves our much maligned (due in no small measure to his own shoot-from-the-hip tweets) president has made, my projected crash undoubtedly would have already set upon us.

We all have to play the hand we’re dealt and, for each of us, the hope is that our individual intuition can carry the day. I wish all of you a Happy New Year—one that benefits you and makes you comfortable given your individual goals and responsibilities.

My best advice to you is to start the New Year off with a brand new resolution:

Do not do stupid things and you will greatly improve your odds of concluding 2018 with a smile on your face.

Warm regards,

Dick

The Dow’s Most Dependable Dividend Payers

December 8, 2017 By Richard Young

Which companies are the most dependable dividend payers in the Dow? That may seem like an odd question to ask considering the Dow is comprised of some of America’s most successful blue-chip companies. But while Dow stocks may have more reliable dividends than your average company, dividend dependability should not be taken for granted. General Electric, once considered America’s most venerable blue-chip industrial, slashed its dividend last month. Citigroup, Bank of America, (both former Dow members), and JP Morgan were once among America’s most respected banks, but all three cut their dividends during the financial crisis.

Young Research developed a dividend dependability ranking to provide you with a snapshot of the Dow stocks that have the most secure dividends today. If you are a retired investor who relies on quarterly dividend checks to fund a portion of your retirement spending, Young Research’s rankings can help you minimize the chances of a cash flow shortfall.

The rankings are based on a variety of quantitative and qualitative factors including dividend coverage, earnings variability, financial strength, and growth prospects.

Over the coming weeks, I will provide you with insight and commentary on all 30 Dow stocks. This week I focus on the ten stocks that rank lowest in terms of dividend dependability.

The Dow’s Least Dependable Dividend Payers

The ten stocks below, listed in alphabetical order, are ranked lowest for dividend dependability by Young Research. For each stock I have provided the indicated dividend yield, projections for dividend growth in 2018, and commentary on why the stock scored where it did in terms of dividend dependability. Note that a low dividend dependability ranking does not signal an imminent dividend cut. A low ranking does indicate that the risk of a dividend cut is greater than it is for the average Dow company, especially in the event of adverse economic, business, or market conditions.

wdt_ID	Company	Indicated Yield	CY 2018 Proj. Div. Growth	Comments
1	MERCK & CO. INC.	3.49	2.10	Above average earnings variability and below average growth projections drag down ranking.
2	JPMORGAN CHASE & CO	2.14	7.70	Lower than average financial strength and qualitative factors bring down ranking.
3	INTL BUSINESS MACHINES CORP	3.89	6.70	IBM barely missed the second grouping. Qualitative factors and low earnings growth projections dragged it down.
4	GOLDMAN SACHS GROUP INC	1.21	8.60	Above average earnings variability, lower than average financial strength, and qualitative factors bring down ranking.
5	GENERAL ELECTRIC CO	2.71	-50.00	One of highest earnings variability ratings kept GE, even with a reduced dividend, in the lowest grouping.
6	EXXON MOBIL CORP	3.73	2.60	A high payout ratio, high earnings variability, and qualitative factors pushed Exxon into the bottom grouping.
7	DOWDUPONT INC	2.13	0.00	High earnings variability, below average growth projections, and lower than average financial strength bring down ranking.
8	CISCO SYSTEMS INC	3.09	10.60	Lower earnings growth projections and qualitative factors drag Cisco down.
9	CHEVRON CORP	3.61	1.80	High payout ratio, high earnings variability, and qualitative factors drag down ranking.
10	AMERICAN EXPRESS CO	1.42	9.00	Above average earnings variability, lower than average financial strength, and qualitative factors bring down ranking.

As you may have noticed, a number of the least dependable dividend payers offer above average yields. Dividend dependability and dividend yield are inversely related. You will find as I run through all 30 Dow stocks, that the companies with the most dependable dividends have below average yields. How you choose to successfully balance dividend dependability and yield in your portfolio will depend on your own investment objectives and risk tolerance. Dividend dependability isn’t the only factor that should be used to craft dividend portfolios, but it is an important factor.

Dick Young’s Research Key: Anecdotal Evidence Gathering

December 4, 2017 By Richard Young

Originally posted September 5, 2017.

After a nearly 40-year sabbatical, I am pleased to announce that a newly reconfigured Young’s World Money Forecast is set for its revival. Investors will have a cutting-edge, unique global investment tool that they can draw upon daily.

If your life savings, your business pension fund, or your company IRA program is based on the historical research, writing and advice from Dick Young, you will be off and running with Young’s World Money Forecast (YWMF) back on your side.

YWMF is aimed at investors like you who hold dividends, interest, and compounding front and center in the investing process. I will continue to be on your side as I have been for so many international and domestic investors since my initial YWMF days in 1978. I want you to feel like you are part of an exclusive investment club.

My research and writing for the past 50 years has been built on the twin powerhouse, high-octane engine of inference reading and boots-on-the-ground anecdotal evidence gathering. In 1992, when Debbie and I bought our first legendary Big Twin Harley Davidsons, much of my anecdotal evidence gathering was conducted on two wheels. After 120,000+ miles and more than 25 years on the roadways and byways of North America, we have put the kickstands down on our Harleys for the last time. (They will be auctioned off sometime this fall for a charity event that supports Wounded Warriors.)

Since 2010, Debbie and I have moved much of our anecdotal evidence gathering to Europe, centering on twice-annual research trips in Paris. We just returned from a two-week sweep through France, the Baltics, Scandinavia, and St. Petersburg, Russia. Talk about a shocker of a trip, which I’ll get into in my upcoming e-missives. It ain’t what you read.

To receive an instant announcement of the eagerly awaited return of Young’s World Money Forecast, sign up here. And, of course, you are under no obligation or risk. We do not release our roster of names of club members to anyone—ever. After all, that’s the advantage of a private investment club—integrity and privacy.

Membership in Dick Young’s unique club for serious international investors will cost nothing—not today or ever. Why is that? Because there’s nothing I love more than researching and analyzing for our investment management company on the ramifications global affairs and politics have on safe, sensible investing. What I hate more than anything is the hype, unethical advice, and pie-in-the-sky greed foisted on investors.

You have been with me for many years, if not decades, and I appreciate the thoughtful notes I’ve received over the course of our time together, especially recently with my retiring from writing Richard C. Young’s Intelligence Report. I thank each of you.

I am inviting you to join my exciting new investment project. After 40 years, it’s liberating not to be tied down to a monthly deadline with its archaic snail-mail delivery system and resulting delay. From the time I finished writing and the publisher fact checked, formatted, and sent the issue to the printer, it took nearly two weeks before subscribers received IR.

With YWMF, you’ll get the latest in my thoughts on world affairs/investments as they happen. It’s just that easy. And I nearly forgot to mention, in this escalating age of social media and Internet intrusion, you’ll never see an outsider’s annoying pop-up ad/video/jiggling whatever on my new YWMF website. No outsiders allowed!

Welcome aboard.