Stock Advice Thread

[LineSkiCat14]

I knew what dividends were, but until now, haven't really looked into investing in dividend paying stocks. I kind of thought it was something unattainable for me. Reading into it though, it seems pretty straight forward:

You want high yields so you can get more "bang for your buck"...
But high yield doesn't always mean good things. A company might not be re-investing into growth by paying that much of a dividend.

Does anyone have real world examples of how they invest in Dividend stocks and what they are getting? Like "I have stock x, this amount of shares, and here's how my quarterly dividends look". Has anyone been burned by Dividend Stocks?

 

[lz]

I knew what dividends were, but until now, haven't really looked into investing in dividend paying stocks. I kind of thought it was something unattainable for me. Reading into it though, it seems pretty straight forward:

You want high yields so you can get more "bang for your buck"...
But high yield doesn't always mean good things. A company might not be re-investing into growth by paying that much of a dividend.

Does anyone have real world examples of how they invest in Dividend stocks and what they are getting? Like "I have stock x, this amount of shares, and here's how my quarterly dividends look". Has anyone been burned by Dividend Stocks?

Sounds like jameslee can help you. Many people used to buy blue chip dividend stocks way back in the 1900s, pass them on to children, never sell-GE, GM, Coca Cola, PZE, etc. Then technology stocks, nonbrand products, generic drugs, Japanese vehicles, etc, came into play as competition and it wasn’t easy anymore. Be fearful of stocks paying more than 2-3% dividend, then you begin to wonder what’s wrong with a company paying 8-10% dividend? You might enjoy a couple of years, then the bottom falls out on some of them.

 

[jameslee32]

When I was working, I was able to slowly accumulate about $100,000 in a taxable account of stocks in addition to my 403B contributions (converted to Ameritrade IRA in retirement). Thus at early retirement (59) I was able to supplement my pension and not having to touch the IRA for several years, only paying capital gains as I sold off the taxable account and drew out of a smaller tax free Roth IRA. Then social security kicked in, so I’m fine and have fun investing our IRAs, except I now want more than 10% Cash! I can’t say for sure it was the greatest strategy, but it sure worked for me.

I get it. I'm younger and still working but could retire at that age and be in the same boat with a very similar strategy. I appreciate any retirement advice I can get while I'm still a couple years away. Every time I think about working until age 70 1/2, my 59 1/2 thoughts start kicking in. haha

 

[lz]

I get it. I'm younger and still working but could retire at that age and be in the same boat with a very similar strategy. I appreciate any retirement advice I can get while I'm still a couple years away. Every time I think about working until age 70 1/2, my 59 1/2 thoughts start kicking in. haha

I have friends with no hobbies working onward to 70 and I get it, my brother has been a consultant for his old company after retiring for 10+ years (nice situation), I did the same job my last 30 years, didn’t want to get jaded, dealt with cancer in 1993-94, told myself then I wanted to retire early if possible, we accomplished the same for my wife at age 61. We weren’t huge wage earners nor tight wads, just got more serious about finances in our 40s, built our first house at 55, paid it off recently, I enjoy watching/reading sports, investing, spoiling nieces and nephews, some travel and duck hunting in retirement, never bored!

 

[jameslee32]

I knew what dividends were, but until now, haven't really looked into investing in dividend paying stocks. I kind of thought it was something unattainable for me. Reading into it though, it seems pretty straight forward:

You want high yields so you can get more "bang for your buck"...
But high yield doesn't always mean good things. A company might not be re-investing into growth by paying that much of a dividend.

Does anyone have real world examples of how they invest in Dividend stocks and what they are getting? Like "I have stock x, this amount of shares, and here's how my quarterly dividends look". Has anyone been burned by Dividend Stocks?

Just don't sacrifice growth stocks for the sake of having a dividend stock but also be on the lookout for those Goldilocks stocks that give you both. BA has been perhaps the best example recently. I remember thinking about it at $60 and missed out.

I will say now might be the time to start a small position in dividend paying stocks, but you really have to have a lot of conviction once interest rates start rising again because it will be painful. This is the moment it takes discipline to buy even more. I don't have a specific example right now but compounding dividends and diversification are your friends.

 

[LineSkiCat14]

Good stuff.. yes reading into the balance of Growth Vs Dividend. What's the point of some dividends if the stock isn't growing, or worse, it's starting to fail? Interesting stuff.

So what's next? I have my Roth and 401k, but have yet to open my own investment account (still very much a amateur, and I'm not surer how much day-to-day trading I'd be comfortable with). DO you just buy individual stocks with dividends? I imagine Austin' link above is a good one to compare dividend stocks. Can you get some sort of Index that has dividend stocks or does it not work that way?

I think my biggest hurdle with individual investing is not being sure how much time I'll devote into it. I don't want to spend an hour or two a day making changes and keeping an eye on everything. I'll forget, won't stay on top of it. I'm a bit more "set it and forget it type".. but dabbling in dividend stocks seems like an OK spot to get started.

 

[lz]

Good stuff.. yes reading into the balance of Growth Vs Dividend. What's the point of some dividends if the stock isn't growing, or worse, it's starting to fail? Interesting stuff.

So what's next? I have my Roth and 401k, but have yet to open my own investment account (still very much a amateur, and I'm not surer how much day-to-day trading I'd be comfortable with). DO you just buy individual stocks with dividends? I imagine Austin' link above is a good one to compare dividend stocks. Can you get some sort of Index that has dividend stocks or does it not work that way?

I think my biggest hurdle with individual investing is not being sure how much time I'll devote into it. I don't want to spend an hour or two a day making changes and keeping an eye on everything. I'll forget, won't stay on top of it. I'm a bit more "set it and forget it type".. but dabbling in dividend stocks seems like an OK spot to get started.

James and Austin can probably give you more specific individual stock dividend advice, and yes, there are some very good dividend etfs probably perfect for you if you start a taxable investment account (buy and hold, no particular reason to sell unless impatient like I am). You might also want a little VOOG, a fine S&P 500 etf to give you some extra growth.

 

[Willy4UK]

Austin gave me some great feedback on some mutual funds. Any other ones out there that i should be getting long term?

 

[AustinTXCat]

I knew what dividends were, but until now, haven't really looked into investing in dividend paying stocks. I kind of thought it was something unattainable for me. Reading into it though, it seems pretty straight forward:

You want high yields so you can get more "bang for your buck"...
But high yield doesn't always mean good things. A company might not be re-investing into growth by paying that much of a dividend.

Does anyone have real world examples of how they invest in Dividend stocks and what they are getting? Like "I have stock x, this amount of shares, and here's how my quarterly dividends look". Has anyone been burned by Dividend Stocks?

Yes, burned by National City (NCC) during the financial crisis. Watched 600+ shares, yielding 3.5% and offering discounts on purchases (3%) and dividend reinvestment, implode from upper-30s all the way down to under $4/share. PNC bank purchased the accounts and stock rolled over.into PNC shares.

If investing in high-dividend yielding stocks, first perform a reality check along with research.

When interest rates are low, stocks will grow. When interest rates are high, stocks will die. My mother's favorite stock market related saying. Partly true. Couple reasons for the Big Food and PG share-price collapse. First, failure to meet earnings and projected earnings potential going forward. Next, fed raised interest rates. If such moves happen, higher yielding issues sometimes suffer. Investors flock to bonds for more stability.

Research a few key factors before committing. Examine Price/Earnings (PE) ratio, Earnings Per Share (EPS) and forward dividend and yield. In General Mills (GIS) case, numbers are as follows:

Share price: $42.64
PE ratio: 11.41 (comparatively low based on current market)
EPS: $3.74
Div: $1.96.
Yield: 4.42%
Payout ratio: 52.14%

GIS is a no-brainer for me. Plus, I really like some of their brands, such as Betty Crocker (Suddenly Salad) and Green Giant. Boxtops for Education is a cool program. Keep it quiet, but I actually save and sell those boxtops every year on eBay. For the very long term, look more at the company itself than simply share prices.

PG actually scares me a little because although it is a 30 Dow Industrials member, current payout ratio is 73% or $3.75 - $2.87. I'm easing more into that issue via DRiP.

Finally, look at taxes. For an IRA/401K, big dividend yielding stocks are great holdings because of tax implications -- or none, in other words. For ordinary accounts, beware.

 

[UK_Dallas]

I may be crazy but I've got to think that if Amazon keeps putting companies out of business then that will draw more and more scrutiny from the govt, potentially leading to it being broken up.

 

[Willy4UK]

I may be crazy but I've got to think that if Amazon keeps putting companies out of business then that will draw more and more scrutiny from the govt, potentially leading to it being broken up.

That's why Bernie Sanders needs to replace Bezos

 

[lz]

Exxon Mobile is paying a generous 4% divy right now which is nice security in a somewhat turbulent market. However I'm out of all oil stocks. There is a glut of crud as the shift to natural gas and renewables continues to replace oil. There may be some short term gains to be had but long term I don't see much of a future.

Why I’m not good with oil investing, for every argument for gluts, I read these:
"People are throwing out the $100 level for oil. I don't have that as my base case, but I could see us getting there," Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC's "Futures Now" on Thursday.

 

[AustinTXCat]

Austin gave me some great feedback on some mutual funds. Any other ones out there that i should be getting long term?

Bro, rotate an account over to the Fidelity Contrafund (FCNTX). I've been in it since 2006. Contribute monthly or quarterly. Great returns over the years. Rollover from my last job. In that particular account, I've got 1/3 in cash. Breakdown is as follows.

Cash (QHSIQ): 36%
FUSEX: 33%
FCNTX: 31%

Bear market gonna happen. Hold the cash and buy when down. Money market funds now paying above 1.5%. Should go higher.

 

[AustinTXCat]

Dividend Channel is your friend for high-yielding dividend stocks. For my Ameritrade IRA, I'm also into SALM and DVD. Both are "rightwing" issues, especially SALM. SALM owns Christian radio stations and rightwing websites (HotAir). I'm agnostic as f*ck. Haven't been to church in over 30 years.

Look past the noise and go with Yahoo fiance analyst recommendations. Awesome dividend.

 

[lz]

Yes, burned by National City (NCC) during the financial crisis. Watched 600+ shares, yielding 3.5% and offering discounts on purchases (3%) and dividend reinvestment, implode from upper-30s all the way down to under $4/share. PNC bank purchased the accounts and stock rolled over.into PNC shares.

If investing in high-dividend yielding stocks, first perform a reality check along with research.

When interest rates are low, stocks will grow. When interest rates are high, stocks will die. My mother's favorite stock market related saying. Partly true. Couple reasons for the Big Food and PG share-price collapse. First, failure to meet earnings and projected earnings potential going forward. Next, fed raised interest rates. If such moves happen, higher yielding issues sometimes suffer. Investors flock to bonds for more stability.

Research a few key factors before committing. Examine Price/Earnings (PE) ratio, Earnings Per Share (EPS) and forward dividend and yield. In General Mills (GIS) case, numbers are as follows:

Share price: $42.64
PE ratio: 11.41 (comparatively low based on current market)
EPS: $3.74
Div: $1.96.
Yield: 4.42%
Payout ratio: 52.14%

GIS is a no-brainer for me. Plus, I really like some of their brands, such as Betty Crocker (Suddenly Salad) and Green Giant. Boxtops for Education is a cool program. Keep it quiet, but I actually save and sell those boxtops every year on eBay. For the very long term, look more at the company itself than simply share prices.

PG actually scares me a little because although it is a 30 Dow Industrials member, current payout ratio is 73% or $3.75 - $2.87. I'm easing more into that issue via DRiP.

Finally, look at taxes. For an IRA/401K, big dividend yielding stocks are great holdings because of tax implications -- or none, in other words. For ordinary accounts, beware.

Well done, Austin, I also compare the current year’s projected growth rate with the PE, same for the following year with the forward PE. Another thing I check when applicable is the most recent quarter’s gross margin vs the previous year’s quarter, higher is best unless there’s a good reason mentioned. Also, be skittish if the long term debt ratio vs total capital for your company is high, big cash drain with rates rising.

 

[AustinTXCat]

Well done, Austin, I also compare the current year’s projected growth rate with the PE, same for the following year with the forward PE. Another thing I check when applicable is the most recent quarter’s gross margin vs the previous year’s quarter, higher is best unless there’s a good reason mentioned. Also, be skittish if the long term debt ratio vs total capital for your company is high, big cash drain with rates rising.

I love your thinking. Always, always consider technicals and fundamentals.

Honestly, big reason I have not yet invested in Starbucks or other similar issues is because I can't fully wrap my head around the business. My big, longtime problem is I embrace stocks when I can fully grasp the business, itself. I know Big Food, and can relate. Other stocks are the future. I'm perhaps missing out. Call me old-school. But I love your thinking.

 

[lz]

I love your thinking. Always, always consider technicals and fundamentals.

Honestly, big reason I have not yet invested in Starbucks or other similar issues is because I can't fully wrap my head around the business. My big, longtime problem is I embrace stocks when I can fully grasp the business, itself. I know Big Food, and can relate. Other stocks are the future. I'm perhaps missing out. Call me old-school. But I love your thinking.

Had SBUX at one time, love to drink it, thought the stock was overpriced despite having a very good CEO, who’s now somewhat in the background. They mix too much PC into their business decisions for me, tough enough as it is to be successful.

 

[UK_Dallas]

Dividend Channel is your friend for high-yielding dividend stocks. For my Ameritrade IRA, I'm also into SALM and DVD. Both are "rightwing" issues, especially SALM. SALM owns Christian radio stations and rightwing websites (HotAir). I'm agnostic as f*ck. Haven't been to church in over 30 years.

Look past the noise and go with Yahoo fiance analyst recommendations. Awesome dividend.

Have you ever looked at GER? It is a Goldman energy fund. Fairly new but launched when oil was high. It has been relatively steady with a 9-11% dividend. I'd think it would be fairly safe with Goldman managing it.

 

[Willy4UK]

Bro, rotate an account over to the Fidelity Contrafund (FCNTX). I've been in it since 2006. Contribute monthly or quarterly. Great returns over the years. Rollover from my last job. In that particular account, I've got 1/3 in cash. Breakdown is as follows.

Cash (QHSIQ): 36%
FUSEX: 33%
FCNTX: 31%

Bear market gonna happen. Hold the cash and buy when down. Money market funds now paying above 1.5%. Should go higher.

Bam, bought into those two fcntx and fusex with your suggestion. Been adding about 500 a month into each. What qhsiq?

 

[AustinTXCat]

Bam, bought into those two fcntx and fusex with your suggestion. Been adding about 500 a month into each. What qhsiq?

QHSIQ is cash. Draws interest, too. I'm holding for the next market dip.

 

[AustinTXCat]

Have you ever looked at GER? It is a Goldman energy fund. Fairly new but launched when oil was high. It has been relatively steady with a 9-11% dividend. I'd think it would be fairly safe with Goldman managing it.

Have only once invested in energy, but sold soon after. I'll take a look. Thanks.

 

[Willy4UK]

QHSIQ is cash. Draws interest, too. I'm holding for the next market dip.

So what would be the pay off on 100K in 20 years with QHSIQ?

 

[AustinTXCat]

So what would be the pay off on 100K in 20 years with QHSIQ?

Not very good. $34,000. Here's how the formula breaks down:

Assuming simple interest is 1.5% and remains so on $100,000 over 20 years.

1.015 x^y 20 = 134,685.

Since I'm only 3 years away from eligibility to make withdrawals on the account, personally speaking, maintaining the money in QHSIQ is a defensive move. You still have lots of time. Stay fully invested, continue contributing monthly or quarterly, and ride out the bumps.

 

[jameslee32]

Bam, bought into those two fcntx and fusex with your suggestion. Been adding about 500 a month into each. What qhsiq?

I own positions in both in my Fidelity account. Contrafund is not dirt cheap to own but has outperformed its peers several times and is beating the S&P 500 Index over the past year. If FCNTX is the fund you want, FUSEX is the index fund you need or one like it. I also own the SPY and VFIAX. Most of my retirement money and some discretionary money is gathered here.

This is also exactly how I suggest anyone starting out to invest until exceeding about $5k and before picking individual S&P 500 names. After about $10k, nothing wrong with speculating in smaller companies in smaller amounts. Never on margin!! Never buy or sell all at once!!

 

[Willy4UK]

Not very good. $34,000. Here's how the formula breaks down:

Assuming simple interest is 1.5% and remains so on $100,000 over 20 years.

1.015 x^y 20 = 134,685.

Since I'm only 3 years away from eligibility to make withdrawals on the account, personally speaking, maintaining the money in QHSIQ is a defensive move. You still have lots of time. Stay fully invested, continue contributing monthly or quarterly, and ride out the bumps.

Gotcha

 

[Willy4UK]

I own positions in both in my Fidelity account. Contrafund is not dirt cheap to own but has outperformed its peers several times and is beating the S&P 500 Index over the past year. If FCNTX is the fund you want, FUSEX is the index fund you need or one like it. I also own the SPY and VFIAX. Most of my retirement money and some discretionary money is gathered here.

This is also exactly how I suggest anyone starting out to invest until exceeding about $5k and before picking individual S&P 500 names. After about $10k, nothing wrong with speculating in smaller companies in smaller amounts. Never on margin!! Never buy or sell all at once!!

Thanks for the post

 

[Larry Skaggs]

Buy forever stamps. they are 50 cents now and are expected to go up by 10 to 15% every year. Technical analysis is also very bullish

 

[AustinTXCat]

Buy forever stamps. they are 50 cents now and are expected to go up by 10 to 15% every year. Technical analysis is also very bullish

Larry, come to think of it, Forever Stamps from USPS may actually represent a decent investment. I'll definitely give some thought. Thanks.

 

[jameslee32]

Dividend Channel is your friend for high-yielding dividend stocks. For my Ameritrade IRA, I'm also into SALM and DVD. Both are "rightwing" issues, especially SALM. SALM owns Christian radio stations and rightwing websites (HotAir). I'm agnostic as f*ck. Haven't been to church in over 30 years.

Look past the noise and go with Yahoo fiance analyst recommendations. Awesome dividend.

DIS is my media play but I never invest based on politics. I would own Chick-fil-A no problem if it was publicly traded. Rarely ever gamble also outside of maybe $4 a week in the lottery. My wife gets crazy enough at church festivals.

But like many, I've been thinking sports gambling ever since the SC decision. For gambling growth something like CHDN or for e-sports gambling, TTWO could benefit and have interested me. These are things I'm considering. No yields to speak of but the possibilities to grow could be endless and I have several dividend plays already.

 

[jameslee32]

MGM is another gambling stock to consider. LVS and WYNN have been more profitable I think but get a lot of their revenues from China. MGM is much cheaper to buy also at a PE ratio of 9.37 for speculating in sports gambling. So it's a much better value play and a pure casino play vs CHDN and TTWO but doesn't appear to be growing as fast.

 

[cardkilla]

I have pretty much liquidated all my stocks over the past 2 years. Rental properties and other tangible assets is all I'm focused on now. I just don't trust the markets anymore. I bought a duplex for about $370 last year in the Highlands, put maybe $20k into some renovations, and turned the smaller apartment into strictly AirBNB. Averaged $3500/month in rental income. Compared to last owner making $1900/month. After taxes and expenses, I'm netting roughly $2800 or so per month, which pays mortgage plus about 1k left over.

And I love it. Almost done closing on a 4plex in Old Louisville that I project will net me close to the same after paying mortgage and expenses, maybe a little more. 1/2 AirBNB, 1/2 long term rentals.

Goal is to be able to completely retire in 10 years and just manage my properties (goal is to have 10 buildings that are returning 1k or more per month in income AFTER expenses and mortgage payments.

Done worrying about ups and downs of the market. Only time I may buy in again in a significant amount is if there's another crisis that drops stocks 30-40%.

 

[cardkilla]

Property not for everyone though. I'm able to keep expenses low because I can do quite a bit of the work myself but others may not be able to. I've been fortunate with the deals I've found so far but it's getting harder and harder to find properties that make sense!

 

[AustinTXCat]

DIS is my media play but I never invest based on politics. I would own Chick-fil-A no problem if it was publicly traded. Rarely ever gamble also outside of maybe $4 a week in the lottery. My wife gets crazy enough at church festivals.

But like many, I've been thinking sports gambling ever since the SC decision. For gambling growth something like CHDN or for e-sports gambling, TTWO could benefit and have interested me. These are things I'm considering. No yields to speak of but the possibilities to grow could be endless and I have several dividend plays already.

Honestly, I looked past the Christian media and HotAir stuff. I haven't read HotAir in years. SALM is classified as a "penny stock" by some ratings, but offers decent earnings. I believe they could promote their business better via social media. Just checked Yahoo and 1-year price target was raised from $7 to $7.75. Gonna hold and wait. I bought in at $3.40. Currently trading at $3.85.

 

[jameslee32]

Honestly, I looked past the Christian media and HotAir stuff. I haven't read HotAir in years. SALM is classified as a "penny stock" by some ratings, but offers decent earnings. I believe they could promote their business better via social media. Just checked Yahoo and 1-year price target was raised from $7 to $7.75. Gonna hold and wait. I bought in at $3.40. Currently trading at $3.85.

Yup, how good is the business, how cheap is the stock trading and how can I profit? That's how it works for me.

For example, I haven't smoked cigarettes since sophomore year of HS but I still have a small position in PM. Great yield, had it for 10 years but this is a declining business. Sold some much higher.

Hell, I have some of the most fuel efficient vehicles on my street but still own oil and refining stocks.

 

[LineSkiCat14]

Had SBUX at one time, love to drink it, thought the stock was overpriced despite having a very good CEO, who’s now somewhat in the background. They mix too much PC into their business decisions for me, tough enough as it is to be successful.

Lot to catch up here, and TBH, some posts lost me a bit.

Something that's intriguing about Starbucks is that it's an experience. The coffee part is more or less throw-away, especially with more and more people looking to save money and eat/drink in. There are some fantastic ways to make great coffee at home from the easy systems like Keurigs all the way to elaboritae cold-brew systems that look like a science fair project.

But Starbucks still brings people in. Many times I go there to read or work simply because it's being out of the house, with less distractions, but there's still people around. And it's always packed. We're talking at least 15-20 people in mine, and many always have a drink or food.

As Ecommerce swallows up retailers, the ones that can become an experience will survive, and survive well. I like Starbucks for the future.

 

[LineSkiCat14]

Has anyone looked into front-loading their Roth IRA contributions? I can finally max this fully for $5,500 after a recent raise.. but I do it over ~450ish/month. I've read that if you can suck it up, dump the 2018 year's load in now and save up the for the January 2019 load over the next 6-7 months... you can see some serious returns down the road.

I'm young enough that this would help (31), but it would be a pretty decent pinch to put that money in now. I'm already 10% 401, and 6% on savings. I'm not making too much yet in my early career, so I'm starting to feel the strain.. recently had to order Rolling Rock cause it was on sale for HH.

So not sure if it's REALLY worth it. And also not sure how I feel about putting THAT much money into stocks.

 

[BlueThruAndThru]

For those of you wanting divdends, look into REITs. Real estate investment trusts. They must pay out 90% of taxable income in dividends. Usually don't grow much but it's an income play.

As far as 401k, don't know if this was mentioned but you should max out if they match AND have a good selection of funds. Free money ATKOT. Vanguard s&p 500 fund with .03% fee might be good.

Roth next for most people then taxable account where you might want to stay away from dividends because of taxes.

Sorry if these have been mentioned. Love this stuff.

 

[BlueThruAndThru]

Has anyone looked into front-loading their Roth IRA contributions? I can finally max this fully for $5,500 after a recent raise.. but I do it over ~450ish/month. I've read that if you can suck it up, dump the 2018 year's load in now and save up the for the January 2019 load over the next 6-7 months... you can see some serious returns down the road.

I'm young enough that this would help (31), but it would be a pretty decent pinch to put that money in now. I'm already 10% 401, and 6% on savings. I'm not making too much yet in my early career, so I'm starting to feel the strain.. recently had to order Rolling Rock cause it was on sale for HH.

So not sure if it's REALLY worth it. And also not sure how I feel about putting THAT much money into stocks.

Yep. I would maybe buy in thirds over first few months of year. You'll see bigger returns the sooner you get it in.

Buy solid companies and hold and you will be rewarded.

 

[BlueThruAndThru]

Sbux is on sale and really ramping up in China. I bought way too high but will just let it ride and see what happens.

Should beat market from this price. Closing 8000 stores for retraining isn't great though.

 

[kywildcatsfannumber1]

If Starbucks dips like I expect over the incident of the 2 men getting arrested resulting in retraining, could be a good time to buy them low as they'll get back on track. That incident will eventually blow over. Too many yuppies gotta get their coffee...