Stepping Into the Quiet Period
Posted on May 29, 2015 | Dividend Investing
This week, Deere & Company (DE) declared a quarterly dividend that was the same as the prior quarter’s payout. In 2014, Deere increased its dividend in May; in 2012 and 2013, the company bumped its payout in February. Whether February or May, the company has failed to increase its payment when expected for 2015. It’s worth noting that Deere will in fact pay a higher annual dividend to its shareholders in 2015 compared to 2014, even if it does not increase its quarterly payment in calendar-year 2015.
Important Dividend Dates You Should Know
Posted on May 22, 2015 | Dividend Investing
There are four dates that are important for dividend investors. The first is the declaration date. The declaration date is the date that the board of directors announces a dividend. The statement typically includes the size of the dividend, the date of record and the payment date (described below). Once the dividend has been declared, the company has a legal responsibility to pay it.
Favorable Earnings Reported by 77% of DI Companies Thus Far
Posted on May 15, 2015 | Dividend Investing
As we arrive at mid-May (although the temperature feels far from that here in Chicago), so far 91% of companies in the S&P 500 index have reported quarterly earnings. According to Thomson Reuters, the blended (reported and estimated) first-quarter 2015 quarterly earnings growth for S&P 500 constituents is 2.1%. On a sector basis, health care is at the top, reporting first-quarter earnings growth of 18.1%. Energy, without surprise, displayed the weakest growth (or lack of growth), reporting first-quarter earnings that fell 57.8%.
Two Dividend Increases, Plus the Monthly Report
Posted on May 8, 2015 | Dividend Investing
This week markets reacted to comments from Federal Reserve Chair Janet Yellen that equity valuations are “quite high.” On top of Yellen’s comments, an upbeat U.S. service-industry release and a rally in crude oil prices sent the 10-year U.S. Treasury yield soaring to its highest level in two months, while Treasury bond prices dropped for a seventh consecutive session (bond prices fall as their yields rise). By Friday, most U.S. indexes had recovered their losses from earlier in the week, riding on the back of a better-than-expected jobs report.
Don’t Sell in May and Don’t Go Away
Posted on May 1, 2015 | Dividend Investing
This week was full of economic reports and earnings releases. Now we wait to see if investors will follow the adage “sell in May and go away.” U.S. investors typically sell their stocks in May and stay away from the market until the end of October. S&P Capital IQ’s U.S. equity strategist, Sam Stovall, blames the seasonal weakness during the May-October period on reduced capital inflows, vacations, earnings reality and mutual funds’ fiscal-year-end window-dressing.
Eleven DI Companies Report Quarterly Earnings
Posted on April 24, 2015 | Dividend Investing
The NASDAQ Composite index surpassed its all-time closing high for the first time in 15 years on Thursday, posting a close above the 5,048.62 reached at the height of the dot-com bubble on March 10, 2000.
Unlocking Shareholder Value With Divestitures
Posted on April 17, 2015 | Dividend Investing
There are many reasons that a company may consider a merger or acquisition (M&A). Some make economic sense, and others do not. Anticipated synergies (making the combined company worth more than the two companies operating separately) are the source of many M&A motivations. Usually synergy results from either reducing costs or increasing revenues. Other firms may seek increased growth or market share, access to unique capabilities, tax benefits or diversification.
Mergers and Acquisitions Hit Record High
Posted on April 10, 2015 | Dividend Investing
We have commented on the fact that companies have shown an increase in cash balances over the last year. In fact, cash and short-term investments in the S&P 500 (ex-financials) settled at a record high at the end of 2014. The majority of companies are using this additional cash to increase share buybacks and dividend payments, which have also hit record levels. So far this year what we are seeing is an increase in mergers and acquisitions (M&A).
Marching Out of First Quarter, Plus the Monthly Report
Posted on April 2, 2015 | Dividend Investing
After announcing portfolio changes during each of the previous three months, we have none to announce for April. There were simply few companies passing our minimum criteria for consideration, and none that were attractive enough to warrant a portfolio change. Plus given our goal of limiting transactions to one or none per month, we didn’t want to make a change simply for the sake of change. We’d rather stay selective and have low turnover than the other way around.
A Bright Spot This Week: Record Dividends
Posted on March 27, 2015 | Dividend Investing
Markets took a turn for the worse this week (narrowly escaping a five-day decline), but how much of it is due to news versus noise? We are currently heading into a quiet time period: The end of the quarter is near, and the next Fed meeting won’t be held until late April. In time periods such as these, we see that even fairly insignificant news items can move the market. On top of skittish investors, this week marked one of the lowest-liquidity weeks of the year.