Hello all, I am looking for new dividend ideas for my non-IRA account. So that means, non REITS and preferably qualified dividends. Doesn’t have to be the highest dividend payer out there as I would like to have at least some growth in the plans as well but would like to see at least a 3.5% rate at present.
I am totally good with mutual conversion but I have plenty of TFSL.
Any favorites out there? Jim, I would love your input but at least hope you don’t mind me using your board as a forum to discuss!
PSA-N, coupon is 3.875%, current market price $18.85, 5.2% yield, of course yield to first call will be much higher. However, I am not expecting this to be redeemed any time soon (if at all ever). So if you are buying this, then you are buying just yield and locking this yield.
Are you focused on common stocks or do preferreds also work?
I’ve mentioned the PEB preferreds on here, currently trading at a discount to par, now about $21.50 per share. I figure a 12.5% annualized return over a 3-year period if these return to par. These won’t get you the qualified rate, however.
You might also check out the ATCO preferreds, which will get you the qualified rate, however.
I am good with Preferred options but am also looking for stock to hopefully participate in long term capital appreciation.
But I appreciate the two preferreds you suggested as well.
I’m in somewhat similar circumstances, looking for some dividend payers with also potential for growth. I too have plenty of TFSL.
I picked up some Canadian bank stock more than a year ago after listening to Jim Gilles, who leads TMF in Canada. All still pay north of 4% and Canada has a tax treaty with the US that is helpful. But this train may have left the station (although not according to Gilles) as they’re all up 40% to 50% since I bought them. I’m hanging on for the dividend and because I still think they have room to run and because I don’t have other good targets. BMO, NTIOF, BBS. On a recent Morning Show, Gilles expressed his opinions as to why they may provide better protection against housing bubble collapse and mortgage issues.
Also like WSO, which Bill Mann has touted. Sell HVAC materials, boring but pays around 3.5%, up about 28% from where I purchased in fall of 2020. Just a steady producer.
Polaris Infrastructure, now Polaris Renewable Energy RAMPF, is another Canadian company which provides energy infrastructure in South and Central America. Can’t remember if a Gilles or Mann idea. Riskier buy pays a dividend in the 3.6% range. On the edge of my comfort zone.
Been considering SBUX as it’s dividend is now around 2.5% but obviously will improve if share price deteriorates more. Wonder how the return of Shultz versus inflationary pressures will play out over the next several years.
With the exception of RAMPF, I have not paid careful attention to the other companies mentioned. I have tried to leave them in the set and mostly forget part of our portfolio.
I know these ideas are far afield from the usual Jim Royal board posts. Still love Jim’s ideas and always looking for another great mutual conversion suggestion.
VZ 5.75, T 4.5% dividend yield, both stock went down in the last week due to guidance. They have capital cycle, heavy debt, etc but reliable dividend payers. I am doing covered call on this name, I exited T multiple times successfully with 20%, 25% gains (including dividends). VZ not so lucky. Every time I try to get break-even the stock goes further down.
I think I am ready to give up investing for dividend.
Thanks David, I will have to look into these and at some point I will post on the few “boring” stocks I own.
Hey Jim, looked a little bit into the ATCO stock itself. I understand there would be more risk in terms of default ther but a decent dividend in itself. Any thoughts on the company or are you just looking at the preferred there, confident they won’t have that many problems.
Hi Kingran, yes I was in Vz for a while but like you I became disenchanted with the company after following for a few quarters and reading the quarterly reports. I think T-Mobile is beating them (and ATT) in a very capital intensive industry that doesn’t seem to be slowing down in terms of spend rate.
So I got out.
I think T’s capex is going to get steady state in couple of quarters and that should allow them to either reduce debt or buyback, or they could do both.
Hey Randy, I was really pointing to the preferreds, but the common yields a pretty decent chunk these days, too, and you’ll have some potential upside there that you won’t with the preferred at these prices. However, it’s been the same payout on the common for years, and it’s understood that it won’t go higher, at least in the near term (though my knowledge is a bit old on this latter point). I like the fact that David Sokol is involved as chairman, and he’s had a good reputation as an operator for years (the kerfuffle with BRK, notwithstanding).
Hey Randy and David!
Take a look at BLX, a bank, which yields 7.3% at today’s closing price and is 50% below its tangible book value.
Then, HBI, under garments, which yields 5.8%, and Morningstar pegs fair value at $26, and HBI is a recommendation of Morningstar’s Dividend Investor service as a “buy”.
Also, NYCB, a New York regional bank, that yields 7.2%, and is awaiting regulatory approval of its acquisitions of Flagstar Bancorp, which will be transformative:
I own all three plus TFSL.
The Other David
Thanks David, I will look!
Randy and David-
Two more dividend payers and stalwarts to consider are PRU and UNM, both of which I have owned since mid-2020.
PRU sports a dividend yield, at today’s closing price, of 4.9% and management fully intends to continue growing the dividend. It’s priced below its tangible book value of $107 and sports a forward P/E of 9 so it’s still a good value but not dirt cheap.
UNM’s dividend yield at today’s closing price is 4% and just started increasing its dividend again. It’s priced well below its tangible book value of $55 and its forward P/E is 6 so it might be considered dirt cheap.
Food for thought.
Thanks to everyone for the multiple ideas here. Lots of food for thought.
Since it is important to give as well as get, here are a few of my 4+% dividend stocks. To be consistent with my request I will not include any of my REITs or the ones previously mentioned:
In the oil and pipeline group, I have DVN and KMI.
In the banking sector I have HBAN and NTB. (Besides TFSL)
In the consumer products I have NWL
And on the smaller scale I have a Canadian company, SUUIF. Kind of a small Air Products in a consolidating industry. I found them through ownership in BAM who took a loan and equity position in them which got me interested.
In terms of preferreds I have PGF which is a ETF of bank preferreds. I just feel like the banking industry is much safer than it used to be because of the financial crisis response and due to rising rates.
Finally along the same lines I have some VTIP to help protect against inflation rates staying high or growing.
KMI is something I used to do covered call, until I realized it has some structural issues. I sold. There are many who like MLP’s, but that one is not for me.
I agree, but KMI is no longer an MLP and is also no longer in big growth mode so they aren’t in a debt increase mode. Just paying a dividend, internally gwnerated cash flow and debt reduction.
I own KMI also. Dividend seems solid these days after the 2016 surprise dividend reduction. But, yes, it is basically in slow growth mode with an emphasis on debt reduction.
Thanks for your dividend investments, Randy.
My contribution for your consideration is AFG - American Financial Group. These guys are really asset allocators focused on insurance. At one time their portfolio included life, annuities and all sorts of personal and specialty lines Property-Casualty insurance. Now they are mainly specialty P&C. They recently built an impressive block in long haul trucking, for example.
The posted yield doesn’t look imppressive at 1.7%, but digging deeper, you see that they have an impressive record of special dividends. A typical year includes speciual dividends at least as great as the regular dividend, so the yield is really more like 3.5%. The last couple years have been amazing as they exited the annuity business. $26 in special dividends per share in 2021 and $10 so far in 2022. I expect another $2 at least this year.
If you were lucky enough to buy in the COVID trough at around $80 per share, you would have enjoyed $2 annually in regular dividends, $36 in special dividends and price appreciation to around $130. Not bad. I doubt that the future is that bright, but these are a savvy crowd.
I’d be interested in others’ thoughts.
Well, ATCO – which I mentioned a couple days ago – just got a buyout offer from management and insiders. I guess they too think it’s undervalued. Of course, the stock spiked, but still not where it was a year or so ago, above $16. Obviously, if they’re buying at $14.45, they think it’s worth substantially more than that. And you can be sure that Sokol thinks it’s a good deal.
The preferreds will remain publicly traded, but they plummeted on the news, surprisingly. ATCO-H – again mentioned a few days ago – fell the most of the lot, and now trades at a yield of 8.5%. A return to par in two years gets you a 12.5% annualized return, with 2/3 of that paid in cash. 3 years is 11.2%. So forward returns on these just got a lot more interesting.