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re: what are the 10 best stocks to buy that pay a dividend
Posted on 8/5/16 at 10:51 pm to GenesChin
Posted on 8/5/16 at 10:51 pm to GenesChin
quote:
His argument is that companies that have big dividend payouts have huge issues going forward if they miss profit. Either they do something stupid to maintain dividend or cut it
A company like Starbucks for example has a low payout ratio but consistent. That means that the risk of it being cut is very low and their future dividend growth will make it more valuable
Correct but more than that the low payout ratio is because they're still opening stores left and right, 10 a week in china alone this year, thats remarkable growth, and why you're getting an ever growing dividend and share price. One day soon, who knows maybe a decade from now or less, starbucks wont be able to open 1800+ stores a year and at that point they will probably boost the dividend from 40% of earnings to 80% of earnings just like Mcdonalds,Coke, and all the other large cap dividend monsters that have nowhere to invest money except buybacks and dividend boosts. At that point who knows SBUX EPS is probably way higher than it is today unless of course consumer trends of sipping coffee and tea just disappear, which isnt really something I lose sleep over. Anyways if EPS doubles from here and dividend payout ratio hits 85% like the big companies, you're talking a dividend quadruple what it is today which is 1.4% so about 6% yield if starbucks just stays on course and then boosts its yield as it matures......
your buy of a 1.4% yield today will pay you 6% more than likely before your buy of Coca Cola today at 3.25% will pay you 6% if I had to guess. Thats all im trying to get dividend investors to understand that current yield is only important if you're living off dividends today, if you're looking to the future, find a little mix of growth + dividend and I think alot of people ignore nike,starbucks,visa because of the low dividends today but if you really extrapolate the growth they are seeing you will see bright bright futures as dividend stocks you have wet dreams about owning
1
Posted on 8/6/16 at 11:01 am to dabigfella
Big Fella, do you have an opinion on Kroger? I see a lot of room for growth there but my concerns are low margins and competition from WFM, WMT, etc. Very low payout ratio, crazy fast dividend growth the past 7 years. I'm on the fence though for the above stated reasons.
Posted on 8/6/16 at 11:16 am to Grits N Shrimp
Honestly man I don't know Kroger that well, I admit I'm not a user, i use central market here in Houston and I think it's the greatest grocery store on earth it's a shame that it's the only one of its kind in this town. I believe heb owns it. As long as you feel there's growth and the dividend fits into current and future earnings then it sounds like a buy. I don't know man I'm not one for diversification I have less than 10 holdings.Google,Amazon,Apple,Facebook,Nike,Starbucks,visa,Phillip morris,tesla. That's it that's my entire holdings, I know everyone wants to spread their money all over but for me those are 9 companies I believe in, and I don't have time constantly be researching these companies left and right. Those are enough for me with what I'm looking to do in the market.
This post was edited on 8/6/16 at 11:27 am
Posted on 8/6/16 at 3:20 pm to dabigfella
Im 34 years old and Sbux, T, VZ, xom and cvx are my biggest positions not named Cisco and apple.
Posted on 8/6/16 at 4:06 pm to 632627
Am I right in assuming you're adding more aggressively to AAPL and SBUX than the others?
Posted on 8/6/16 at 4:14 pm to Grits N Shrimp
Really Google is the one that everyone should be balls deep in even though there is no dividend.Like I said sell calls if you must, but obviously to do so you need 100 shares which is $81,000 give or take. Forget that they own the 2 biggest websites on earth in google and youtube, forget their android has 85% market share in the smart phone market, and just look at their VC arm which to this point hasn't even made that many investments but the ones it has OMG. They bought 7% of uber at $3B valuation, its $60B now. They own a nice stake in Jet.com which walmart just bought the other day, and slack which is another big investment they made, theyre up many times over on that and its still young. Google isn't paying a dividend much like berkshire hathaway hasn't. They're so diversified today its staggering and when you realize that half the planet doesnt even have internet the sky is really the limit. GOOGL is my #2 today but they're basically the brain of the entire planet, and believe it or not on a forward earnings basis are cheaper than some junk like Kellogg cereal its pretty incredible but i think its bc retail tries to stay away from $800/share names
Posted on 8/6/16 at 4:23 pm to dabigfella
Google is a great candidate to add to a dollar cost vehicle like Loyal3 imo
Posted on 8/6/16 at 4:54 pm to tigers1956
To answer the original question though, i like the following for long term holds, not necessarily at current valuations though:
CAH
AFL
ADM
BG
SBUX
COST
WBA
MMM
ROST
TJX
GWW
CB
CHD
MDT
KR
CAH
AFL
ADM
BG
SBUX
COST
WBA
MMM
ROST
TJX
GWW
CB
CHD
MDT
KR
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