The Long Investor
Airline Captain & Investment Analyst, Technical/Fundamental Analysis
Procter & Gamble's steadily rising dividend shows why boring pays through downturns. It raised its dividend for the 70th straight year in April; the annual payment rose 5.7 times from $0.76 per share in 2001 to $4.36 today, about 7.2% a year through the dot-com crash, 2008, Covid and 2022. It returned $3.9 billion to shareholders in one quarter, while semiconductors are 27% below their high. x.comÂ
Procter & Gamble is attractive at about 21.5x earnings. It is not a bargain, but it offers a modest margin of safety with growth picking up in 2027 and 2028, supporting a projected 12-month return of 20%. x.comÂ
Blue-chip dividend stocks seem to benefit from capital rotating out of weakening large-cap tech. They strengthen when QQQ weakens, or at least temporarily absorb some of that outflow; tech weakness and blue-chip or value gains have shown a one-for-one same-day relationship right now. x.com x.comÂ
Procter & Gamble is highly likely to keep lagging the S&P 500 over the next 10 to 20 years, as it has this century. Store brands like Costco's Kirkland and Amazon's are no longer seen as inferior, which has changed its story, and few of its brands are must-haves besides Gillette. Elevated petroleum-based input costs for plastics and energy cast doubt on its safety-stock status. At $139, EV/EBIT is about 16 and forward P/E just under 20, so it suits only those wanting a bond proxy. x.comÂ
PepsiCo is extreme value because its falling share price has lifted the dividend yield to 4.6% at just 15 times this year's earnings. Its dividend has risen for more than five decades. x.comÂ
Durable dividend stocks such as Johnson & Johnson, Coca-Cola, Realty Income, PepsiCo, Procter & Gamble, Sherwin-Williams, Visa and Federal Realty can become a lifetime income machine. The key is owning businesses so durable that investors sleep well while dividends and compounding do the work, rather than chasing yield. x.comÂ
Broadcom, Visa, Mastercard, Microsoft, JPMorgan, Costco, Apple, Home Depot, Lowe's, American Express and the DGRO, VIG and SCHD ETFs suit a dividend growth strategy, the best way to live off dividends. Payouts growing 5-8% a year can outpace inflation, and living on dividends means never selling in a crash. Steady dividend raises filter for stable cash flows, quality and solid management, dividends are easier to forecast than prices, and reinvesting them before retirement compounds share count. … Show more
Dividend growth stocks have quietly outperformed the S&P 500 for decades, making Broadcom, Visa, S&P Global, Costco, Mastercard, Texas Instruments, Microsoft, PepsiCo, Starbucks and NVIDIA ten to buy and hold forever. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
Whirlpool is a high-yield stock to avoid, alongside Walgreens Boots Alliance, because its payout ratio showed the dividend risk in advance. Management described recession-level demand, cash flow turned negative, the payout ratio hit 120% and the dividend was cut. Walgreens was worse, cutting its dividend 48% in early 2024 to 25 cents a share after a 47-year record. x.comÂ
Quality dividend stocks look like a great place to be over the next few years as the crowded tech trade unwinds. Per @PeterBerezinBCA, in the early dotcom bust tech crashed while the rest of the market rose, so the hedge for stocks was other stocks. A quality dividend basket holds old-economy, cash-generative businesses at sane multiples, while the index hides 50% of its weight in names at 10 times sales. That outweighs a general dislike of dividends as inefficient, taxable compounding. x.com … Show more
Analog and power semiconductor stocks such as ON Semiconductor, Texas Instruments and NXP are pricing far ahead of their fundamentals. Even with price hikes they are not back to 2022 revenue, yet their share prices have risen multifold. The semiconductor supercycle is lifting even these laggards. x.com x.comÂ
