Dividend Machine

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How to create a portfolio for retirement that is Safe ,provides income and creates a dividend machine

  Comments: 98

Why is it so important to develop your own dividend machine? This multiple part article should help you come to the realization that few investors do until it is too late: The importance of building your own dividend machine

A 25 year old whose portfolio is only thirty thousand dollars, can buy a stock like Altria today with a dividend of about 8.5% .You will find out in the next installment why Altria is ideal for starting your own personal dividend machine.The twenty seven hundred dollars of annual dividends should double about every 9 years at least. With no further investment this particular dividend machine should return over eighty six thousand dollars annually at age seventy. Sound impressive? By reinvesting dividends the first fifteen years this amount should be well over two hundred thousand dollars annually at age seventy.How many of your friends do you think will have done that? Not bad for a one time investment.See the importance of a dividend machine now?

What happens if you don't have the thirty thousand dollars to get started ?Borrowing the money from a loved one or relative is a great alternative.Many parents grandparents and loved ones loan money to a child for an automobile or school which may or may not have a future tangible value. Giving your loved one their "inheritence" early may create a permanent dividend machine that can be transferred for many generations to come

Wharton School of Business professor Jeremy Siegel said that about 97% of the gain of the Dow since 1900 has been from reinvested dividends . Only 3% wwas caused by capital gains. Yet Mmany"gamblers" ,disguised as value investors ,have lost hundreds of thousands of dollars, investing in financials like AIG ,Bear Stearns and others. Their mistake is concentrating ONLY on capital gains and not dividends. In the next installment a step by step blueprint will help you to explain how to build your own personal dividend machine


After each article there will be some business links that I would like feedback with

http://billytixx.surveysc.hop.clickbank.net/" target="_top">Click Here!

http://billytixx.expresspay.hop.clickbank.net/" target="_top">Click Here!

http://billytixx.gamertest.hop.clickbank.net/" target="_top">Click Here!

http://billytixx.surveys2.hop.clickbank.net/" target="_top">Click Here!

Comments

 

smiley guy, November 14, 2009


stock is up over 35 % from where it was suggested

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Smiley guy, June 01, 2009


This stock is up over 16% from where it was suggested here. Add that to the more than eight percent dividend.Thank you billy

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Smiley guy, April 21, 2009


Stockdoc your deductive reasoning skills are almost as bad as your stock picks I'm afraid.You really give us dentists a bad name. Let me repeat this for you. Java never got up to a one or two profit last week.Today on the open you got a huge gain. Get over your man crush obsession with Billy. He is straight and you constantly title your posts as Billy's gay lover. Please do not continue to express your undeniable latent homosexual tendiencies on this forum.

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Billy's Gay Lover, April 20, 2009


But then he sold with just 1 - 2% profit and he didn't get the takeover move then, azzhole.

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smiley guy, April 20, 2009


Stockdoc are you pretending to be stupid ? Billy clearly says to hold the stock until you get a 1-2% profit.

billytickets
Be patient so far of my last 21 of 23 have been profitable. Give Java another 10 days .

Be thankful Im not this loser named Paul Price





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Billy's Mom, April 20, 2009


But you would have sold after your 1% - 2% loss like you always recommend.

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smiley guy, April 20, 2009


Oracle Corp. pounced on Sun Microsystems Inc. in a $7.4 billion deal Monday after rival IBM Corp. abandoned its bid to buy Sun, a server and software maker that had a 27-year run as Silicon Valley's brash independent Redwood Shores, Calif.-based Oracle said it will pay $9.50 in cash for each Sun share. The price represents a 42 percent premium to Sun's closing stock price of $6.69 on Friday, and is nearly twice what Sun was trading for in March, before word leaked that IBM and Sun were in buyout negotiations. Net of Sun's cash and debt, the transaction is valued at $5.6 billion, Oracle said.

Hopefully the stockdoc will apologize for the asinine the comment above


I went long on JAVA on the openong like you said.
It was $6.72 then and it's been lower all day since.

Eat me.

Posted: Apr 16, 2009


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Billy's Mom, April 20, 2009


Who cares what you say.

Only you read you blogs anyhow.

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Paul Price, April 20, 2009


I am not obsessed with billytickets

I am just mad at him because he has the nerve to bring up 50 or 60 of my 154 stocks I recommended over the past 2 years

So what that many are down more than 40%

I just keep recommending them until they turn profitable

Check this out Managing for Yield
March 19,2008

AllianceBernstein Holding L.P. [NYSE:AB] 2:40 PM price: $59.53 /share
52-week range: $53.63 [Jan. 22, 2008] - $94.94 [Apr. 23, 2007]
Yield: 7.47% [expected year ahead distribution = $4.45/unit]
--------------------------2007 actual distribution: $4.75

Alliance Capital [AC] was formed in 1987 from a subsidiary of AXA Financial.
AC merged with Sanford Bernstein in October of 2000 to form the current configuration of AllianceBernstein. Because of their reduced tax status as a master limited partnership these are UNITS rather than shares but for all practical purposes [other than taxes] they are just like shares of other companies.

AB is one of the largest institutional money mangement firms with year-end 2007 Assets Under Management [AUM] of $800.4 Billion. With the crappy market action to start this year AUM dipped to $751 Billion as of February 29, 2008.

Alliance Bernstein is not Bear Sterns. They do not hold any bad paper, they do not own a bank or make mortgage loans. They strictly run money. About 25% of their assets are in fixed income management of customer funds.

Total debt stood at $163 MM as of last September against over $1.9 Billion in treasury cash. Earnings and distributions to unit-holders fluctuate with AUM changes and market performance.

AB has shown excellent long-term results. Earnings/unit were $1.66 in 1998 and grew to $4.32 in 2007. Distributions /unit went from $1.60 to $4.75 during that 10-year span. Revenues per unit kept pace going from $5.77 to $17.25.

Value Line gives AllianceBernstein a financial strength rating of $B++ and an earnings predictability score of 75th percentile [very high for this industry].

With market conditions bad right now the AUM figure has regressed and the expected distribution for 2008 is estimated to be $4.45 versus last year's $4.75. At today's $59.53 price that provides a current yield of 7.47% - about double the best CD rates available today. Even if the Units stayed unchanged in price this could be a reasonable return within a tax-sheltered account.

I think the underlying value is much higher. AB units have had a very steady normalized P/E of around 15x. In hot markets it can go higher and in bear markets it sometimes goes lower. At present, AB's P/E is just 13.8x trailing earnings - its lowest level since the horrible bear market of 2002.

At the exact lows in 2002 AB units were 11x earnings and yielding 9.9%. Buyers back then saw their units go from $23.20 to $94.90 in under 5 years - this on top of AB's excellent annual cash payouts.

If the markets continue to deteriorate AB units may well go lower. Whenever the markets pick up these units have good upside. The 7.47% yield makes the waiting easier. Three different sources of estimates all center on around $4.52 - $4.56 in per unit earnings this year.

A fifteen multiple on even $4.50 would bring AB back to $67.50 or up 13.3% from the current price. Add in the 7%+ distibution and you have a moderate risk, fairly predictable
20% total return. If things improve in stocks this will probably end up way too low a target.

Is $67.50/unit attainable? AllianceBernstein actually traded at $82.90 in late 2006 and $94.94 in April 2007. Revvenues, earnings and book value have all gone up since those prices were touched. The yearly LOW for all of 2007 was $71.30 and the absolute low hit in 2006 was $55.40 - not too far below today's price.

A company director thought AB cheap enought to buy 5000 units in the open market on March 10, 2008 @$58.10 for a $290,500 investment.

Large Holders as of Dec. 31, 2007:
YE Price: $75.25 /unit

Royce & Associates..............3.44%
Mac-Per-Wolf Company.........2.69%
FMR [Fidelity Funds].............2.57%
Cincinnati Life Ins.................2.15%
U.S. Bancorp......................1.62%
Bank of America..................1.60%
Neuberger & Berman...........1.27%

Guru Ron Baron added to his position in 4Q 2007.
AXA Financial holds around 60% of the units and is a 1% General Partner.

AllianceBernstein units look like a good choice for TAX-SHELTERED accounts willing to take a play on an overall market recovery over time. The total return potential is excellent with over 7% expected from quarterly cash distributions plus an eventual rise in unit price to $65 - $90.

Disclosure: I bought AB units for my IRA today.

( months later he tried this Alliance Bernstein [NYSE:AB] March 27, 2009: $15.62 /unit
52-week range: $10.12 (Mar. 9, 2009) - $67.75 (Apr. 2, 2008)
Dividend: Variable, 11-year median distribution = $2.74 /year

Alliance Bernstein was formed in 1987 as a spin-off from AXA Financial. They provide institutional investment management as well as serving individuals through broker-dealers. The company is structured as a Master Limited Partnership which means they pay a very low tax rate (4.6% - 9.6% over the past nine years).

They are required to pass through a high percentage of their earnings each year directly to their unit holders who later receive K-1 forms to report their share of the firm’s earnings on their personal tax returns. Over the eleven years from 1998 through 2008 total cumulative per unit distributions totaled $30.13 or $2.74 per year on average. From 2005 through 2008 (when the market was strong) the average payout was $3.64/unit/year.

Eventually a stopped clock is right twice a day.lol

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Censor Watcher, April 20, 2009


This is the message you get from someone who is scared of what people would say if allowed to speak freely.


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