When Cisco Systems Inc. (Nasdaq: CSCO) last week announced that it would institute the first dividend in company history, it raised hopes among investors that hi-tech companies would finally begin to loosen the strings on their hefty cash holdings.
But will other tech giants really follow suit and institute dividends of their own?
Cisco Chief Executive Officer John Chambers announced the payout last Tuesday, saying the networking giant would reward shareholders with a dividend likely to yield between 1% and 2%. The exact amount will be determined in the coming months while the company considers developments on the tax front and broader market conditions.
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Buy, Sell or Hold: Exelon Corp. (NYSE: EXC) Can Energize Your Portfolio with a High-Powered Dividend
With the yield on U.S. Treasury bonds sitting well below 3%, income investors have to get creative. Those seeking dividend-based cash flow must to be willing to look in less traditional places to find a safe yield. And what could be less traditional than nuclear power?
After the Three Mile Island disaster of 1979, nuclear energy became the forgotten carbon-free source of electricity. However, a small renaissance in nuclear power is happening as we speak, and Exelon Corp. (NYSE: EXC) gives us a great tool to capture the upside from this renaissance - with some solid income, to boot.
Exelon is the largest operator of nuclear power plants in the United States, with 10 plants operating a total of 17 individual reactors. It's the third-largest operator of nuclear plants in the world, and it has a massive barrier to entry around its niche market.
After the Three Mile Island disaster of 1979, nuclear energy became the forgotten carbon-free source of electricity. However, a small renaissance in nuclear power is happening as we speak, and Exelon Corp. (NYSE: EXC) gives us a great tool to capture the upside from this renaissance - with some solid income, to boot.
Exelon is the largest operator of nuclear power plants in the United States, with 10 plants operating a total of 17 individual reactors. It's the third-largest operator of nuclear plants in the world, and it has a massive barrier to entry around its niche market.
Buy, Sell or Hold: AT&T Inc. (NYSE: T) Offers a Stable Dividend With Room to Grow
Last week we recommended BCE Inc. (NYSE: BCE) as a way to stabilize your portfolio amid market volatility. We chose a superb company that's a leader in Canada's telecommunications field and has a consistent history of generating ample cashflow. This cashflow allows the company to keep increasing its safe, high dividends and to repurchase shares.
Now, don't get me wrong - I'm not pushing you into a defensive investment cocoon. I still love the opportunity to make huge profits from the advent of new technologies that are revolutionizing both computing and communications in a way not thought possible only a few years ago. Assuming you have measured your risk appetite and incorporated many high-potential return opportunities in your portfolio, adding low-Beta, dividend-rich winners such as last week's and today's (Monday) will improve your portfolio diversification, reduce volatility and add some serious income.
Today's stable dividend winner is in the skyrocketing world of mobile computing. Powerful smartphones are giving us brand new capabilities, which greatly improve productivity. And the growing variety and availability of cloud computing services are already impressive. From mobile e-mail to mobile web-browsing and even mobile video and geo-location-based services, there's a myriad of applications now available to consumers. These services are only possible thanks to large technological improvements and investments in wireless networks.
Now, don't get me wrong - I'm not pushing you into a defensive investment cocoon. I still love the opportunity to make huge profits from the advent of new technologies that are revolutionizing both computing and communications in a way not thought possible only a few years ago. Assuming you have measured your risk appetite and incorporated many high-potential return opportunities in your portfolio, adding low-Beta, dividend-rich winners such as last week's and today's (Monday) will improve your portfolio diversification, reduce volatility and add some serious income.
Today's stable dividend winner is in the skyrocketing world of mobile computing. Powerful smartphones are giving us brand new capabilities, which greatly improve productivity. And the growing variety and availability of cloud computing services are already impressive. From mobile e-mail to mobile web-browsing and even mobile video and geo-location-based services, there's a myriad of applications now available to consumers. These services are only possible thanks to large technological improvements and investments in wireless networks.
Ramp Up Your Portfolio's Growth with Dividend Reinvestment Plans
With interest rates near all-time lows and equity markets in flux for much of the past decade, dividends have become an increasingly attractive feature for stock investors. But, while it's always nice to receive those quarterly checks, dividends do little to help you grow your wealth if all you do is spend the money as it comes in.
If that's your approach, it's regrettable because an array of financial and academic studies have shown that dividends have accounted for more than 60% of total U.S. stock market returns since 1870. In fact, research reported in the book "Triumph of the Optimists: 101 Years of Global Investment Returns" found that over the course of the 20th century, a portfolio with dividends reinvested would have generated nearly 85-times the wealth of the same portfolio relying solely on capital gains for growth.
Fortunately, it's now quite easy to take advantage of the growth potential offered by regular corporate payouts to shareholders, thanks to the proliferation of so-called DRIPs - or dividend-reinvestment plans.
If that's your approach, it's regrettable because an array of financial and academic studies have shown that dividends have accounted for more than 60% of total U.S. stock market returns since 1870. In fact, research reported in the book "Triumph of the Optimists: 101 Years of Global Investment Returns" found that over the course of the 20th century, a portfolio with dividends reinvested would have generated nearly 85-times the wealth of the same portfolio relying solely on capital gains for growth.
Fortunately, it's now quite easy to take advantage of the growth potential offered by regular corporate payouts to shareholders, thanks to the proliferation of so-called DRIPs - or dividend-reinvestment plans.
MLPs Top the Yield Charts, but Don't Overlook the Risks
With bank and money market rates bumping along between 1% and 2%, 30-year Treasury yields barely edging above 4%, and many old standby companies having slashed or eliminated their dividends, it's been a rough year or two for income-oriented investors.
As a result, many have turned an eye toward Master Limited Partnerships (MLPs), virtually the only game in town with the potential to give you a double-digit yield on your cash.
MLPs, for those not familiar with them, are tax-advantaged limited partnerships whose units are traded on stock exchanges, just like the regular common shares of corporations. MLPs provide very high yields - typically 5% to 12% - because U.S. law mandates that they pass most of their income on to unit holders. As such, it's not taxed at the partnership level.
As a result, many have turned an eye toward Master Limited Partnerships (MLPs), virtually the only game in town with the potential to give you a double-digit yield on your cash.
MLPs, for those not familiar with them, are tax-advantaged limited partnerships whose units are traded on stock exchanges, just like the regular common shares of corporations. MLPs provide very high yields - typically 5% to 12% - because U.S. law mandates that they pass most of their income on to unit holders. As such, it's not taxed at the partnership level.
Money Morning Mailbag: Taking a Closer Look at Dividend Stocks
Questions regarding defensive investing in uncertain times continue to fill the Money Morning Mailbag as readers aim to gain more knowledge on protective investment choices like real estate investment trusts, options-straddle strategies and dividend stocks.
In Tuesday's Money Morning article "Defensive Investing: Seven Signs Your Dividend is in Trouble," Contributing Editor Martin Hutchinson detailed how high-yield dividend stocks provide a remedy for market volatility. They generate a yield or capital gains when the market is flat or gently rising, and offer protection against a market decline.
"Dividend-paying stocks provide better long-term returns in all but the most extreme bull markets," Hutchinson said. "Build yourself a diversified portfolio of solid dividend payers and you'll be exceptionally well protected."
Companies consistently paying dividends are less likely to have dramatic share-price declines. Meanwhile, investors who go after short-term gains can be left empty-handed when the stock market reverses.
In Tuesday's Money Morning article "Defensive Investing: Seven Signs Your Dividend is in Trouble," Contributing Editor Martin Hutchinson detailed how high-yield dividend stocks provide a remedy for market volatility. They generate a yield or capital gains when the market is flat or gently rising, and offer protection against a market decline.
"Dividend-paying stocks provide better long-term returns in all but the most extreme bull markets," Hutchinson said. "Build yourself a diversified portfolio of solid dividend payers and you'll be exceptionally well protected."
Companies consistently paying dividends are less likely to have dramatic share-price declines. Meanwhile, investors who go after short-term gains can be left empty-handed when the stock market reverses.
Defensive Investing: Seven Signs Your Dividend is in Trouble
Both the U.S. stock market and the U.S. economy are navigating rough waters right now.
U.S. employment, which had appeared to be moving into rapid expansion, suffered a setback in May, with the economy creating only 41,000 jobs. Meanwhile, the stock market - even with the recent rebound that brought it back to the 10,000 level - remains more than 15% below its cyclical high.
That's been the uncomfortable pattern: One economic report points toward a continued U.S. recovery; the next one points toward recession. Sometimes the contradictory research is separated by a single day, other times they are just hours apart. The resultant uncertainty is whipsawing U.S. stock prices - and is leaving investors feeling shaky.
Fortunately, there is a ready remedy, not to mention a place of refuge, from this kind of grinding uncertainty - high-yielding dividend stocks.
U.S. employment, which had appeared to be moving into rapid expansion, suffered a setback in May, with the economy creating only 41,000 jobs. Meanwhile, the stock market - even with the recent rebound that brought it back to the 10,000 level - remains more than 15% below its cyclical high.
That's been the uncomfortable pattern: One economic report points toward a continued U.S. recovery; the next one points toward recession. Sometimes the contradictory research is separated by a single day, other times they are just hours apart. The resultant uncertainty is whipsawing U.S. stock prices - and is leaving investors feeling shaky.
Fortunately, there is a ready remedy, not to mention a place of refuge, from this kind of grinding uncertainty - high-yielding dividend stocks.
To discover the seven signs that a dividend isn't secure, please read on...
Buy, Sell or Hold: TransCanada Corp.'s (NYSE: TRP) Low Risk and High Dividend Yield Break the Waves of Uncertainty
The U.S. stock market has been choppy these past few weeks and it's no secret why.
The European debt crisis is taking center stage and eliciting strong policy responses from key European governments. And while those policy responses have moved in the right direction, we're still waiting on sustainable progress.
In addition, we are dealing with the uncertainties related to the oil spill in the Gulf of Mexico, which could have very important economic and financial implications. As if this were not enough, we saw an escalation of the rhetoric in the seemingly endless animosities between North and South Korea, and Hamas and Israel. And Iran continues to pursue a nuclear arsenal.
The European debt crisis is taking center stage and eliciting strong policy responses from key European governments. And while those policy responses have moved in the right direction, we're still waiting on sustainable progress.
In addition, we are dealing with the uncertainties related to the oil spill in the Gulf of Mexico, which could have very important economic and financial implications. As if this were not enough, we saw an escalation of the rhetoric in the seemingly endless animosities between North and South Korea, and Hamas and Israel. And Iran continues to pursue a nuclear arsenal.
How to Fuel Your Retirement with Dividend Cash
The financial crisis already put a major dent in your retirement portfolio... and the markets are acting crazy again. What can you do to protect - and grow - your wealth in these markets? Dividends are the way to generate real income - no matter where the market turns. Read this report to discover how to infuse your retirement with cash.
Why the Eurozone Debt Contagion is Telling Us That It's Time to Buy Dividend Stocks, REITS and MLPs
With the escalating Eurozone-debt-contagion fears of recent weeks, a significant shift is taking place in the global stock-and-bond markets.
The powerful bull cycle that grew out of the early March 2009 market lows - the quickest and strongest stock-market rebound of the past 50 years - has been losing some of its youthful verve as it matures. That means we can expect the pace of gains to moderate as asset classes (stocks, bonds, currencies, commodities) begin to differentiate themselves.
But that doesn't mean the profit opportunities are gone. As that differentiation plays out, such income-oriented plays as high-yielding dividend stocks, real estate investment trusts (REITS) and master-limited partnerships (MLPs) will prove to be major beneficiaries, experiencing a handsome run-up in price. Shrewd investors will move into those investments before their prices increase.
The powerful bull cycle that grew out of the early March 2009 market lows - the quickest and strongest stock-market rebound of the past 50 years - has been losing some of its youthful verve as it matures. That means we can expect the pace of gains to moderate as asset classes (stocks, bonds, currencies, commodities) begin to differentiate themselves.
But that doesn't mean the profit opportunities are gone. As that differentiation plays out, such income-oriented plays as high-yielding dividend stocks, real estate investment trusts (REITS) and master-limited partnerships (MLPs) will prove to be major beneficiaries, experiencing a handsome run-up in price. Shrewd investors will move into those investments before their prices increase.
To see what stock-market sectors hold the most promise, please read on...
With a Record Amount of Cash on Hand These Companies Are Delivering Dividends
Dividends are one of the most overlooked ways for investors to notch big gains in their portfolio. And with earnings for companies in the S&P 500 surging 176% in the fourth quarter of 2009, more and more companies are using this as an opportunity to reward their investors. Read this report to find out what stocks could bring much needed income to your portfolio.
How Dividend-Paying Stocks Can Help You Tame the Bear
By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report Many investors are so scared by the wild gyrations the stock market has seen of late that they've jettisoned everything – including the kitchen sink – in their search for safety. Not only is this a massive mistake from a timing standpoint, it's also a […]
Boeing Announces $7 Billion Stock Buyback, Declares Dividend
By William Patalon IIIManaging EditorMoney Morning The Boeing Co. (BA), the world's No. 1 producer of commercial airliners, said it will buy back as much as $7 billion of its common stock, the latest leg of a share-repurchase program under which the aerospace company has bought back $8 billion worth of its shares since the […]
Texas Instruments Raises Buyback, Increases Dividend
From Staff Reports Texas Instruments Inc. (TXN), the world's biggest maker of mobile-phone chips, last week boosted its existing share buyback plan by $5 billion and also increased its dividend for the second time this year. The objective: To raise investor confidence after two quarters of to reassure investors after two quarters of declining profit. […]
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