stocks, reits and at&t

thehobbit

thehobbit

Well-Known Member
I mainly buy stocks in companies that pay dividends such as apple, ford, aflac, lockheed martin, conoco phillips and such with a few stock picks for growth such as sirius xm and facebook. My question is given at&t's p/e of 9.5 a dividend of 5.7% and 25 years of consistently raising the dividend payments, can any of you think of any reits or dividend paying stocks that could perform better? I've went thru the entire list of the S&P 500 dividend aristocrats list and I didn't see any that is beating AT&T performance.
 
Several things scare me with AT&T. First, their debt is too high, and they keep issuing more of it. Always something that scares me away. I want to see a company have no more long-term debt than could be paid off with three to five years of earnings. They barely meet that test, but they keep issuing more of it, and their last quarter showed an operating loss. Margins have also been on a downward trend for the past five years. So while last year's numbers make it look like they could pay off the debt, it looks less likely going forward.

They're also paying out nearly half of their earnings in dividends right now. With margins shrinking and an operating loss, that makes me wonder how long they'll keep the dividend where it is. That 5.7% dividend could quickly become 3%.

That said, I didn't run any real numbers on it, so it's possible that the current price makes sense. I just doubt it based on quick glance.
 
Not really what I was looking for, so I'll clarify. I'm looking for companies that have a P/E lower than 20 and have consistently paid dividends for the last 10-15 years with raises. I can read the 10-k's myself and make my own decisions, just seeing if any here knows those kinds of companies that fit this profile off the top of their heads.
 
No trading advice, but I'm a big fan of EPD (oil pipeline company), its price is quite high right now, but it might be a good option over the summer if the share price drops which I suspect it might. Another one is PBA (Canadian), same as above but with a very high P/E also because of the high oil prices right now.

EPD pays quarterly dividends and has been increasing them pretty much YOY for awhile, PBA is monthly with some increases as well. I just sold some shares of both companies, I'll be looking to buy more shares during a good pullback this summer. Might not be the best buy at this exact moment, but worth watching.

Good Luck
 
EPD is too mixed for me to get a good read on it without plugging it into the trusty spreadsheet, but PBA is paying out over 140% of its earnings in dividends. That can't last long. Big red flag if you're looking for a dividend paying stock.
 
That may be true (though they did just up it a few months ago), but I still like it very long term when it's cheaper and after a dividend cut. Yeah, EPD is tricky it's had a good run and I've also cut some loose, we'll see.

What's your trusty spreadsheet? Pay-software or something personal?
 
ATN_Pilot said:
Nah, my own contraption that I've put together over the years.
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Please don't feel like I'm asking you to reveal your proprietary trading strategy but just curious did you just put a much of fundamentals in columns and come up with some formula that gives you the green light or does it put everything on one screen so you can look at it. I've never put info into a spreadsheet before which is why I'm asking. I have my scan set up and then I look at some studies on the chart if the fundamentals checkout in the scan. I'll also scan for technicals which I know is voodoo to you!
 
First, I don't have a trading strategy, because I don't trade. I invest. ;)

What I've done is really not all that incredibly complicated. My favorite online stock research web site, which is dedicated to value investing, has the ability to download just about every piece of financial data imaginable for the past 10 years on any stock into an Excel spreadsheet. I import that spreadsheet into a sheet on my Excel workbook, and another sheet is designed to find all of the data that I've found relevant to value investing and put it all on one page for a quick review. For example, instead of digging through 10 years of 10Ks to find out if earnings are consistently growing, the Excel workbook looks at the data imported and just gives me a yes or no answer on that question, along with about 30 or 40 other criteria. I've setup an algorithm that takes all of that data and outputs it to an appropriate discount rate, and then it does a discounted cash flow analysis using that discount rate to determine the intrinsic value.

After that, if it puts out an intrinsic value that is at a significant premium to the current price, then all I have to do is a quick look through the latest 10k to make sure that none of the footnotes raise red flags, and then look through the latest news on the company.

The whole thing cuts down the time needed to completely analyze a stock to about an hour or less. It took a while to get it all setup, but it's a huge benefit now.
 
b3181981 said:
Not really what I was looking for, so I'll clarify. I'm looking for companies that have a P/E lower than 20 and have consistently paid dividends for the last 10-15 years with raises. I can read the 10-k's myself and make my own decisions, just seeing if any here knows those kinds of companies that fit this profile off the top of their heads.
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The SDY and VIG are both index ETFs that own basically those types of stocks. I'd look at the list of their holdings and pick what you like. Here's the VIG portfolio: https://personal.vanguard.com/us/Fu...&tableIndex=0&sort=marketValue&sortOrder=desc

I'm lazy - I just hit the easy button and buy the index ETF. It is unlikely I would do any better picking stocks myself, and even if I could, the increased commissions and taxes would probably erase any upside.
 
I tell everyone the same thing. If you're not willing to put in several hours of work every week on researching your investments, and/or you don't have the ability to divorce emotion from investing, then index ETFs are the only way to go.
 
ATN_Pilot said:
I tell everyone the same thing. If you're not willing to put in several hours of work every week on researching your investments, and/or you don't have the ability to divorce emotion from investing, then index ETFs are the only way to go.
Click to expand...

Besides, doing research on options and futures strategies is more fun :)
 
ATN_Pilot said:
Yeah, screw books! That knowledge stuff is for suckers. :sarcasm:
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It's none of my business, but I'm pretty sure you're saying that to a guy who wildly outperforms your own accounts, but okay.

I mean, you can brag about being an investor or about book knowledge, but the only metric that matters is account performance.
 
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