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Dividend Champs 1st Quarter 2014  
Dear Friend,Catherine Head Shot

Happy Friday! 

  

In general, financial markets are off to a slow start in 2014.  They appear to be digesting the big move in the market last year, and trying to figure out what we can expect from the economy for the year ahead.   Certainly the cold weather has caused disruptions in many businesses, especially retail.   No one wants to go out in this arctic air!

 

This is usually a time when we need to remind investors of the benefits of dividend paying stocks.  In this month's newsletter we focus on two companies that have increased their dividend significantly in 2014.

 

Like all of you, we eagerly await the beginning of spring next week!

 

 Signature

Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.966.2712  p
203.966.5697  f 



March 14, 2014|  Issue No. 50
In This Issue
Dividend Champs 1/4 2014
Annuities?
Top Financial Priorities '14
Quick Links
Find Out More
Call me at 203.966.2712
or visit www.caimllc.com.

 


Dividend Champs 1st Quarter 2014

                                                                                                                       

There is no doubt that 2013 was a remarkable year for stocks.  Investment professionals like myself, are still amazed at the size of returns, given our slow economic growth and high levels of unemployment.   We believe the market was able to move to such levels with the help of the Quantitative Easing programs.  

 

Now that that program is beginning to unwind, what can investors expect for the next few years?  Will we see a sizable correction?    Will the economy continue to grow and, if so, at what pace?

 

What we do know is that dividend yield is an important source of total return.  Dividend paying stocks will offer some downside protection during periods of uncertainty and overtime.  CAIM's own investment process focuses on searching for companies  with attractive dividend yields (not necessarily high yields), and the ability to consistently increase the dividend and grow their earnings.

 

In 2013, 96% of the stocks in our portfolio increased their dividend an average of 11.25%.   56% of our companies had a small increase in their payout ratio.  We would like to highlight two companies that have significantly increased their dividend for the first quarter of 2014:

1. Qualcomm (QCOM $76.97, 1.8% dividend yield).  We highlighted Qualcomm back in November as a candidate for holiday gift giving (link).  On March 3, the company announced a 20% quarterly dividend increase from $.35 to $.42 per share.  They also announced an increase in their current stock buyback program by $5 billion.  For a total buyback of $7.8 billion.  The company is expected to grow their earnings by 13% in 2014.  This is as compared to a 6% increase for the S&P 500 yet trades, at a 10% discount to the S&P.

2. Eaton Corp.  (ETN $73.80, 2.7% dividend yield).  Eaton may not be a household name, but they are a global leader in power management solutions.  As stated on their Facebook page:  "We make power operate more efficiently, effectively, safely and sustainably."  The company serves many industries but is best known as the world's largest producer of medium and heavy-duty truck transmissions. So far, in 2014, they have increased their dividend by 16% from $.42 to $.49.  Earnings are projected to grow 16% in 2014, versus 6% for the S&P 500.
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Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER'S INVESTMENT NEEDS AND OBJECTIVES.
 
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