With a bullish bias to today’s various earnings results, the liquidity-driven stock rally continued to march on. When it stops nobody knows (more on this below).
Some of today’s earnings winners included General Dynamics (GD), Harley Davidson (HOG), United Parcel Service (UPS), and Raytheon [RTN]], as well as recently beaten-up Cliffs Natural Resources (CLF). There were some stocks not feeling the earnings love, however. Those names included Qualcomm (QCOM), Stanley Black & Decker (SWK), and 3M (MMM). One interesting note came out of Intuit (INTU), which warned about a disappointing tax season. I’m wondering what the implications will be when it comes to the current economic picture.
What a tug of war we have with market pundits who are relying on the argument of valuation being way too high for stocks that have anemic growth (I’m partly in this camp). On the other hand, others (the other camp I’m in) will say this rally is all about liquidity (of the Federal Reserve variety). Yes, we have dividend hikes and share buyback announcements that are being delivered at the same time, helping mask the revenue growth predicament, but these developments are not enough for some market observers to jump into the markets with both feet.
For dividend investors, the hardest thing has been to remain patient in putting capital to work in the best ideas (where valuations and dividend yields are still somewhat attractive). There have been stocks that we removed from the recommended list recently (not “sells” however) that we felt needed time to catch up valuation-wise, but yet they have continued to run higher. So you see, the investment game isn’t always a perfect science. The thing is though, if you have positions that are going higher (fortunately most of our subscribers do, as dividend stock returns have been and continue to remain stellar), you can not lose your mind about wishing you had put more money in. The opportunities will come and pullbacks will happen. It will be when things get scary that those opportunities come back into play and more ideas become attractive again.
In the meantime, we keep monitoring all the data and newsflow we have, and put our game plan in play on what we expect to happen, not what has already happened.25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been paying out dividends for 25 years or more. Be sure to check out the latest list of names here.Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the difference dividend payouts made in the overall return investors saw throughout the prior decades. Here are some of the highlights:
- The Nasdaq is down 28% since the end of 1999. Even the “blue chip” S&P 500 stocks are down 15% during that time frame…until you add back those “boring” dividends. With dividends included, the S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a loss for the 25 long years from August 1929 to August 1954. Then again, without dividends, the S&P 500 produced a 5% loss during the 13 years from September 1961 to September 1974. But with dividends included, the S&P’s loss became a 46% gain.
- Over the course of the last half-century, dividends have contributed more than half of the stock market’s total return — 56%, to be exact.
Of course, you can’t discuss the potency of dividend investing without making mention of how awesome compound returns are. I can’t stress enough the power of compound interest: you take a small amount of money and turn it into a large amount over time. Finding the right companies at the right price points which not only grow earnings, but also grow their dividend payouts as well!
We have much more about why Dividends are so awesome if you check out our “What is a Dividend?” page here.New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist Names post that is out today, exclusively for Dividend.com Premium members. This list gives readers a good idea of what stocks we’re watching behind the scenes here for potential upgrades.Go Beyond This Newsletter
We know many of you enjoy reading the daily newsletter, but remember that with our Dividend.com Premium service, the newsletter is just one small component of what we offer. Here are the “Big Three” benefits of our Premium service:
- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.
- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.
- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a “Dividend Capture” trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.
We don’t ask for a credit card to use our free trial, and we don’t bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Dividend.com Premium a shot if you haven’t already subscribed!
Thanks for reading, and I’ll see you tomorrow!
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