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May 272017
 

Hello loyal readers.  As I stated in a previous post, I have not added as many new articles to the website as I have previous.  I have focused most of my attention on the website http://seekingalpha.com/  where my author page is http://seekingalpha.com/author/jonathan-wolfe

I recently became Seeking Alpha Certified, and I believe currently my exposure on there will help traffic and ideas for my personal website.  Hang with me as I improve my writing and this  website and feel free to comment or email if you have any questions about anything  stock market related!

 

SeekingAlphaCertifiedL Seeking Alpha Certified

 

 

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 Posted by on May 27, 2017 at 8:15 pm
Mar 052012
 

For frequent viewers of my site, don’t think I have slacked off because I’m not producing the 2-3 dividend articles a week that I was, I have just shifted some attention to the website http://seekingalpha.com/

I am hoping to build a larger audience and following through a site which will republish my articles on major sites and hopefully be able to provide exclusive content here for my readers.  I will continue to write the “Dogs of the Dow” series, and some other tips and hot picks.

If you want to view my dividend articles on seekingalpha, view my profile on there: http://seekingalpha.com/author/jonathan-wolfe

Thanks!

Wolfey

 

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Feb 122012
 

A strong dividend play is investing in high yield utility stocks.  Most investors are aware of this strategy, much more than the investments in Business Development Companies or Real Estate Investment Trusts, which I have written articles on here in the past.  Utility stocks are usually considered safe dividend stocks, due to the constant demand for their services (electricity, water, gas, etc).  This article is going to focus on high yield utility stocks in the electric sector.  I am going to even focus even deeper and talk about electric companies with generation and distribution pieces.

Q3 (Sep ’11) Q4 (Dec ’11)

2011

EXC -Exelon
Net profit margin

14.26%

13.01%

Operating margin

24.98%

23.35%

EBITD margin

30.31%

Return on average assets

4.45%

4.65%

Return on average equity

16.91%

17.86%

Employees

19,214

P/E Ratio

10.67

Dividend Yield %

5.24%

DUK – Duke Corporation
Net profit margin

11.83%

9.25%

Operating margin

19.35%

16.17%

EBITD margin

28.69%

Return on average assets

3.12%

2.27%

Return on average equity

8.33%

5.95%

Employees

18,440

P/E Ratio

15.52

Dividend Yield %

4.66%

SO – Southern Company
Net profit margin

7.49%

12.84%

Operating margin

15.94%

23.96%

EBITD margin

33.69%

Return on average assets
Return on average equity
Employees

25,940

P/E Ratio

17.26

Dividend Yield %

4.23%

D – Dominion Resources
Net profit margin

10.41%

19.61%

Operating margin

21.90%

37.51%

EBITD margin

44.45%

Return on average assets

3.63%

6.98%

Return on average equity

13.49%

25.56%

Employees

15,800

P/E Ratio

19.03

Dividend Yield %

4.26%

TE – Teco Energy
Net profit margin

7.10%

8.16%

Operating margin

17.37%

18.59%

EBITD margin

28.30%

Return on average assets

2.92%

3.74%

Return on average equity

9.42%

12.29%

Employees

4,233

P/E Ratio

14.12

Dividend Yield %

4.94%

PPL – PPL Corporation
Net profit margin

14.39%

 9.60%

11.44%

Operating margin

25.13%

 20.37%

23.71%

EBITD margin

33.42%

Return on average assets

4.42%

 3.89%

3.86%

Return on average equity

16.49%

 14.88%

15.17%

Employees

13,809

P/E Ratio

10.85

Dividend Yield %

5.05%

PGN – Progress Energy
Net profit margin

10.67%

8.51%

Operating margin

25.12%

20.16%

EBITD margin

29.19%

Return on average assets

3.52%

2.70%

Return on average equity

11.58%

8.83%

Employees

11,000

P/E Ratio

20.61

Dividend Yield %

4.55%

FE – First Energy Corp
Net profit margin

10.79%

5.70%

Operating margin

21.66%

13.53%

EBITD margin

19.12%

Return on average assets

4.33%

2.20%

Return on average equity

15.74%

9.17%

Employees

13,330

P/E Ratio

17.75

Dividend Yield %

5.16%

 

Exelon – EXC is the largest power producer in the United States.  Not sure if its merger issues or what, that has the stock stale at about 40 dollars a share.  EXC has extremely positive numbers with over a 5% dividend yield and a PE ratio of just over 10.  The other numbers above show a positive trend and larger profit margins than most over utilities listed.

Duke Energy – DUK is approaching a price high they haven’t seen since late in 2006.  The stock is approaching 22 dollars a share.  DUK has a very strong dividend yield of 4.66% and a PE of 15.52.  DUK is also showing positive growth in net profit margin and operating margin, but not the same margins that Exelon is showing.

Southern Company – SO has just came off of an all-time high and their stock is sitting just below 45 dollars a share.  SO continues to show strong net profit and operating margins as well as increasing dividend payouts.  SO yields 4.23% with a PE of just over 17.

Dominion Resources – D just like Southern Company is coming off of an all-time high, and their stock is sitting just below 50 dollars a share.  D has shown some of the strongest margins over the past couple of years, but their margins have slipped the past couple quarters.  D yields the same as SO, with a 4.23% yield and a slightly higher PE of just over 19.

TECO Energy – TE, is the smallest company I have listed here.  I have included TE here due to their high dividend yield, 4.99% and their PE of 14.  But buyer beware as they just missed earnings for the 4th quarter, with lower revenues.  However, they did increase the dividend once again, so keep an eye on TECO.

PPL Corporation – PPL beat 4th quarter earnings estimates by 8 cents a share.  PPL like TECO decided to raise their dividend 1 cent per quarter to 36 cents a quarter.  PPL has a 5.06% yield and a PE of 10.85.

Progress Energy – PGN sits in the same mold as DUK, SO, and D with its stock at an all-time high.  PGN has a 4.54% yield and a PE of over 20.

First Energy – FE has been a stock laying around 40-42 dollars a share for quite some time.  FE has a PE of just under 18, and a yield of 5.16%.

I could have written pages on each of these companies and reasons of why and why not to buy these stocks.  I want to make this as simple as I could for everyone reading this.

Avoid SO, D, PGN, and DUK.  All these stocks are at or near all-time highs.  There are better stocks in this sector for growth.  Double avoid SO and D as their profit and operating margins have fallen quite a bit.

Watch and wait on TETE has fallen from over 19 at the start of the year into the mid 17’s.  As mentioned, their earnings report was well short this quarter, but I believe this is a stock to buy if it falls to 16 a share.

These are the stocks to buy from this article, EXC, PPL and FE.  Why these three?  All three have dividend yields over 5%.  All three stocks are well below their all-time highs and they have room to grow.  EXC and PPL show PE ratios that are under 11.  FE has shown increases in profit and operating margins.  These are the high yield utility stocks you should look to invest your money in.

Full disclosure: I own PPL, and DUK.  After research/writing this article, I am planning to sell DUK, and placing an order on EXC.  I will also place a limit order in for TE at 15.90 a share.  I also work for PPL, and I am long in my position with PPL.  I have not given any inside information on PPL in this article and all information in this article for PPL is readily available on their quarterly and annual reports available on their internet website.

Originally posted February 12, 2012

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Feb 072012
 

I know some people won’t want to even venture into these stocks, but there is money to be made in stocks that aren’t healthy or popular.  I’m not talking about fast food today, I’m talking about tobacco stocks.  I want to talk about the following high yield tobacco stocks:
ReynoldsAmericanLogo A sin Investing in high yield tobacco stocks
altria logo A sin Investing in high yield tobacco stocks
pmi logo A sin Investing in high yield tobacco stocks
VectorGroupLogo A sin Investing in high yield tobacco stocks
lorillard logo A sin Investing in high yield tobacco stocks
universalcorp A sin Investing in high yield tobacco stocks

These high yield tobacco stocks had a killer year in 2011, and are showing income gains for 2012 as well.  Do I think tobacco stocks can duplicate their 2011 performance?  No, I don’t think so, but I think a couple of them can outperform the market.  Below I’m going to talk about the top high yield tobacco stocks for the near term.

RAI is Reynolds American Inc.  They are best known for making Camel cigarettes.  They had a monster year in 2011, going from 32 dollars a share to 41 a share, while also raising their dividend from 53 to 56 cents a quarter.  Earnings are projected to increase 6% for 2012, while paying well over 5% yield.

PM and MO are stocks spun off from Philip Morris.  PM is Philip Morris International, which basically sells tobacco products internationally.  MO is Altria Group, and the parent company of PM.  Altria sells to the domestic clients, plus owns a large share of SABMillerCoors.  PM is showing a bit extra growth over MO, but has a smaller dividend yield than MO, 4.11 to 5.73% respectively.  PM and MO also have the highest net margin of all the tobacco stocks.

VGR is Vector Group LTD.  They manufacture Liggett cigarettes and also own real estate properties.  VGR stock has not increased much year over year, but pays nearly a 10% dividend along with a 5% stock dividend.  Please refer to my article about why to own dividend stocks where I talk about VGR and the profit you can make off of it.

LO is Lorillard Inc.  They are best known for manufacturing Newport cigarettes.  LO is highly institutionally owned, at 97%.  LO also had a huge year, going from 74 a share a year ago, up to 110 bucks today.  LO has a big dividend, at 5.20 a year, a yield of 4.7%.  The only negative about LO is pending litigation against menthol cigarettes, and a decreasing net profit margin in 2011.

UVV is Universal Corporation.  They are more on the side of growing the tobacco leafs, and not on the cigarette business.  UVV pays a 4.3% dividend.  UVV scares me based on their losses on gross income in the last quarter they have reported.

So I’m not here to convince you to be a sinner and buy any of these tobacco stocks, but I wanted to give you the pros/cons of them, and I personally believe there is money to be made off of them.

My picks, I would avoid LO and UVVMO has been industry best for years.  RAI still has room to grow.  If you want to pick two to invest in for cash money, I would pick MO and VGR.  If you want money and growth, pick PM and RAI.  Hope this gives you a little insight to the options for high yield tobacco stocks for you.

Disclosure, I am long MO and VGR.

Originally published February 7, 2012

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Feb 032012
 

I had two dividend picks (and one related) dividend pick for January 2012.  Both picks, as expected are flying high currently.

See the links below to read those articles:

Rentech Nitrogen Partners – Wolfey’s First Dividend Pick Of January 2012

Hercules Technology Growth Capital – Wolfey’s Second Dividend Pick For January 2012

Rentech Nitrogen Partners, ticker symbol RNF was my first dividend pick for January.  I said it was a steal at 19 dollars a share and ride to 30 and beyond, along with a related nitrogen stock, UAN.  UAN has not grown as fast as RNF, but they have gone from 28 a share when I reported this to over 30 a share currently.  However RNF has really taken off, breaking the 25 dollar barrier today.  During this time, UAN has also announced a dividend payout of just under 60 cents a share for this quarter.  This is quite a healthy payout for a new stock.  I expect the same type of announcement from RNF in the near future, which will only send this stock even higher!  Cheap natural gas prices and high oil prices will also continue to support a rising share price for RNF.

Hercules Technology Growth Capital – HTGC was the Business Development Company that I highlighted a short time ago.  The stock had a big dip into the 9.50-9.70 range just two weeks ago based on the company issuing 5 million more shares of stock to boost their abilities to finance more small companies.  I said don’t let this scare you on this dividend pick, as the book value for the company was still over 10.50 a share, and there would be no reason they wouldn’t be able to continue paying their 22 cent a quarter dividend.  Small businesses are continuing to grow here in America, don’t always believe what you hear on the news.  Along with that, HTGC is up to nearly 11 dollars a share.  This is where the stock should be, now sit back and collect your healthy dividend or flip it for a quick 12-15% gain.

Check back again soon for the dividend picks for February 2012.

Disclosure: I own UAN, RNF, and HTGC.  I am long UAN and RNF, though I am currently evaluating my position on HTGC.

Update on Wolfey’s dividend picks was originally written on February 3, 2012

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 Posted by on February 3, 2012 at 11:03 am
Jan 292012
 

This is Wolfey’s stock pick of the week for January 12th 2012

The above video was about my love for Rentech Nitrogen Partners – RNF.  This was an IPO in early November, but it was overshadowed because it came out the same day at Groupon.

Why do I like Rentech Nitrogen Partners?  It is located in Illinois, with close proximity to the Mississippi River.  They serve the corn belt which reduces their freight expenses, plus a lot of their business is gate business, meaning ZERO freight costs.  They get a premium price for their product based on the location as well.

Why else?  Their expected yield is between $2.00-2.33 a share.  This is around 10% dividend yield.  Also, there is no distribution until May of this year, so the common people have not caught on to this stock yet, like they are currently with UAN, which has increased by about $5 during the last month.

They have also pre-sold a good amount of 2012 fertilizer at prices above the speculated prices the company set.

Final reason for this video – Rentech Nitrogen Partners sold as an IPO for around 20 bucks a share.  They fell initially but are now on an upswing back to 20 bucks a share.  Ride this stock all the way to 30 bucks and beyond.

Note: Since this post was written, RNF was invited to ring the opening bell at NYSE on January 19th.  Impressive for a brand new company.  Visit Rentech’s website www.rentechnitrogen.com to learn more about the company.

Disclosure – I am long RNF.

This article on Rentech Nitrogen Partners – Originally posted on January 12, 2012

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Jan 282012
 

People have been sending me questions about how to calculate dividend yield of a stock? Sometimes its as easy as multiplying the past dividend by 4, as the majority of stocks pay the same quarterly dividend every 3 months.

For example, Duke Energy, DUK pays 25 cents a share per quarter, multiply that by 4, and you get $1.00 a share for the year. Divide that number by the current share price, $21.40 a share, the yield is 4.67%.
Let me take a more difficult example. Chimera Investment Corporation, CIM paid 11 cents on the last quarter. Multiply that number by 4, and you get 44 cents a share. Divide that number by the current share price, $2.74, the yield is 16.06%. Most sites will post this number, which can be a real misnomer. CIM actually paid 51 cents over the previous year, which would show its true yield being higher than that 16% figure. However, a lower yield may be better than a false high number.

A false high number could be caused by a one time dividend payout, or a company that has a variable payout, or a third option, a company that does not pay dividends on the normal quarterly schedule. An example that came up is Frontline, FRO. Review the 2008 chart. The quarterly dividends were paid like this:

1st quarter: $2.00
2nd quarter: $2.75
3rd quarter: $3.00
4th quarter: $0.50

As you can see, depending on what quarter you reviewed the stock, the dividend yield calculation could be completely different, and give someone a false high (or low) on the stock. Buyer beware.
My advice is to review dividend payouts over the previous 2-3 years, and review the earnings for the company for the next two quarters. The earnings better be at least enough to pay the dividend, and hopefully more. I will write about dividend to earnings ratio in a future post. Hopefully you now know how to calculate dividend yield.
Disclosure: I am long CIM

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Jan 212012
 

I hope some of you bought RNF as I mentioned in a video earlier this month.  It has steadily rose to over 21 bucks a share now.  That is a 8% increase from when I recommended it.  Hold both RNF and UAN, I feel they both have 35 dollars a share capability here in 2012, plus killer dividends.

I would like to focus on a stock in another area that I have highlighted here on the site, Business Development Companies.  As I mentioned in my post that highlights BDC’s, BDC’s were created to help small to medium sized companies with oversight and capital that they would not be able to obtain from traditional sources.  There is one specific one I want to highlight today.

Hercules Technology Growth Capital (HTGC) is the largest publicly-traded specialty finance company addressing the capital needs of venture capital and private equity-backed companies. They provide customized debt financing solutions to high growth, technology-related companies, including Cleantech, Life Sciences and select lower middle market companies to help them reach critical growth milestones at all stages of development.

I know some of you are thinking that with interest rates at an all-time low, and the economy in a poor condition that this stock has little to no upside.  I’m going to tell you why I believe that is not the truth.  Small businesses are growing here in America, along with a changeover to tech based companies.  However traditional lending sources such as banks are making it very difficult for these companies to get loans.  Hercules will give these companies that capital.  The stock fell big here on January 20th, with an announcement that they will be created 5 million additional shares of stock.  Don’t let this worry you.

Hercules has a book value of just over 10.50 a share, and are currently priced at 9.70 a share.  They also pay a healthy quarterly dividend of 22 cents, which is close to a 9% yield.  With earnings projections going up for HTGC, its time to jump in this BDC. See the chart below for HTGC over the past 6 months.

htgc chart Hercules Technology Growth Capital Wolfey’s Second Dividend Pick For January 2012

I am long HTGC.

Hercules Technology Growth Capital Article originally written on January 21, 2012.

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