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Swap out of bonds into divvy payers?

Thought I'd keep blogging occasionally even tho' SLO-1 has wrapped up. Still haven't decided if I'm going to play in the next round yet

Bond yields are starting to look down right anemic. At today's market close, the 2-year yield is 2.76%, the 5-year 3.16% and the 10-year 3.84%. With those yields, I'm considering moving some of my bond fund investment to dividend paying stocks. Three candidates from my SLO-port are Novartis, Unilever and Anheuser Busch. Those three have done reasonably well over the past several months, but I wanted to see what else might be kicking around out there, so decided to play around with Yahoo's stock screener.

The screen was set to look for stocks yielding between 3.5% and 6%. The lower limit is 90% of the 10-year's yield; the upper limit was selected to try and screen out companies with problems. I wanted to stick to companies with earnings, so the PE filter was set greater than zero and less than 20. I also wanted some predicted earnings growth to protect the dividend and provide some room to raise it, so the screener's estimated 5-year earnings growth rate parameter was set for greater than 5%.

The screen turned up 110 stocks, with at least some hits in every sector except for conglomerates (GE and PPG were close, but their yields were a little below my cutoff). Even tech turned up nine hits. So, I've got to refine the screen a bit and still have some work ahead of me. May also go back to toroandbruin's entries on screeners (1, 2, 3, 4, 5, 6) and try some of the alternatives to the Yahoo screener.

I haven't looked into the hits in any detail yet, but there seem to be plenty of candidates that at least pass a cursory filter on fundamentals. In this uncertain environment, stocks with safe dividends present a very attractive alternative to bonds for income investors and that should put somewhat of a floor under the prices.

At time of posting, I don't have positions in any of the companies mentioned in this entry.

Thoughts and comments are welcome.

Comments: View Comments |  Monday January 7, 2008

Archive Comments (6)

Russell Muscle(head(
Who had 'Binds' in the 1st Place.
They get inflated OUT - they are 'Bonded'
by OutFITS like the Fed'l Gov't which pays back in Inflated Currency or Debtors ( Like Municipalities ) who get the Debt ReVoked in BankRuptcy, etc
For Conservatives types the UTES look good ( I like Dominion ( D )and Duke ( DUK ), especially.
I also like Pipes ( Spectra Energy (SE ) ) and Ships - TNP, DRYS,DHT,etc. Also the Canadian Oil Trusts. All for Stable Income with a Growth & Inflation Protection 'Kicker'. Ther are many MORE, too.

Sub-M.I.T.-TED by a ComPlete Stranger to what the SLO was or IS aBOUT. A Stranger in a Strange Land - fka VW Micro-Risker.

fka - formerly known as

Posted by don ferk January 7, 2008 11:29 PM

Russ,
thanks for your screening ideas!
We all make some kind of watchlists and try to translate them in workable or well-balanced portfolio etc. Here are stocks broadly representative of the S&P 500, with some mid-cap names for capitalization diversification purposes, yielding 2.3%.
HD MCD (Cons)
MO PG (Staples)
SUN SPN(Ener,)
BC CB BEN(Finserv)
JNJ SGP UNH ( Health)
CSL GWW (Indu)
ADP CTXS IBM (Info)
ARG (Materials)
CZN (Telser)
GAS ( Utilities)

btw- I encourage you to continue blogging or building track records at Marketocracy if you will, so we can read your story, as well. Eventual lower performance in one or two SLO rounds doesn't necessarily mean we end as mediocre performer in the next 20 years or so!
Armin

Posted by astuk January 8, 2008 6:18 AM

Armin,
If BTW is Becky - Give it up, son. I got THERE 1st Test with the Most Test. Gnome Ime sane. Nada / Hech. Nah-Meeshah. Struck OUT - Shot Down in the Slit Trenches. Didn't even get a Base Hit [sigh] [ SIGH ]

I still haven't found a Shipping Company that has a Pre-Pond-ur-ance of the Wayt of Evvy-Dunce that it is a Collier - Coal Carrier.

I think Coal IS the WAVE O'da FUTURE.

Any IDEAS ??????

Don L. Ferk
( aka a guy Blogged like Krazy & got SLO Beat(NIK-ed ) buy a Guy blogged only Once ( Count 'em (1) Time ))

The Masters Make the Rulz 4 the Wise Guyz & da FOOLz ( like DuffBeer ) Butt i Yam outta Here & Duffy's outta Beer, 2 )

Wanna Join a Under(G)Round Klub of Smart Guys- Well - e-mail me & We'll FINE out how to By-Pass the SLO & go,Go,GO......!!!!


Posted by don ferk January 8, 2008 1:56 PM

Russ, Are you still up for AT &T ???? I think it is over reaction !!!
Mr Market as Don has named drops much faster then when going up.
Now T shall be placed facing the wall standing in the corner,you remember those class room days. Nah you were the kid that never got caught . That is how I learned to be a better listener. T will not matter for a couple of 1/4's.
Russ, Check out Draft magazine nice article about California red wines.
See I know a little more then just beer.
I do like your idea about dividends and that great Tag Team of Astuk & VW chiming in with some dollar ideas.
Cheers ,DuffBeer

Posted by duffbeer January 8, 2008 8:52 PM

Wait, wait DuffBeer! Now I sense you know more than just beer and perhaps make a portfolio like well balanced wine, as wine has 200 different scents on it's own and would suggest here to taste Zinfandel that was for many years somewhat of a mystery grape, as far as its origins are concerned. Anyways ,in California, Zinfandel is the #2 most widely planted red wine grape. Recent research shows that the grape originated in Croatia, not southern Italy, as previously thought.
Wildly popular in the U.S., many consider Zinfandel the original "California red." In fact, California is the largest grower of Zinfandel. Considerations apart,
cheers with a glass of glass of sparkling wine prosecco, though!

Posted by astuk January 9, 2008 6:19 AM

RUSSian ROUNDer BOUNDer - INda Mud [ & Mine(d) ]

Kali- Forn -I - Ck- ATE-ers ARE red,RED Winos Kommie-Style( UB=40 - Unemployable Benny-on-the-fritz For(U)m 40 WiseR).

If I had a BOOK O' Matches ( one side o'Witch is My Mud-Slide LAND-SLIDE
( deal & a CON-Crete PO'-our & duh UDDER side iz me BACK-side )),
I'd burn THAT NO-TELLing MO-Tell-ing Whore-tel DOWN.

Except - Global Warming & Smoky Bear Forest FIRES ( Bons O'da VAN- I-Ties)
has already Dresden-Aded it. I can ONlee get SLOPPY 2ndS.

I like German Wines - fruity Mosel - like QualitatsWein ( no PredIkat )
Reislings of ArsVitIS - $10 a ( Soda) POP.

I got a bottle O'Thierry&Guy FAT BasTARD Shiraz ( reMARK-able-y
FULL BODied ) just waitin' to be celebratorily PO'ured,2

This year's Bo Jolly BeauJolAise was a Little too GREEN 4 my Taste - which has
been Seeriously IMPaired by my DuffBeer Bud's . well, BUDZ.

WHAT about Coal SHIPS - Colliers !!!!!!!!!!!!.

THAT's the ( Mutiny on the Bounty ) MAIN ( Sail-setting) kWEST-SHUN O'da Day !!!!!!
Not SO ???

Not SLO. either
VW ( Vino WiKnow)

Posted by don ferk January 9, 2008 12:09 PM

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