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Posts Tagged ‘dividend income’

Know the Rules of Investing

In a recent interview, Tony Robbins stated he has coached a successful trader for more than 20 years. The person he is talking about is Paul Tudor Jones, one of the most successful investors of all time and owner of the Boston Red Sox baseball team. Robbins found Jones, and other wealthy, successful people like him, were constantly looking to learn more about money. He stated:

It isn’t about the money! That’s why I call it ‘MONEY: Master the Game, his latest book.’ It is a game. A lot of people get offended by that, like ‘Oh my God! How could he call it a game?’ It is. “The wealthiest people in the world know it’s a game, and the reason they succeed is they know it’s a game. They know there’s certain rules. If you know the rules, you can win and if you don’t you’re gonna lose. Rather than be pissed about it, learn. “

I agree in being successful requires knowing the rules of the game. In my perspective, the rules are the trading plan – designing a strategy and knowing when to enter and exit a trade. At Get Rich Investments, we focus on producing income each month. To be consistent, e follow a set of rules we have learned from over 20 years of investing. The markets are always changing due to events, direction trends and volatility, This is why our income strategy incorporates several options to be successful. These strategies allow our members to be agile and to profit regardless of market sentiment and volatility.

Some investors are comfortable earning a 3-4% dividend yield to meet their income needs. If you seek more return, then join our income plan to earn 10-15% in income each year. We focus on world class stocks with nice dividend payments. But we juice our returns by collecting option income in addition to dividends. This strategy works with all sizes of account amounts- you don’t need a million to started. And, the sooner you get compounded your returns the more income you can create each month.

Start learning the rules of successful investing.  Subscribe to the Monthly Income Plan.

Dividend Growth with 60% Upside

Trinity Industries (TRN) – Stock Summary

The stock pays a modest dividend yield of 1.07% but it has significant dividend growth potential in the coming years.  The Company has a 5 year average dividend growth rate of 13.40% with dividend growth of 36.36% in the last year.   The dividend will continue to grow as the EPS growth for next year is projected to be 27.23%.  EPS growth in the last quarter was 59.49% compared to the same quarter from a year earlier.  The stock has an equity summary score of 9.9 out of 10 for a VERY BULLISH outlook among analysts.  The stock is reasonable priced with a price to sales ratio of 1.07.

The stock is projected to have earnings of $5.92 in 2014.  Based on a PE of 15, the stock has a 12-month price target of $89, an increase of nearly 60% in the next year.

Trinity Industries, Inc. has declared a quarterly dividend of $0.15 per share on its $1.00 par value common stock. The quarterly cash dividend, representing Trinity’s 199th consecutively paid dividend, is payable January 31, 2014 to stockholders of record on January 15, 2014.

Recent Earnings

Trinity Industries, Inc. announced earnings results for the third quarter ended September 30, 2013, including the following significant highlights:

  • Record quarterly earnings per share of $1.26, a 58% increase year-over-year
  • Anticipates fourth quarter earnings per common diluted share of between $1.24 and $1.34 and raises full year 2013 earnings guidance to between $4.55 and $4.65
  • Rail Group receives orders for 5,610 new railcars during the third quarter resulting in a backlog of 40,050 units with a value of $5.1 billion
  • Structural wind towers business receives orders with a value of $442 million, extending production visibility through 2015
  • Company repurchases approximately 540,000 shares of its common stock during the quarter at a cost of $23.9 million
  • Available liquidity at the end of the third quarter of approximately $1.2 billion

Trinity Industries, Inc. reported net income attributable to Trinity stockholders of $99.6 million, or $1.26 per common diluted share, for the third quarter ended September 30, 2013. Net income for the same quarter of 2012 was $63.2 million, or $0.80 per common diluted share.

New Developments

Trinity Industries Inc. announced on 1/10/2014 that it  has acquired the assets of WesMor Cryogenic Companies through a newly formed subsidiary.  WesMor specializes in the manufacturing, repair, and rehabilitation of cryogenic containers that store and transport LNG and other industrial gases with initial expected annual revenues of approximately $25 million. The transaction includes the acquisition of a manufacturing facility in La Porte, Texas, and three service facilities located in La Porte; Slidell, Louisiana; and Port Washington, Ohio.

Recently, equipment finance company Element Financial Corporation (ELEEF) announced that it has entered into a strategic alliance agreement with Dallas-based Trinity Industries, Inc. (TRN) , a railcar manufacturer and lessor, to provide lease financing for up to US$2 billion worth of railcars over the next two years.  Under the terms of the Agreement, Element will be presented with “preferred opportunities” to enter into lease financings for a diversified fleet of railcars, including new railcars to be manufactured by Trinity , existing railcars from Trinity’s lease fleet as well as secondary market purchases.

Trinity Industries, Inc. recently announced that its subsidiary, Trinity Railcar Repair, Inc., has acquired the assets of Seaboard Railcar Repair (“Seaboard”). Seaboard provides a full range of services for both tank and freight railcars ranging from standard maintenance and program modifications to specialized cleaning, blasting, lining, painting, inspection and testing. The transaction includes the acquisition of two maintenance facilities located in Oklahoma and North Carolina with access to a number of major railroad interchanges. The assets and results of operations of this acquisition will be reflected in the Rail Group for financial reporting purposes.

Trinity Industries, Inc., headquartered in Dallas, Texas, is a diversified industrial company that owns a variety of market-leading businesses which provide products and services to the industrial, energy, transportation, and construction sectors. Trinity reports its financial results in five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Energy Equipment Group.

The Right Chemistry for Growth and Income with 42% Upside Potential

What more can an income investor want than a dividend growing at 35% per year and price upside potential of 42% in the coming year.  This is exactly what is possible to owners of Celanese Corp. (NYSE: CE), a global producer of industrial chemicals.  While the current dividend yield is only 1.0%, it will likely continue to grow as EPS is projected to increase 14% in the next year.

The Company has increased its dividends by 140% in the past year and boasts of a 5-year average annual dividend growth rate of 35.1% per year.  The current payout ratio is 21.24%.  Celanese announced a 100% increase in the company’s quarterly common stock dividend on July 25, 2013.  The dividend rate increased from $0.09 to $0.18 per share of common stock on a quarterly basis and from $0.36 to $0.72 per share of common stock on an annual basis.

Celanese posted adjusted EPS of $1.20 per share in Q3, up from a $1.12 gain during the same quarter last year and beating the Capital IQ consensus by $0.05 per share.  Revenue for the manufacturer of thermoplastic polymers slid 1.0% year over year to $1.64 billion, roughly in-line with analyst forecasts.

Looking forward, CE said it expects per-share earnings to continue growing during FY14 through new products and productivity improvement.  Celanese has expanded its polyacetal manufacturing footprint in Asia through investments in joint venture projects in Malaysia, Korea, and Saudi Arabia.  The company signed manufacturing agreements with Malaysia’s Polyplastics Asia Pacific Sdn. Bhd, Korea’s Korea Engineering Plastics, and Saudi Arabia’s Ibn Sina.

We think Celanese can generate above-average revenue growth from geographic expansion and the development of new applications for its products. Due to its size, CE also enjoys a cost advantage in many of its markets. We believe the engineered plastics business has solid long-term growth fundamentals, and that acetate tow remains a stable cash-generating business. Additionally, the European economy seems poised for gradual recovery in 2014.

We look for operating EPS to rise to $4.55 this year, from $3.80 in 2012. Further growth is expected in 2014, with EPS forecast to reach $5.20.   Based on a PE of 15, the 12 month target price is projected to be $78, an increase of 42% from current trading levels.  The Stock has an equity summary score of 8.6out of 10 for a Bullish outlook among analyst.

Celanese Corp. is a global producer of industrial chemicals and has the number  one or two market share in a majority of its products.  Celanese strives to focus its businesses in areas where it has a clear and sustainable competitive advantage to generate long-term earnings growth.  It also continually seeks to optimize its business portfolio to achieve industry, cost and technology leadership while expanding its product mix into higher value-added products. CE’s geographically balanced global footprint is another aspect of its strategy that should fuel future earnings growth, and its global presence is aligned with the current and expected growth of its customers.

The strong cash flow results allowed Celanese to more actively utilize their balance sheet, deploying$96 millionof cash in the quarter to purchase approximately 2 million shares.  Celanese also maintained a cash balance of$1.1 billionand net debt balance of less than$2.0 billion.

The company will cease all manufacturing operations and associated activities at the acetic anhydride plant in Roussillon and at the vinyl acetate monomer (VAM) unit in Tarragona by the end of 2013, and Celanese will proceed to decommission both facilities.

The need for these closure projects emerged from an assessment of Celanese’s overall corporate strategy, which included an assessment of the company’s global manufacturing facilities. Specifically, in support of the company’s acetyl portfolio, the manufacturing footprint strategy favors integrated production sites that provide critical economies of scale.  Celanese expects savings from these closures to be in the range of US $20-30 million in 2014.

Drive this Stock to 40% Gains while Increasing Dividends Each Quarter

Income investors should look at this stock for a growing dividend, increasing earnings per share and a 40% potential upside in stock price.  The Company has increased dividends for 11 straight quarters, increased EPS 21% in latest quarter and trades at a current price to sales ratio of 0.27.

Penske Automotive Group (NYSE: PAG), an international transportation services company, announced the highest third quarter and nine months income from continuing operations and related earnings per share in company history.   For the third quarter 2013, income from continuing operations attributable to common shareholders increased 21.0% to $66.0 million and related earnings per share increased 21.7% to $0.73 per share when compared to adjusted figures for the same period last year of $0.14 per share.

The big auto retailer logged a 12% jump in 3Q same-store sales, outpacing larger rival AutoNation (AN), and service-and-parts margins also rose strongly.  But average profit/car sold was essentially flat from a year ago for both new and used vehicles. Nonetheless, Sterne Agee says, “PAG’s luxury and import portfolio, concentration in the UK market (34% of revenue) and the company’s ability to improve cost accounted for the better-than-expected financial performance. We expect the positive trends to continue in 2014.”

On October 23, 2013 Penske increased its dividend by 6.3%.  Commenting on the dividend, Penske Automotive Group

President Robert H. Kurnick, Jr., said, “Our Board of Directors is pleased to offer our shareholders a 6.3% increase in the quarterly dividend to $0.17, demonstrating the continued confidence we have in the strength of the auto retail marketplace and in our ability to continue growing our business.”

Penske has increased dividend s for 11 straight quarters as the dividend paid in Q2 2011 was $0.07 per share.  Today (Q4 2013), the Company is paying $0.17 per share for this quarter.  This is an increase of 143% over a little more than 2 years.  Penske has a 5-year average annual dividend growth rate of 13%. The Company has a current dividend yield of 1.5%.

Penske is projected to have earnings of $2.73 per share in calendar year 2013.  The Company is projected to grow earnings by 15% to $3.15 in 2014.  Carmike is projected to increase EPS by another 10% to $3.45 in 2015.

The stock has an equity summary score of 7.9 out of 10 for a BULLISH outlook.  Thomson Reuters consensus has a buy rating of 2.3 on the stock.  Penske Auto Group (NYSE: PAG) has a 12-month price target of $63.00 which is an increase of 40% from the current trading level.

Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, is an international transportation services company, operating retail automotive dealerships, Hertz car rental franchises and commercial vehicle distribution. The company currently operates principally in the United States, Western Europe, Australia and New Zealand, employs approximately 17,000 people worldwide and is a member of the Fortune 500 and Russell 2000.

Order Some Special Dividends from these Stocks

Saratoga Investment Corp. (NYSE: SAR) declared a special dividend of $2.65 per share.  The dividend will be payable on December 27, 2013, to stockholders of record on November 13, 2013, with an ex-dividend date of November 8, 2013.  The annual yield on the dividend is 13.9 percent.

The dividend will be paid in cash or shares of the Company’s common stock at the election of the shareholders, although the total amount of cash to be distributed to all shareholders will be limited to approximately 20% of the total dividend to be paid to all shareholders. The remainder of the dividend (approximately 80%) will be paid in the form of shares of the Company’s common stock. This dividend is being made in accordance with certain applicable Treasury regulations and private letter rulings on cash/stock dividends issued by the IRS over the years that allow a publicly-traded regulated investment company to satisfy its distribution requirements from a distribution paid partly in common stock provided that at least 20% of the distribution is payable in cash and certain other requirements are satisfied. The dividend includes a carry-over balance of $3.9 million from the Company’s fiscal year 2013 taxable income and a significant portion of the Company’s fiscal year 2014 estimated taxable income.

Cohen & Steers, Inc. (NYSE: CNS) declared a special dividend of $1.00 per share. The dividend will be payable on December 20, 2013, to stockholders of record on December 2, 2013. The annual yield on the dividend is 2.6 percent.

Wynn Resorts Ltd (NASDAQ: WYNN) declared a special dividend of $3.00 per share.  The dividend will be payable on December 6, 2013, to stockholders of record on November 20, 2013, with an ex-dividend date of November 18, 2013.  The annual yield on the dividend is 1.8 percent.

This Company is Offering a 9.3% Special Dividend

Viad Corp (NYSE: VVI) announced that its Board of Directors declared a special cash dividend of $2.50 per share for shareholders of record at the close of business on November 7, payable on November 14.  This is a 9.3% dividend yield on this payout at current stock prices.

Its Board also expects to declare an additional special cash dividend of $1.50 per share, payable in January.

Analyst consensus has Viad growing EPS by 34% to $1.71 per share in 2014.  Based on this projected EPS, Viad has a 12-month price target of $30.00.  First Call has a strong buy recommendation on Viad Corp.

Viad Corp. is comprised of operating companies and a division which constitute a diversified services business. Most of Viad’s services are provided to businesses for use by their customers. Accordingly, the corporation markets its services through retail and financial locations, primarily in the U.S., to numerous trade show organizers and exhibitors, and others.

Viad Corp announced third quarter 2013 income from continuing operations of $10.8 million, or $0.53 per diluted share.  Viad’s income before other items of $14.1 million, or $0.69 per diluted share, excludes restructuring charges of $0.02 per diluted share and non-cash impairment charges of $0.14 per diluted share. This compares to the company’s prior guidance of income before other items in the range of $0.54 to $0.64 per share and 2012 third quarter income before other items of $1.01 per share. The expected decline from 2012 was driven primarily by negative show rotation in the Marketing & Events Group.

  • Revenue was $236.5 million as compared to $307.5 million in 2012.
  • Segment operating income was $24.6 million as compared to $34.2 million in 2012.
  • Free cash flow was $21.8 million as compared to $45.2 million in 2012.
  • Cash and cash equivalents were $120.1 million at September 30, 2013.
  • Debt was $1.7 million, with a debt-to-capital ratio of 0.4% at September 30, 2013.

Pfizer offers a Total Yield Stock Play with an Increasing Dividend Payout

While income investors constantly seek out stocks with growing dividend yields, they can also benefit from share buybacks.  The share buybacks present an opportunity for investors to get capital gains in addition to current income.  Currently, 80% of S&P 500 companies are buying back shares. Combine this with dividend yield and you can get a total yield of greater than 10% in 2014.  We are presenting a series of stocks worth a look.

Pfizer (PFE) has a projected share buyback yield of 14% and a current dividend yield of 3.49%.  This provides investor a potential for a total yield of 18.2%.  The stock has a 12 month price target of $33.

Investors were pleased to hear that the company intends to increase its dividend payout ratio to 40% (from 33%) by the end of 2013. The company returned about $15 billion to shareholders in the form of dividends and share buybacks in 2012. Pfizer intends to use the proceeds from the sale of the Nutrition business on additional share repurchases and other value creating opportunities.

On 7/30/2013, the Board of Directors authorized a new$10 billion share repurchase program to be utilized over time. This new program is in addition to the$3.1 billion of authorization currently remaining under the previous share repurchase program.

Pfizer posted second quarter 2013 earnings of $0.56 per share, 5% below the year-ago earnings. Revenues, which fell 7% to $12.9 billion, missed the Consensus Estimate of $13.1 billion. Revenue growth was impacted by the loss of exclusivity of certain products and purchasing patterns for Prevnar/Prevenar in some markets.  Pfizer maintained its outlook for 2013. Revenues will be hit by genericization and the expiration of a few co-promotion agreements. The company s pipeline needs to deliver given the Lipitor loss of exclusivity and the upcoming loss of exclusivity on additional products in the next few years.

We expect revenues in 2013 to decline about 12%, primarily reflecting the classification of the animal health business (divested in June 2013) as a discontinued operation. We also project lower sales of established drugs, largely due to ongoing generic erosion in off-patent Lipitor, Detrol and Xalatan, as well as the expiration of certain co-promotion agreements.  However, we project continued gains in Lyrica muscle pain therapy and Celebrex arthritis treatment. We also forecast good growth from emerging markets, new oncology agents such as Xalkori and Inlyta, and from the recent launches of Xeljanz and Eliquis.

In July 2013, PFE announced plans to internally separate into three distinct business segments, two innovative units and one value business.  The first innovative unit will comprise drugs with patent exclusivities beyond 2015. The second innovative segment will include vaccines, oncology agents, and consumer healthcare.  The third value unit will consist of mature drugs, and joint venture products. We believe the new structure should provide investors greater transparency of PFE’s different businesses, and represents a prelude for a potential eventual split-up of Pfizer into three separate firms.

Look at Pentair as a Total Yield Stock Play

While income investors constantly seek out stocks with growing dividend yields, they can also benefit from share buybacks.  The share buybacks present an opportunity for investors to get capital gains in addition to current income.  Currently, 80% of S&P 500 companies are buying back shares. Combine this with dividend yield and you can get a total yield of greater than 10% in 2014.  We are presenting a series of stocks worth a look.

Pentair (PNR) has a projected share buyback yield of 22% and a current dividend yield of 1.47%.  This provides investor a potential for a total yield of 23.47%.  The stock has a 12 month price target of $70.

Pentair Ltd. recently announced that it will pay a regular quarterly cash dividend of $0.25 per share on November 8, 2013 to shareholders of record at the close of business on October 25, 2013. Pentair had previously announced on April 29, 2013 the approval by its shareholders of an ordinary cash dividend of $1.00 per share to be paid out of Pentair’s capital contribution reserve in four equal quarterly installments of $0.25 in each of the third and fourth quarters of 2013 and the first and second quarters of 2014. Pentair has increased its dividend for 37 consecutive years.

Pentair paid dividends totaling $0.88 per share in 2012. Pentair paid dividends of $0.23 per share in each of the first and second quarters of 2013 and $0.25 per share in the third quarter of 2013.

Pentair (PNR) is a global diversified industrial company, which makes and markets water and flow control devices and electrical and electronic enclosures, recently doubled in size after merging with Tyco’s flow control unit.

We project close to 3% organic sales growth in 2013, driven by the water & fluid solutions segment and, to a lesser extent, valves & controls, while technical solutions remains soft. We see favorable trends continuing in global energy (oil & gas and mining), food & beverage and North American residential, with more modest growth in emerging regions. PNR should benefit globally from its expanded distribution via its merger with the Tyco Flow Control unit. We still see headwinds in Western Europe.

We expect gross margins to expand by at least 0.5% in 2013 to above 33%, on supply chain and repositioning cost savings, and a more favorable mix, while commodity input costs remain generally stable. We see adjusted EBITDA margins widening by more than 160 basis points to near 16.5% in 2013, reflecting volume leverage and improved productivity, and $105 million in cost synergies.

Oaktree has Record Earnings and a Double-Digit Dividend Yield

Following 2013 results that represent record highs for any quarter or six-month period in the Company’s history, Oaktree Capital Group, LLC (OAK) is an income investment for both growth and high income.  The stock just recorded a 63% increase in revenues and has a current dividend yield of 11.1%.  In this case, it is better to buy the stock of Oaktree Capital than to buy the closed-end funds it operates.

Oaktree Capital is a leading global investment management firm focused on alternative markets, with $76.4 billion in assets under management as of June 30, 2013.  The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities.

In the second quarter of 2013, adjusted net income rose $131.5 million, to $297.0 million from $165.5 million in the second quarter of 2012, on a $214.0 million increase in total segment revenues. The 63% growth in revenues, to $555.1 million from $341.1 million, reflected a 162% gain in incentive income, to $338.1 million from$129.0 million, and a 49% increase in investment income, to $34.6 million from $23.2 million.

Driven by $4.7 billion of distributions to investors in closed-end funds, incentive income arose from funds in distressed debt, real estate and control investing strategies, and included $272.5 million from OCM Opportunities Fund.

Adjusted net income increased to $632.7 million for the six months ended June 30, 2013 from $339.1 million for the six months ended June 30, 2012, on a 74% rise in total segment revenues, to $1.1 billion.

Distributable earnings grew to $313.2 million in the second quarter of 2013 from $176.4 million in the second quarter of 2012, on higher incentive income and investment income proceeds.  For the six-month period, distributable earnings rose to $608.2 million in 2013 from $313.7 million in 2012. The 2013 results represented record highs for any quarter or six-month period in the Company’s history.

The stock still trades at a very reasonable valuation with the stock at a current PE of 9.45 and a price to sales ratio of 0.65.

More Special Dividends this Week

Primus Telecommunications Group, Incorporated (PTGI), a leading international wholesale service provider to fixed and mobile network operators worldwide, announced today that its Board of Directors has approved a special cash dividend of $8.50 per share on all issued and outstanding PTGi common stock. The special cash dividend will be paid on August 27, 2013 to holders of record of PTGi common stock as of August 20, 2013.

The dividend creates a current yield of 70%.  The special dividend comes after disappointing earnings.

PTGI shares are down market trading as it reports Q1 revenue of $51.3 million, down from $59.8 million a year prior. Net loss was $3.2 million, or $0.23 per share, compared to $6.9 million, or $0.50 per share.

I would PASS on the PTGI special dividend based on the poor EPS report.

Nature’s Sunshine Products, Inc. (NATR), a leading natural health and wellness company engaged in the manufacture and direct selling of nutritional and personal care products, today reported its consolidated financial results for the second quarter, and declared a special one-time cash dividend of $1.50 per share, a regular quarterly cash dividend of $0.10 per share and a $10 million share repurchase program.

The combined $1.60 in dividends creates a current yield of 8.55%.  The dividend is payable on August 29, 2013 to shareholders of record as of the close of business on August 19, 2013. The amount of the cash dividends is expected to be approximately $25.6 million. In addition, the Board of Directors authorized a $10 million share repurchase program to be implemented over two years.

The special one-time cash dividend and share repurchase program is due to the Company’s strong cash flow and its record high quarter-end cash balance of $87.3 million, and the Board’s commitment to return capital to shareholders and its confidence in the long-term growth prospects of the Company’s business.

The stock trades at a PE ratio of 14 and a price to sales ratio of 0.78.

NATR has an equity summary score of 7.4 out of 10 for a Bullish outlook.

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