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Stocks Increasing Dividends to Buy Now

As the earnings season continues to look good, many dividend stalwarts are increasing their annual dividend payouts.  There are many companies increasing dividends but not all are stocks to buy.  I  used the equity summary score, a consensus of financial analysts at different firms, to determine that these stocks are rated Bullish or better.  For investors seeking dividend income, these stocks make great additions to your portfolio.

Coach (COH) dressed up shareholders with a 33% increase in its quarterly payout to 40 cents per share.  The new dividend will start being paid in July. The new dividend yield is 2.16%.  The luxury handbag, accessories and leather-goods maker has seen its profit grow for over two years on the strength of its North American direct-to-consumer businesses and global expansion. The company also is broadening its men’s business with more male-oriented products and by opening men’s stores in the U.S. and Japan.  COH has an equity summary score of 9.7 out of 10 for a Very Bullish outlook.

International Business Machines (IBM) reprogrammed its dividend with a 13% increase to 85 cents per share. The new payout will be coded on June 9 to shareholders of record as of May 10. The new dividend yield is 1.64%. This is the 17th straight year that IBM has increased its quarterly dividend, and the ninth year in a row of double-digit-percent increases.  IBM also authorized an additional$7 billion to buy back shares as the company looks to return more of its rising cash levels to shareholders.  IBM has an equity summary score of 9.7 out of 10 for a Very Bullish outlook.

Exxon Mobil (XOM) delivered a 21.2% boost in its quarterly dividend payment to 57 cents per share. The new payout will be made on June 11 to shareholders of record as of May 14. The new dividend yield is 2.65%. If Exxon Mobil’s CEO stays true to his word…and keeps the yield competitive, there should be further dividend increases before next year.  The company has increased its annual dividend every year for the past 30 years.  XOM has an equity summary score of 9.6 out of 10 for a Very Bullish outlook.

Chevron Corporation (CVX) engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream.  CVX unearthed an 11.1% increase in its quarterly dividend to 90 cents per share. The new dividend will start being paid in June.  The new dividend yield is 3.39%. CVX has a significant amount of cash in its balance sheet –$18.9 billion at the end of first quarter.  The company also announced it purchased $1.25 billion of its common stock in the first quarter 2012 under its share repurchase program.  CVX has an equity summary score of 9.4 out of 10 for a Very Bullish outlook.

Johnson & Johnson (JNJ) put a Band-Aid on its quarterly payout, increasing its dividend 7% to 61 cents per share. The new payout will be made on June 12 to shareholders of record as of May 29. The new dividend yield is 3.76%.  This is the 50th straight year the health-care products giant has decided to raise its payout to shareholders.  JNJ recently reported a higher first-quarter profit due to a foreign-exchange- related gain and lower expenses, though the currency impacts also weighed on sales.  JNJ has an equity summary score of 8.4 out of 10 for a Bullish outlook.

Bershire Hathaway Portfolio Update

As of 12/31/2011, Berkshire Hathaway (BRK.B) owns 34 stocks with a total value of $66.2 billion.  The classic value investor Warren Buffett made a number of stock moves during the 4th quarter of 2011.  These are the details of the buys and sells.

Added: CVS Caremark Corp. (CVS)

Warren Buffett added to his holdings in CVS Caremark Corp. by 25.53%. His purchase prices were between $32.97 and $41.16, with an estimated average price of $37.2. The impact to his portfolio due to this purchase was 0.09%. His holdings were 7,106,500 shares as of 12/31/2011.

Added: Intel Corp. (INTC)

Warren Buffett added to his holdings in Intel Corp. by 23.17%. His purchase prices were between $20.62 and $25.66, with an estimated average price of $23.87. The impact to his portfolio due to this purchase was 0.08%. His holdings were 11,495,000 shares as of 12/31/2011.

New Purchase: Davita Inc. (DVA)

Warren Buffett initiated holdings in Davita Inc. (DVA). His purchase prices were between $60.64 and $76.81, with an estimated average price of $71.05. The
impact to his portfolio due to this purchase was 0.31%. His holdings were 2,684,500 shares as of 12/31/2011.

New Purchase: Liberty Media Corp. Liberty Cap (LMCA)

Warren Buffett initiated holdings in Liberty Media Corp. Liberty Cap. His purchase prices were between $61.11 and $79.67, with an estimated average price of
$46.2. The impact to his portfolio due to this purchase was 0.2%. His holdings were 1,701,400 shares as of 12/31/2011.

Added: International Business Machines Corp (IBM)

Warren Buffett added to his holdings in International Business Machines Corp by 11.43%. His purchase prices were between $173.29 and $194.56, with an estimated average price of $184.45. The impact to his portfolio due to this purchase was 1.83%. His holdings were 63,905,931 shares as of 12/31/2011.

Added: The Directv Group Inc. (DTV)

Warren Buffett added to his holdings in The Directv Group Inc. by 378.85%. His purchase prices were between $40.6 and $47.87, with an estimated average price of $45.35. The impact to his portfolio due to this purchase was 1.03%. His holdings were 20,348,400 shares as of 12/31/2011.

Added: Wells Fargo & Company (WFC)

Warren Buffett added to his holdings in Wells Fargo & Company by 6.18%. His purchase prices were between $23.18 and $27.785, with an estimated average
price of $25.68. The impact to his portfolio due to this purchase was 0.93%. His holdings were 383,703,628 shares as of 12/31/2011.

Added: Visa Inc (V)

Warren Buffett added to his holdings in Visa Inc by 25.02%. His purchase prices were between $84.26 and $103.15, with an estimated average price of $93.81. The impact to his portfolio due to this purchase was 0.09%. His holdings were 2,865,008 shares as of 12/31/2011.

Added: General Dynamics Corp. (GD)

Warren Buffett added to his holdings in General Dynamics Corp. by 26.52%. His purchase prices were between $55.67 and $66.92, with an estimated average price of $63.53. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,877,122 shares as of 12/31/2011.

Added: Verisk Analytics Inc. (VRSK)

Warren Buffett added to his holdings in Verisk Analytics Inc. by 63.96%. His purchase prices were between $33.06 and $40.13, with an estimated average price of $36.75. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,445,029 shares as of 12/31/2011.

Reduced: Johnson & Johnson (JNJ)

Warren Buffett reduced to his holdings in Johnson & Johnson by 22.51%. His sale prices were between $61.27 and $66.02, with an estimated average price of
$63.97. The impact to his portfolio due to this sale was -0.91%. Warren Buffett still held 29,018,127 shares as of 12/31/2011.

Sold Out: Exxon Mobil Corp. (XOM)

Warren Buffett sold out his holdings in Exxon Mobil Corp.. His sale prices were between $71.15 and $85.28, with an estimated average price of $78.88.

List of Covered Call Trades for September 2011

 After two weeks of uncertainty and high volatility equities look as if they have found a short-term bottom.  For covered call traders, there are so many ideas available but the market still is not as stable as we would like it to be.   All of the improvement after Tuesday’s  reversal could be unwound if there is more negative news from Europe.  Our colleagues in Europe reminds us Italy is a huge debt problem and  since the European banks will need to raise capital, they will tighten lending,  especially interbank lending which may create liquidity issues.
As for last week’s volatility in the equity  markets, here is an appropriate quote from Samuel Brittan in last Thursdays  Financial Times. “The stock exchange always has been and always will be a  mixture of investment appraisal and sheer gambling.”  With this thought in mind, we still need to exercise caution with covered call trades.  The list below is primarily conservative stock trades with Coke, Exxon, Altria and General Mills.  The covered call trades will create monthly income while these stocks have nice dividend yields to add some income.
Covered Call Trades

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The Coca-Cola Company (KO) is a non-alcoholic beverage company. The Company owns
or licenses and markets more than 500 non-alcoholic beverage brands, primarily
sparkling beverages but also a variety of still beverages such as waters,
enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and
energy and sports drinks. It also owns and markets non-alcoholic sparkling
beverage brands, including Diet Coke, Fanta and Sprite. It manufactures, markets
and sells, beverage concentrates, referred to as beverage bases, and syrups,
including fountain syrups (the concentrate business or concentrate operations),
and finished sparkling and still beverages (finished products business or
finished products operations).It operates in six segments: Eurasia and Africa,
Europe, Latin America, North America, Pacific, Bottling Investments and
Corporate. On October 2, 2010, it acquired the North American business of
Coca-Cola Enterprises Inc. (CCE).
Exxon Mobil Corporation (XOM) is a manufacturer and marketer of
commodity petrochemicals, including olefins, aromatics, polyethylene and
polypropylene plastics and a range of specialty products. It also has interests
in electric power generation facilities. It has many divisions and hundreds of
affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions
and affiliated companies of ExxonMobil operate or market products in the United
States and other countries of the world. Their principal business is energy,
involving exploration for, and production of, crude oil and natural gas,
manufacture of petroleum products and transportation and sale of crude oil,
natural gas and petroleum products. On June 25, 2010, it acquired XTO Energy
Inc. by merging a wholly owned subsidiary of ExxonMobil with and into XTO. In
October 2010, Global Partners LP acquired retail gasoline stations from Exxon
Mobil. In June 2011, the Company acquired Phillips Resources.
CVS Caremark Corporation (CVS) is a pharmacy healthcare provider
in the United States. It provides pharmacy services through its pharmacy benefit
management (PBM) mail order and specialty pharmacy division, Caremark Pharmacy
Services; approximately 7,000 CVS/pharmacy retail stores; retail-based health
clinic subsidiary, MinuteClinic, and through its online pharmacy, CVS.com. It
has three segments: Pharmacy Services, Retail Pharmacy and Corporate. The
Pharmacy Services segment provides a range of pharmacy benefit management (PBM)
services, including mail order pharmacy services, specialty pharmacy services,
plan design and administration, formulary management and claims processing. As
of December 31, 2010, the Pharmacy Services segment operated 44 retail specialty
pharmacy stores. As of December 31, 2010, its Retail Pharmacy segment included
7,182 retail drugstores, of which 7,123 operated a pharmacy, which is its
CVS.com, and retail health care clinics.
Mylan Inc. and its subsidiaries (MYL) is a generic and specialty
pharmaceutical company, which provides products to customers in more than 150
countries and territories. The Company operates in two segments: Generics and
Specialty. Mylan is a fully-integrated global pharmaceutical company that
develops, licenses, manufactures, markets and distributes generic and branded
generic pharmaceuticals, specialty pharmaceuticals and active pharmaceutical
ingredients (API). In September 2010, Mylan completed the acquisition of 100% of
the outstanding equity in Bioniche Pharma Holdings Limited (Bioniche Pharma).
The United States sales are derived through the wholly owned subsidiary Mylan
Pharmaceuticals Inc. (MPI), its primary United States pharmaceutical research,
development, manufacturing, marketing and distribution subsidiary, as well as
through Mylan Institutional. Mylan Institutional. The specialty pharmaceutical
business is conducted through Dey Pharma, L.P.
General Mills, Inc. (GIS), is a global manufacturer and marketer
of consumer foods sold through retail stores. The Company is also a supplier of
branded and unbranded food products to the foodservice and commercial baking
industries. General Mills manufactures its products in 15 countries and markets
them in more than 100 countries. The Company’s businesses are organized into
three operating segments: U.S. Retail, International, and Bakeries and
Foodservice. Its product categories in the United States include ready-to-eat
cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and
frozen vegetables, refrigerated and frozen dough products, dessert and baking
mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a
variety of organic products including soup, granola bars, and cereal. In July
2011, it acquired 51% controlling interest in Yoplait S.A.S.
Altria Group, Inc. (MO) is a holding company. As of December 31, 2010, Altria
Group, Inc.’s wholly owned subsidiaries included Philip Morris USA Inc. (PM
USA), which is engaged in the manufacture and sale of cigarettes and certain
smokeless products in the United States; UST LLC (UST), which through its
subsidiaries, is engaged in the manufacture and sale of smokeless products and
wine, and John Middleton Co. (Middleton), which is engaged in the manufacture
and sale of machine-made large cigars and pipe tobacco. Philip Morris Capital
Corporation (PMCC), another wholly owned subsidiary of Altria Group, Inc.,
maintains a portfolio of leveraged and direct finance leases. As of December 31,
2010, in addition, Altria Group, Inc. held a 27.1% economic and voting interest
in SABMiller plc (SABMiller). As of December 31, 2010, Altria Group, Inc.’s
segments included cigarettes, smokeless products, cigars, wine and financial
services.

4 Stocks with AAA Ratings

Rating agencies — S&P, Moody’s and Fitch — analyze risk and give debt a “grade” that reflects the borrower’s ability to pay the underlying loans.  The safest bets are stamped AAA.  That’s where U.S. debt has stood for years. Moody’s first assigned the United States a AAA rating in 1917.  The country’s new S&P rating is AA+ — still strong, but not the highest.

There are currently four U.S. companies that have a better credit rating than their own country, according to Standard & Poor’s: Automatic Data Processing, Exxon Mobil, Johnson & Johnson, and Microsoft.

For Exxon, J&J and Microsoft, S&P reaffirmed their AAA ratings recently, saying that “given the global and diverse business lines and significant financial strength” of the companies, “we expect the borrower to continue to fulfill its financial obligations, even in a sovereign default scenario.” S&P said the same of ADP, even though most of its customers are U.S.-based.

Depending on your trust in the rating agencies, the four horsemen (JNJ, ADP, MSFT, & XOM) are financially strong and have the ability to cover their debt.  These four companies are non-financials so the U.S. debt downgrades will not affect their ability to cover debt.

Of course, the real kicker is that these stocks all pay a dividend and frequently raise their dividends each year.  These stocks may be long-term holding to sell calls on each monthly for monthly income while also collecting the dividend.  If they get called away, then pick a new entry point and sell cash-covered puts to buy the stock.  This is the rinse and repeat trading philosophy.

For more on this topic: CNNMoney

 

List of Calendar Spread Trades for August 2011

Below is a list of potential calendar call spreads for further evaluation.  There is an option to purchase shown in the buy side column.  These options are the January 2012 call options.  The sell side column shows the option to sell in the August 2011 listing for each stock.  All other metrics are based on the previous closing price and current option pricing.  These will change depending on the market prices of each stock.  You should watch for earnings releases and actively manage these trades.

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Exxon Mobil Corporation (XOM) is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It also has interests in electric power generation facilities. It has many divisions and hundreds of affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and other countries of the world. Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. On June 25, 2010, it acquired XTO Energy Inc. by merging a wholly owned subsidiary of ExxonMobil with and into XTO. In October 2010, Global Partners LP acquired retail gasoline stations from Exxon Mobil. In June 2011, the Company acquired Phillips Resources.
Philip Morris International Inc. (PM) is a holding company. PMI, through its subsidiaries and affiliates and their licensees, is engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America. As of December 31, 2010, its products were sold in approximately 180 countries. Its portfolio comprises both international and local brands, which include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris and Red & White. PMI also owns a number of local brands, such as Sampoerna A, Dji Sam Soe and Sampoerna Hijau in Indonesia, Fortune, Champion and Hope in the Philippines, Diana in Italy, Optima and Apollo-Soyuz in Russia, Morven Gold in Pakistan, Boston in Colombia, Belmont, Canadian Classics and Number 7 in Canada, Best and Classic in Serbia, f6 in Germany, Delicados in Mexico, Assos in Greece and Petra in the Czech Republic and Slovakia.
General Motors Company (GM) is a global automotive company. It develops, produces and markets cars, trucks and parts worldwide. GM also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial), formerly AmeriCredit Corp. (AmeriCredit). These financing operations consist principally of financing automobile purchases and leases for retail customers. The Company operates in five segments: GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and GM Financial. GM Financial is an automotive finance company. GM Financial purchases automobile finance contracts for new and used vehicles purchased by consumers primarily from franchised and select independent dealerships. On October 1, 2010, GM completed the acquisition of GM Financial. In February 2010, GM completed the sale of Saab Automobile AB (Saab). In May 2010, the Company completed the sale of Saab Automobile GB (Saab GB).
Oracle Corporation (ORCL) is an enterprise software company. The Company develops, manufactures, markets, distributes and services database and middleware software, applications software and hardware systems, consisting primarily of computer server and storage products. It operates in three segments: software, hardware systems and services. Its software business is consisted of two operating segments: new software licenses and software license updates and product support. Its hardware systems business consists of two operating segments: hardware systems products and hardware systems support. Its services business is consisted of three operating segments: consulting, On Demand and education. In January 2010, the Company acquired Sun Microsystems, Inc. and Silver Creek Systems, Inc. In January 2011, the Company completed the acquisition of Art Technology Group (ATG), Inc.
General Mills, Inc. (GIS) is a global manufacturer and marketer of consumer foods sold through retail stores. The Company is also a supplier of food products to the foodservice and commercial baking industries. General Mills manufactures its products in 15 countries and markets them in more than 100 countries. The Company’s joint ventures manufacture and market products in more than 130 countries and republics worldwide. The Company’s businesses are organized into three operating segments: U.S. Retail, International, and Bakeries and Foodservice. The Company sells ready-to-eat cereals, through its Cereal Partners Worldwide (CPW) joint venture. The Company’s primary customers include grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants and convenience stores. In July 2011, it acquired 51% controlling interest in Yoplait S.A.S.
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