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Investing/Strategies / Retirement Investing
|Subject: Re: income generating strategies help||Date: 1/9/2010 4:25 PM|
|Author: Justrynamakabuck||Number: 66631 of 75383|
I'm new to this board and I've been reading some very interesting posts. I am soon to be retired and have been paying a lot more attention to dividends. I hope this thread isn't dead because I have some suggestions and a couple of questions that Fools might be able to help with.
Among the safer dividend playing stocks with well over 4% yield are AT&T and Verizon--both in the 6% range. There are a number of other utilities that pay high dividends, but the telecoms seem to have consistently high pay-outs. Also, the tobacco companies--check out Altria (MO).
Question: My son has long been an ardent viewer of WWE wrestling, so to get him interested in investing I bought some stock years ago. Lately, I've gotten more into investing for income (pending retirement, etc.), and the big yield caught my eye. WWE pays around 9% at current valuation. It looks very inviting, but when I look at the balance sheet I see annual income in the 70-80 cents/share range, while the company is paying out $1.44, and they have been doing that for several years. What am I missing? How can a company keep paying out double their annual income in dividends? Despite the somewhat shady business they're in, this is company has a strong business model, a loyal group of supporter, and they have been profitably expanding into overseas markets. Still, I can't get a handle on the high payout ratio, and that worries me.
Has anyone considered Canadian stocks, particularly utilities? I have been folllowing them for several years, even before the Halloween massacre of 2006 when the government declared that the preferred tax status of the Income Trusts would be eliminated by 2011. Many of the companies have converted to regular corporations over the past few years, and some of them are still paying handsome dividends (high single digits), while others are in the process of conversion and the post-conversion picture looks promising.
One warning about MLPs: I've been into EPD for several years, and I've found it to be a great investment--7-8% dividend. The catch is in the tax reporting. I do my own taxes with the help of Turbotax, so I get through, but the reporting is somewhat onerous. Also, MLPs should be owned in taxable accounts, since the benefit of their tax shelter would be lost in IRAs.
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