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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8891  
Subject: Dividends and the cliff Date: 11/30/2012 12:45 PM
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Four reasons dividends won't fall off 'fiscal cliff'

http://www.reuters.com/article/2012/11/30/us-column-wasik-di...

To sumarize:

Interest rates available elsewhere are scant. Regardless of tax rates, dividend stocks almost always out perform non-dividend players.

The best dividend stocks increase their dividend payments over time.

Dividends provide a cushion. Dividend paying stocks are better to own in a low-yield, slow-growth environment.

Total return matters.
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Author: gdett2 Big gold star, 5000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7699 of 8891
Subject: Re: Dividends and the cliff Date: 11/30/2012 4:45 PM
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kelbon,

Just to give you an opposite view, here is an article from seeking alpha that extolls the worthlessness of dividends and how they do not add to your net worth (WHAT??????) Yes, that what this author states! LOL

The dividend itself is meaningless to your net worth, or even possibly detrimental if we take taxes into account, but let's not open that can of worms. If you want, or need, the cash flow that dividends provide, I'm not saying there's anything wrong with that. I'm just pointing out that dividends play no part in your profitability, and I hope that understanding this makes you a more informed investor.

Full article:

http://seekingalpha.com/article/981821-beware-the-false-god-...

I guess I just don't know anything about investing since I am dumb enough to buy dividend paying stocks. ;-)

Gene

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Author: stillwater9999 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7700 of 8891
Subject: Re: Dividends and the cliff Date: 11/30/2012 5:43 PM
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On these matters and many others always good to have some perspective. This announcement from one of my portfolio companies (McCormick) made that point with me:

The Board of Directors of McCormick & Company, Incorporated (MKC) today declared an increase in the quarterly dividend from $0.31 to $0.34 per share on its common stocks, payable January 14, 2013 to shareholders of record December 31, 2012. This marks the 27th consecutive year that the Company has increased its quarterly dividend.

Alan D. Wilson, Chairman, President & CEO, said, "Each year since 1925, McCormick shareholders have participated in the Company's success through dividend payments. We are delivering high performance and in the past decade, have increased the dividend at a 12% compound annual growth rate."

I am planning to hold this stock for quite awhile (even though it is not cheap at the moment), and would add on any significant pullbacks.
If I hold it another 20 years, I am sure I will see many different political administrations, tax policies etc. , but I am pretty confident it will be a fine investment if the long term dividend policy remains.

sw

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7701 of 8891
Subject: Re: Dividends and the cliff Date: 11/30/2012 6:04 PM
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SeekingAlfa is culpable of enabling anyone who wants to be an expert to pose as one. "Sure, think you're an expert, hop on over here and we'll dress you up as one and get some revenue from the ads. on our oh so professional and accredited looking web pages. (Snigger, snigger, all the way to the bank.) No, really it's getting to be that way.

I'm afraid the poor dear (expert) author of the article is a bit confused. He's a man with a hammer who thinks all dividends are nails.

Trouble is, some are. This is where his confusion lies. All dividends are not created equal. The author's condemnation of dividends would be better served as a warning to those who seek out-sized dividends thinking they are necessarily getting a good deal.

If you buy stock in a company that pays a very large dividend, all the while depleting its resources and running down the company, likely the stock price will go down and your net worth, if your have all your eggs in one basket, along with it.

However, if you buy a good company's stock that increases its earnings and book value over time raising dividend payments all the while, then your net worth will likely increase. Think Coca-Cola, for example.

The author is right in noting that when a company pays a special out-sized dividend, after it has been paid, the stock price often proportionally falls. This is why I'm generally not a fan of this practice, regardless of proverbial looming fiscal cliffs. "Thanks a lot buddy, I didn't want the dividend and now I have to pay taxes on it!" I'd rather see a higher stock price and choose when I want to cash in, if at all. Moving up a regularly scheduled dividend before the end of the year because of a possible tax increase on January 1 is a different story.

But, if you do buy the authors line, I can help: "The dividend itself is meaningless to your net worth, or even possibly detrimental if we take taxes into account, so just sign them over to me and you won't have to worry about anything; here's my mailing address…"

kelbon

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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7702 of 8891
Subject: Re: Dividends and the cliff Date: 11/30/2012 7:15 PM
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The best dividend stocks increase their dividend payments over time.

The DRiP Investing Resource Center
U.S. Dividend Champions
U.S. Companies with 25+ Straight Years Higher Dividends
Excel Spreadsheet & PDF Format Updated Monthly

http://dripinvesting.org/Tools/Tools.asp

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