Annaly Capital (NLY) Does Not Boost Dividend In 3rd Quarter

For the first time in 5 years Annaly Capital did not increase its dividend during Q3 distributions. While each quarter represents a different distribution amount for the company this is the first time we have seen the 3rd distribution of the year match the 2nd.

Dividend Fundamentals

NLY announced today that the company will pay a quarterly dividend of $.55 per share on July 26th with an ex-dividend date of June 27th. This gives the REIT a dividend yield of 13.1% which right on par with its 5 year yield average. The company has a 5 year dividend growth rate of 35% and a 3 year dividend growth rate of 5%. Because the company is a REIT we are not concerned with its high payout ratio.

About Annaly Capital

NLY is down 8% in the last 12 months and has a market cap of 16.5B. The company operates as a REIT manages and invests in a portfolio of real estate investments. NLY and other REITs can be found on our high yield REIT list.

Clorox Boosts Dividend Again After 35 Consecutive Years

Clorox (CLX) announced a quarterly dividend of $0.64 per share that will be payable on August 10th, 2012. The new annual dividend will be $2.56 per year which gives Clorox a dividend yield of 3.82%. This boost in the annual dividends is right on schedule with previous increases from Clorox and positions the company well to add to their 35 consecutive years of increasing the dividend.

The new annual dividend of $2.56 per share is almost 7% higher than the trailing 12 month dividend of $2.4 per share.

Clorox announced that the dividend will be payable to stockholders of record on July 25, 2012, with an ex-dividend date of July 23, 2012. Investors must own the stock on the day before the ex-dividend date to qualify for the dividend.

Dividend Fundamentals

Clorox has solid dividend fundamentals. The new 3.82% dividend yield is above its 5 year yield average of 3.2%. The company has a payout ratio of 60% and a free cash flow yield of 4.77% which makes us believe the dividend is very safe. Clorox has a 3 year net income growth rate of 6.5% and a 3 year dividend growth rate of 8.7%. Add the 35 years of consecutive dividend increases and its easy to see why Clorox is ranked #22 on our top 100 dividend list. This timely increase will help Clorox maintain its DSO rating but in order for it to improve its rank the company will need to grow net income at a faster rate. This will help help boost its dividend yield and maintain a low payout ratio.

About The Company

Clorox manufactures and distributes consumer goods products through multiple distribution chains that include grocery stores and retail outlets. The stock is down 2.6% in the last 12 months but is up 4.8% in the last 6 months (excluding dividend payouts). The company has a P/E ratio of 17 and a market cap of $9B. Some of the companies largest competitors include Colgate-Palmolive Co. (CL) and Proctor and Gamble (PG)

For more information on consumer goods dividend stocks view our list here.

A Different Way To Look At Dividend Yields – Infographic

Dividend data gets a little dry sometimes so we created this infographic to show how dividend-paying stocks fit into the market. This image is also available on our high dividend yield page.

There are over 4600 stocks that trade on the NYSE and Nasdaq exchanges. Here is how the numbers break down:

  • 2030 pay a dividend
  • 780 have a yield over 3%
  • 370 have a yield over 5%
  • 960 have a positive 5 year dividend growth rate
  • 550 have a 5 year dividend growth rate over 7%
  • 55 have a postive 12 month return, dividend yield over 2%, payout ratio under 65, Net income growth rate over 5% and a 5 year dividend growth rate over 7%.

Before You Invest: 3 Questions to Ask Yourself

As you know, one of the best ways to build wealth over time is to invest. Investing part of your money can help you put the power of compound interest to work for you in a way that helps you better secure your financial futures.

However, investing isn’t about just putting your money into some asset and then hoping it grows. Before you invest, here are 3 questions to ask yourself:

1. What Do You Hope to Accomplish?

It’s important to understand your own goals, and know what you hope to accomplish. A good investing strategy will help you reach your goals. Without a plan for your resources, there is a good chance you won’t accumulate as much as you would like over time. Before you invest, sit down and consider your goals. Know what you want to accomplish, and you will have a better idea of how to allocate your assets in order to stand a better chance of reaching your goals.

2. Do You Know What You’re Investing In?

One of the pieces of counsel that Warren Buffett gives about financing is to understand what you are investing in. Before you put your money into something, you should know how it works. Understand how stocks work before you buy a stock. Know what is likely to make bond yields rise and fall. Understand what an index fund is. Before you put your money into something, you should have an idea of what the investment is, and what influences it. You shouldn’t invest in things you don’t understand.

3. Are You Willing to Stay Involved?

Finally, you need to be willing to stay involved. This doesn’t mean that you have to check your portfolio every day and worry about daily price movements. However, you do need to be somewhat involved in your portfolio. You need to make regular contributions to your investment portfolio. Decide on an amount of money that you are comfortable with, and contribute that each month.

You should also periodically rebalance your portfolio. You want to make sure that you are on track. For portfolios that need less active management, considering your situation twice a year is usually enough. Others like to evaluate once a month. Figure out what is appropriate for your portfolio, and the regularly check the situation. You might need to shift your asset allocation, or sell an investment that no longer helps you reach your goal. Even in a “buy and hold” portfolio, you need to show some interest and regular involvement.

What Is Inflation and How To Beat It

One of the concepts that you need to understand if you want to enjoy a successful financial future is that of inflation. Inflation is a mostly-silent budget buster. You may not always notice it in the short-term, but in the long-term, inflation can reduce your real wealth and affect your ability to retire in comfort.

What is Inflation?

Simply put, inflation is a reduction in your spending power. It is represented by a drop in the value of the dollar via a rise in prices. When inflation is in effect, it takes more of your money to buy the same thing you bought for less previously. Think about how much a candy bar cost when you were younger. Now, think about how much more it costs now – and how much smaller it is, too! That’s inflation at work.

Over time, inflation erodes your earning power. $10,000 today doesn’t go quite as far in terms of buying goods and serves as $10,000 did 20 years ago. And, in another 20 years, $10,000 will buy even less. You need to prepare for the reality of inflation so that you don’t find yourself struggling due to your reduce spending power.

Beating Inflation

Like so many things related to financial planning, inflation is expressed as a percentage. Inflation might rise at 3% or 4% rate, annualized over the next 30 years. This means that your money needs to grow with at least the rate if you expect to keep your earning power intact. If you want to improve your earning power, your money needs to grow at a rate that beats inflation.

One of the reasons that investing is considered so essential to retirement success is that it provides the opportunity to beat inflation. Stocks, even if they return an annualized 5% or 6% (a very conservative estimate) are still likely to manage to beat inflation over time. There are bonds, like I-bonds and TIPS, that are pegged to inflation and return more as inflation increases so that you keep pace with price increases.

As you might imagine, though, cash products don’t offer much of a chance for you to beat inflation. Right now, you are lucky if a high yield savings account offers 1% APY. Over time, such low yields result in you actually losing money in real terms, since inflation overwhelms your gains and erodes your buying power.

As you consider your future, and as you plan for retirement, make sure that you include investments that are likely to help you beat inflation. There are less risky investments, such as dividend aristocrats and index funds, that can increase your chances of beating inflation and seeing a prosperous future.

Dow Jones – New Dividend List Added

This week we have added a new dividend list for our top dividend members – dow jones dividend stocks. Most investors are very familiar with this index and the stocks that it includes but we wanted to make the dividend data for each of these companies available to our members. We also added the number of consecutive dividend increases for each of these stocks.

Interesting Numbers

While the Dow is often thought of as a slow moving index we found some interesting numbers that are worth sharing. All stocks in the index pay a dividend, although some have a very small yield. 9 of the 30 stocks listed have a negative return over the last 12 months. Only 10 of the 30 stocks have a dividend yield over 10% and 16 of the companies have increased its dividend for 5 years or more.

The average yield of the index is 2.6%. About half of these stocks have a DSO rating of 90 points or higher based on yield, relative performance and dividend growth.

The main reason we created this list is that we know many investors turn to the Dow 30 Index to find dividend stocks to invest in. We hope this list can be a quick data resource for anyone looking for information on Dow Dividend Stocks. As always, consult a financial advisor before making any stock market decisions.

Are You Expecting Too Much from Your Portfolio?

When people start investing, many of them have this idea that riches are just around the corner. By investing in a “hot stock,” they think that they will be able to see huge returns and strike it rich in a matter of months.

This isn’t the only erroneous expectation that many have for their portfolios, though. Dreams of huge annual returns over time lead some to think that putting in a hundred dollars a month with dollar cost averaging will lead to a nest egg a million dollars when they decide to retire.

While it’s true that investing can help you build wealth, and it can be an efficient way to see greater returns over time, it’s important to realize that you need to have realistic expectations. Your expectations for returns are likely higher than you can truly expect to receive. If you don’t want an unpleasant surprise down the road, it’s important to temper your expectations.

Sustainable Gains Take Time

First of all, it’s important to understand that sustainable gains take time. If you don’t have a huge amount of capital (and even if you do), you aren’t going to see big returns for your money in a short period of time. You will only be buying what you can afford, including partial shares, so building your portfolio is the work of years.

You can’t start investing right now and expect to see massive gains immediately. And you also have to realize that the likelihood of timing the market just right to enjoy great investment success is more about luck than anything else. Expecting that your investing genius is going to result in big gains is unrealistic.

You Probably Won’t Average 10% Returns Over Time

We always hear that we shouldn’t rely on past performance to predict future results, but we like to historical precedent anyway. Many predict “conservative” returns of 7% to 8% on a stock-heavy investment portfolio, but are quick to say that the annualized return is historically closer to 10% or 11%. This means that many people assume that they are going to receive 10% returns on their portfolios.

Sadly, this just isn’t very likely when you look at the volatility in the markets right now and the changing macro outlook. When making plans, many people plug in 8% to 10% returns into the online calculator. They are comfortable putting $200 in each month, and think that their retirement accounts will grow to what they need in 30 or 40 years. If you do end up with 10% interest, you could see more than $1 million at the end of 40 years. But what if you are only 7% interest ($480,000), or 5% interest ($290,000)?

That’s a big risk to take. If you want to find success, it’s important that you step back and double-check your perceptions. Try for a more realistic view of what will happen with your portfolio, and realize that you need to temper your ex

Higher Dividend Taxes on the Way; Oil-Field Dividends

This week there has been a lot of talk about President Obama’s 2013 budget changes. One of the changes listed in the current incarnation is for the special tax rate for dividends to disappear starting on January 1, 2013. Right now, dividends are taxed much the same way that capital gains are taxed — with a top rate of 15%.

All of that could disappear if the special rate for qualifying dividends disappears and dividends revert to being considered ordinary income. With the schedule demise of the Bush tax cuts on the table, the top rate could also go up. This could mean that you could see more of your dividend income taxed. Many are already concerned about the state of affairs, since some consider dividends to already be double-taxed — companies pay taxes on the money before paying the dividend, and then dividend recipients pay taxes on what they receive. With dividend taxes likely to go up, this only compounds the problem.

Oil-Field Service Companies Offer Interesting Dividend Opportunities: EXH, CLB, RES

As energy becomes a hot topic, oil-field service companies are providing different opportunities to earn dividends. Some of the companies receiving attention for their dividends right now in the oil-field services include:

  • Exterran Holdings, Inc.: EXH has been paying a very high yield recently (although that could end, since the payout exceeds the earnings).
  • RPC: RES features a good dividend growth rate, but the company might have a hard time maintaining its growth rate over time. The upside to RES is the fact that the company keeps its debt low, and its profit margins higher than average.
  • Core Laboratories: CLB is another company with red-hot dividend growth. The company offers oil reservoir management services, and claims to innovate enhancement products. CLB could provide solid dividend earnings in the future, if it can maintain.

In the end, you do need to do your research. These types of companies are rarely thought of, but they can offer opportunities.

Are You Ready for a Financial Emergency?

You never know when a financial emergency will strike. Whether you lose your job, experience the fallout from a market setback, end up in the hospital, or a natural disaster comes calling, a financial emergency is never fun. And, of course, it can leave your money situation in a shambles.

If you want your finances to survive as best they can in the face of a financial emergency, you need to prepare ahead of time. Here are some ways to prepare for a financial emergency:

Build Your Emergency Fund

One of the essentials to being ready is having an emergency fund. Your emergency fund can help you through when you need help paying bills, buying food, or for other purposes. Create an adequate emergency fund, you will likely have what you need to get by.

Get Your Finances in Order

You stand a better chance of weathering financial disaster if your money is set to rights. Take some time now to fix your finances, and get everything in order. Know what credit card numbers to call if they are lost or stolen, know where your insurance information is, and make sure you know which bank accounts and investments accounts are accessible.

Keep important information in a safe place. One of the best places to keep important documents, such as birth certificates, investment account information, insurance policies, passports, and emergency credit cards is a waterproof fire safe. A small one can be especially helpful, since it’s easy to just grab it go.

Build Up Home Food Storage

Another good idea to prepare for financial emergencies is to build up home food storage. If you have food at home, you won’t be as vulnerable if you lose your job. You will need less money to buy food if you already have what you need. Additionally, food storage can come in handy in a pinch during a natural disaster or similar emergency.

Other important items to have ready include a 72-hour kit that you can take with you for food, water, and First Aid, as well as extra blankets, alternative heat or fuel, and other emergency preparedness items. You never know when a financial emergency will coincide with some other type of emergency, and you should be ready to provide for yourself in your home, as well as be ready to evacuate if necessary.

Now is the time to prepare for financial emergencies that can arise at any time. Carefully build your emergency fund and prepare in other ways for an emergency. If you start now, and build up a little bit at a time, you will have a better chance of making it through almost any financial emergency life offers.

Are You Prepared for Another Market Setback?

When it comes to the markets, many investors feel as though the current state of affairs is going to last forever. However, this is not the case. In the short term, volatility is a reality. Plus, when it seems like nothing will stop a market from rising, that’s about the time when a crash comes in to wreak havoc with your portfolio.

It doesn’t have to be like that, though. How you respond to a market crash has a great deal to do with your attitude. It’s important that you prepare for what’s next. Even if you think that things are going to keep getting better, you still need to shore up your finances. Here are some things to keep in mind:

1. Are You Properly Diversified?

One of the things that you have to remember is that you can reduce your exposure to risk and falling markets if you are properly diversified. Diversification can help you do well when the markets are struggling because you have other investments that do well in such a climate. Look for ways to diversify your holdings to prepare for the possibility of a market setback.

2. Do You Have an Emergency Fund?

Following basically good financial principles is important when it comes to being ready for anything. One of these principles is building an emergency fund. You want to have a good emergency fund available. If your dividend income is cut due to market and economic conditions, you’ll need to make up the difference. An emergency fund is a must, since it can back you up as you wait for your portfolio to recover.

3. Do You Have Ready Cash to Make Purchases?

Another important thing is to be ready to take advantage of the situation. While many people live in fear of a market setback, others see these occasional market crashes and drops as a way to get ahead. It’s possible to pick up bargain investments. You can get more bang for your buck when you buy investments when they are “on sale.” If you think that the market is heading for a setback, freeing up some money can be a good idea. This way, you have some capital available to take advantage of any opportunities.

Bottom Line

The important thing, though, is that you are ready. Plan ahead. During the good times, you need to prepare. Live within your means, and prepare for setbacks. Market crashes are a reality, and that means that you need to be prepared for them.