Buy Total (TOT)
I’m sure this one is going to be popular. (Yeah, right.)
Today, May 28, I’m adding Total (TOT) to the Jubak Dividend Income portfolio.
That’s right a European (gasp) oil (shudder) stock.
Total’s shares have dropped from $65 at the beginning of 2010 to $45 now. That’s driven the yield up to 6.5%, considerably above the yields for U.S.-based oil companies such as Chevron (CVX) at 3.8%.
Sell du Pont (DD)
I’m selling E.I. du Pont (DD) out of the Jubak Dividend Income Portfolio today, May 28, for the same reason that I just sold Rayonier (RYN). The stock has held up so well that the 4.5% yield doesn’t compare favorably to the higher yields offered by stocks that have been beaten up in the recent correction.
Buy Banco Santander (STD)
I don’t know when the euro debt crisis will be over or when European stocks, particularly European bank stocks, will stop sinking like stones. Certainly investors aren’t out of the woods yet: Fitch Ratings downgraded Spain to AA today (finally), for example.
But I do know that with a yield of 9.5% today, May 28, Banco Santander (STD) is paying me quite handsomely to wait.
Whenever you see a yield this high, you know that the market thinks there’s a lot of risk in a stock. The Spanish economy is a mess and the government’s efforts at cutting its budget deficit haven’t convinced anyone that the country is serious about fixing its problems.
The selloff has created big bargains in dividend stocks–I’m adding two to my income portfolio
Once upon a time, I worked in an office beneath a sign that read: “We’re a non-profit company…but we didn’t plan it that way.”
I feel a similar emotion as I write today about all the wonderful buys this market correction has created for dividend income investors.
I’m a dividend income bargain hunter…but I didn’t plan it that way.
Nonetheless and despite my chagrin, I think the bargains in this market are too amazing to pass up. The 12% drop (as of May 25) in the Standard & Poor’s 500 Stock Index from the April 23 high pushed up yields to the point that some stocks I never thought I’d ever put in a dividend income are begging to join the Jubak Dividend Income portfolio http://jubakpicks.com/jubak-dividend-income-portfolio )
Asian stocks beat U.S. equities on dividends? Who knew?
High dividend yields are showing up in some unexpected places. Like Asia.
If you think anything like I did just a scant few months ago, you wouldn’t dream of looking to Asian stocks for high dividend yields. Most likely, you think of them like I did, as resembling the technology sector: Lots of growth but no yield.
Well, I was wrong and if you think like that you’re missing an increasingly important source of high dividend yields. (By the way, technology stocks pay dividends too these days. Check out Intel (INTC) to see what I mean.)
Here’s the data from the Matthews Asia Dividend fund (MAPIX) that opened my eyes. “Based on consensus estimates, the projected dividend yield for 2010 of the MSCI AC Asia Pacific Index of 2.5% exceeds the 2.0% expected of the MSCI U.S. Index,” the fund’s managers wrote in their December 31, 2009 report. In other words Asian stocks out-yield their U.S. counterparts.
And the Asian yield story looks like it’s got a way to run. In China, for example, total dividend payments grew to $73 billion in 2008 from just $8 billion in 1998, according to the December 31 report from another Matthews fund, the Matthews China Dividend Fund (MCDFX). And $57 billion of the $73 billion in dividends paid out in 2008 came from companies that went public after 1998. Even recently public companies in China, it seems from the data, are paying good dividends.
Why haven’t dividend investors stocked up on these higher Asia yields? (In the process driving yields down, of course.)
