Weaker-than-expected economic data (jobless claims, existing
home sales, etc.) kept a lid on today's stock tape as investors
scrambled to find areas of the market to position themselves in.
News that ratings agency Moody's (
MCO
) cut be setting up to cut more bank ratings also added to the
selling intensity we saw in the afternoon. On those rumors alone,
Bank of America (
BAC
), Citigroup (
C
), and Deutsche Bank (
DB
) were down between 3-4% on the day.
Shares of Bed Bath & Beyond (
BBBY
), which by the way is not a dividend payer but should be, reported
disappointing guidance and the stock got hit hard (down 17%). Other
home-related retailers like Home Depot (
HD
) and Lowe's (
LOW
) were also lower early on as a result. On the flipside, earnings
results helped lift packaged-food maker ConAgra (
CAG
) higher. Lastly, tobacco play Phillip Morris International (
PM
) ended lower following
the company's reduced EPS guidance
(marking the second time in recent months the company has trimmed
expectations).
Trading Quality for Quantity
Each business encounters occasions where opportunities present
themselves. Whether looking at expanding existing business or
venturing into a new business arena, businesses must answer to one
almighty request: profits.
If you're looking to sustain a business for the long term, it's
wise to carefully choose the products you're putting your name
behind. If you have to sacrifice even a sliver of your integrity or
quality just to get into a specific area, you'll likely hurt your
existing business more than help it. Many "one and done" businesses
can be clouds that hang over entrepreneurs. After all, if someone
were to tell you so-and-so ran "xyz" business for a brief period
before it went out of business, you'd likely be skeptical of the
business owner's prospects of succeeding in their new venture.
We sometimes hear from Dividend.com readers that wonder why our
Best Dividend Stocks List
isn't larger (we currently only have 19 recommended stocks on the
list). It would be easy enough to appease the needs of those who
want more stocks to consider for their investments, but at what
cost? To us, the cost of quality is worth leaving some users
wanting more, rather than upsetting everyone with picks that
perform poorly. It's never worth the gamble in my opinion, and for
anyone else that gets tempted to make more sales at the risk of
lowering the quality of your service, I urge you to step back and
consider the ultimate price you may pay.
Dividend Stock Removed from Recommended List
We removed another dividend stock from our
Best Dividend Stocks List
this morning. We still like the name, but would wait to add new
money to the shares for now. Check out the name we downgraded along
with a full explanation
here
.
25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been
paying out dividends for 25 years or more. Be sure to check out
the latest list of names here
.
Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the
difference dividend payouts made in the overall return investors
saw throughout the prior decades. Here are some of the
highlights:
- The Nasdaq is down 28% since the end of 1999. Even the "blue
chip" S&P 500 stocks are down 15% during that time frame…until
you add back those "boring" dividends. With dividends included, the
S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a
loss for the 25 long years from August 1929 to August 1954. Then
again, without dividends, the S&P 500 produced a 5% loss during
the 13 years from September 1961 to September 1974. But with
dividends included, the S&P's loss became a 46% gain.
- Over the course of the last half-century, dividends have
contributed more than half of the stock market's total return -
56%, to be exact.
Of course, you can't discuss the potency of dividend investing
without making mention of how awesome compound returns are. I can't
stress enough the power of compound interest: you take a small
amount of money and turn it into a large amount over time. Finding
the right companies at the right price points which not only grow
earnings, but also grow their dividend payouts as well!
New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist
Names post that is out today, exclusively for
Dividend.com Premium
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
Go Beyond This Newsletter
We know many of you enjoy reading the daily newsletter, but
remember that with our
Dividend.com Premium
service, the newsletter is just one small component of what we
offer. Here are the "Big Three" benefits of our Premium
service:
- The
Best Dividend Stocks List
is used by tens of thousands of investors to help build their own
portfolios.
- Creating your own
Watchlist
allows you to track the performance, news, and upcoming dividend
payouts of the particular stocks you care about.
- Finally, we offer the most complete and easy-to-use dividend
data on the web. Many subscribers use this data as part of a
"Dividend Capture" trading strategy, but long-term investors can
use it to keep track of impending payouts. Just visit our
Ex-Dividend Calendar
for a complete outlook on which companies will be paying out
soon.
We don't ask for a credit card to use our free trial, and we
don't bill you when your trial ends. No obligation whatsoever! So
keep enjoying the newsletter, but please give
Dividend.com Premium
a shot if you haven't already subscribed!
Thanks for reading, and I'll see you tomorrow!
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.