April 29, 2017

Starbucks Corporation Delivers Record Earnings, but 1 Important Metric Is Getting All the Attention


The global coffee giant continues to deliver solid growth, but comparable sales in U.S. stores aren't growing as fast as management expected.



Starbucks Corporation (NASDAQ:SBUX) reported its second-quarter financial results on April 27, and it delivered a venti-sized portion of revenue and earnings per share, both of which were the best ever for a single quarter in the company's history.

But there's a problem -- though it's a bit of a "high-class" one -- with the company's growth in recent quarters: Management struggles to produce same-store sales growth in its core U.S. segment that meets expectations. Let's take a closer look at what's happening with Starbucks' business results, and what management says to expect going forward.




April 26, 2017

Qualcomm: 4.3% Dividend Yield, With NXP Acquisition A Major Growth Catalyst



A 4%+ dividend yield is hard to find in the technology sector, which makes Qualcomm (QCOM) that much more appealing.

Qualcomm stock possesses the rare combination of a high dividend yield, along with high dividend growth as well.

It recently raised its dividend by 7.5%, which pushed its dividend yield up to 4.3%.

Qualcomm is a Dividend Achiever, a group of 265 stocks with 10+ years of consecutive dividend increases.

The stock has been dragged down by a negative news flow. It has lost nearly 20% of its value year-to-date.

But long-term investors should not be swayed.

Qualcomm remains a high-quality company, with a strong industry position, high free cash flow, and an excellent balance sheet.

Its sagging share price—which has pushed its dividend yield to 4.3%–could be a great buying opportunity for long-term dividend growth investors.




April 25, 2017

3 Stocks Could Double Their Dividends -- But Shouldn't


A big dividend raise isn't always the right move for a business.



Everybody loves dividends. I mean, seriously, who doesn't love a stock that pays you cash as a thank-you for investing? Additionally, dividends are usually a solid indicator that a company is actually making money -- after all the financial finagling, it still has the cash to schedule payments to investors. Escalating dividends are often taken as a sign that management is particularly bullish on the company's future -- so much so that they're willing to hike how much they pay investors each quarter.

It's understandable, then, that the idea of a company doubling its dividend is exciting. To get paid literally double what you were previously being paid is great on its own, but it also means the company has the wherewithal to sustain all that extra cash going out the door -- a sure sign of its strength as a business.

But there's a big difference between "can" and "should" -- and while these three companies can give income investors a doubled dividend, here's why they shouldn't.




April 24, 2017

10 Dividend Stocks That Will Deliver Double-Digit Returns Every Year


These stocks already generate high annual income, so you need just a little growth to reach 10%-plus in annual returns



Today we’re going to take a look at 10 dividend stocks that look like solid bets to generate double-digit total returns every year, or at least every year on average.

Claiming a stock will deliver a double-digit return every year is a bold statement. After all, the “Siegel constant,” named after Wharton Professor Jeremy Siegel, says the stock market as a whole delivers total returns of around 7% per year after inflation. So, a stock that delivered a double-digit return every year would be one that consistently beat the market.

A 10% annual return is obviously not get-rich-quick money. But at that rate, you’re still doubling your money every seven years, and that’s not too shabby.

You know the old refrain: Past performance is no guarantee of future results. I can’t promise you that every stock on the list will deliver a double-digit return, particularly if we have weakness in the broad market. But I can tell you this: Based on current prices and dividend yields, these stocks are definitely priced well enough to make double-digit returns possible, which is better than what I can say for the vast majority of other stocks.

You’ll notice some common themes among this list of dividend stocks to buy. They all pay dividends, and most a long history of raising those dividends. Also, tech stocks or other companies I see as being at risk of disruption are also mostly left off the list.



April 23, 2017

IBM: Warren Buffett Is Holding On Despite The 5% Decline (And You Should Too)



Shares of International Business Machines (IBM) fell 5% on Wednesday, April 19, after the company posted a disappointing first-quarter earnings report.

Legendary investor Warren Buffett took a big hit from IBM’s decline. His investment conglomerate Berkshire Hathaway (BRK-B) is IBM’s largest shareholder.

At the end of 2016, Berkshire held 81.2 million shares of IBM, good for 8.5% of the company’s share count. Berkshire’s investment is worth approximately $13 billion. IBM is one of Buffett’s highest yielding holdings. After the 5% decline, Berkshire’s investment in IBM lost roughly $800 million in value.

IBM is a high-quality dividend stock. It is a Dividend Achiever, a group of 265 stocks with 10+ years of consecutive dividend increases. You can see the full Dividend Achievers List here. With four more years of dividend increases, IBM will join the ranks of the Dividend Aristocrats, a group of companies in the S&P 500 that have raised dividends for 25+ years.

Despite the one-day drubbing, Buffett likely has no intention to sell IBM—and neither should you.