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.

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Can Target Keep Growing Its 4.5 Percent Dividend Yield?

The numbers that signal Target’s ability to keep dividends on a growth path

Target (NYSE:TGT)’s share price has been on a steady, sharp downward spiral since the middle of 2015, and the company has lost nearly one-third of its valuation over the last 12 months. With a P/E ratio of just over ten, Target is trading at an extremely attractive price point, especially for a dividend investor because the yield is nearly 4.5%. But how sustainable is Target’s dividend capability, moving forward?

One of the main reasons Target’s share price collapsed was that comparable store sales remained extremely weak last year. Considering the state of the competition in the retail market, coupled with the steady rise of Amazon’s sales in the United States, Target found it extremely difficult to make more customers walk into its stores. Comparable sales decreased 0.5% in 2016, with traffic decreasing by 0.8%.

With Walmart and Amazon going to head to head, things are indeed very difficult for smaller players. Target, being a bigger player with 1,802 stores, still has a chance, but it will entirely depend how they can differentiate their offering from a crowded and fiercely competitive market.

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3 Reasons Why Cisco Is a Better Dividend Growth Stock Than Intel

See why Cisco is a better buy at current prices for long-term dividend growth investors

The technology sector is a surprisingly good source of dividend stocks.

This wasn’t always the case. During the heyday of the tech sector, hardly any tech stocks paid dividends at all.

But after the tech bubble burst, investors began pushing for technology companies—many of which have high cash flow and huge amounts of cash on their balance sheets—to pay dividends.

Two of the highest-yielding stocks in the Dow Jones Industrial Average are Cisco Systems (NASDAQ:CSCO) and Intel Corporation (NASDAQ:INTC), both of which hail from the tech sector.

Neither Cisco nor Intel is a Dividend Achiever, which is a group of 265 stocks with 10+ years of consecutive dividend increases.

That said, Cisco and Intel are both highly profitable companies, with leadership positions in their respective industries.

However, Cisco is in a stronger position right now. This article will discuss three reasons why Cisco is likely to be the better dividend growth stock moving forward.

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Top 4 Dividend Stocks To Hold Now

In my latest article, I’ve highlighted 4 popular dividend stocks to sell. As I wrote at the end of this article, I don’t appreciate when people criticize without bringing something on the table. For this reason, I’m offering you 4 interesting stock picks for 2017 that could easily replace the other bad seeds.

Let’s look, what is The Dividend Guy’s opinion about HON, LOW, DIS and BLK.

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Why You Shouldn’t Count Qualcomm, Inc. (QCOM) Stock Out Just Yet

Qualcomm stock has a few catalysts heading its way

Qualcomm, Inc. (NASDAQ:QCOM) has multiple catalysts ahead. The company already announced many of the positive developments yet the stock price hardly moved. The FTC’s antitrust case against the company is just beginning but improving fundamentals outweigh those risks.

An announcement from BlackBerry Ltd (NASDAQ:BBRY) and Qualcomm sent QCOM stock lower.

In an arbitration decision, Qualcomm will pay nearly $815 million to BlackBerry. The royalty over-payments will not hurt the relationship between the two companies, as both are vying to enter markets beyond smartphones. Therefore, QCOM stock investors should expect future collaborations and deals between the two companies despite the arbitration decision.

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This 4% Yielder Has an Incredible Record of Dividend Growth

Dividend investing is not all about hunting for monster yields. It is about identifying those companies that have an established track record of making sustainable dividend payments coupled with regular dividend hikes. One Canadian company that stands out having an exceptional history of regularly growing dividend payments is diversified utility Canadian Utilities Limited (TSX:CU).

Many investors regard utilities as boring, stable stocks that, while having solid defensive credentials, lack the glamour of other, more growth-oriented stocks. While this may be true, Canadian Utilities is no lacklustre investment.

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3 Value Stocks Senior Citizens Could Buy Right Now

Want to get the most out of an investment account in retirement? Take a look at CVS Health, Verizon Communications, and General Motors.

It is challenging for older investors to find reliable, income-paying stocks that trade at cheap valuations. The reason? Stable businesses with the ability to churn out a stream of growing dividend payments rarely go on sale. Every once in a while, though, a few of them fall out of favor, providing an opportunity to buy in at a good price.

So we asked our contributors if they see any stocks on sale today that would fit nicely in a senior citizen's portfolio. They came up with three: CVS Health (NYSE:CVS), Verizon Communications (NYSE:VZ), and General Motors (NYSE:GM). Here's a look at why they are well suited for retirement accounts.

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UPS Purchased To Meet These Specific Objectives

United Parcel Service Inc. (UPS) currently offers a dividend yield in excess of 3%. Moreover, it is also available at a valuation that is slightly below historical norms. The company has provided a stable and growing dividend since it went public in 1999. However, the company did keep their dividend the same for fiscal years 2001 and 2002, but they did not cut it. Additionally, 2008 included five dividend payments due to a change in their dividend payment schedule. Nevertheless, their dividend growth rate since 1999 has averaged 13% per annum, but the dividend growth rate has slowed somewhat to 8.2% per annum since 2013.

United Parcel Service Inc. carries an A+ credit rating from S&P but does have a debt to capital ratio of 75% – which I consider a concern. However, the company generates significant revenues and produces ample cash flows to service and eventually retire its debt. Moreover, a significant portion of their debt is long-term, which does moderately alleviate my concerns. But more importantly, the debt they have recently taken on was used to fund numerous acquisitions since 2014 and to expand international services significantly. I see the latter as a huge opportunity that should bear fruit over the longer run.

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Top 4 Popular Dividend Stocks To Not Hold

And I’m ready to take your tomatoes… even though I’m right.

Instead of making another list of great stock picks, I decided to do the opposite today. I actually wrote about these companies over the past 12 months telling investors to sell them now before it’s too late. What makes them special is that they have tons of fans as they are very popular dividend paying companies. They often ace the first filtering processes due to their competitive advantage and good fundamentals. Their “brand” as a dividend paying stock is strong among investors but I feel that they offer more smoke than anything else. Many investors are blinded by the story told by these companies and tend to ignore the story that will happen in the years to come.

Those companies are on my black list and I don’t see them returning to my watch list anytime soon. In fact, I think each of them is a BIG SELL at the moment.

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3 Reasons to Buy Microsoft Corporation (MSFT) Stock Right Now

Despite its unbelievable gains, it's not too late to jump into MSFT stock

When it comes to stocks, Microsoft Corporation (NASDAQ:MSFT) is as blue chip as they come. The technology giant has been a portfolio staple for decades and has powered generations of investors with long-term gains.

In fact, had you bought MSFT stock when it went public back in 1986, you would have made nearly 67,000% on your investment. No wonder why Bill Gates is the richest person on the planet.

And MSFT stock continues to impress investors. Mr. Softy was up an impressive 16% last year alone. With such an extraordinary returns history, the question is, can shares of Microsoft continue to make some serious money for its investors going forward?

With the following three catalysts in play, the answer is a resounding yes. Microsoft is still one of the better long-term buys in tech.

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Buying Apple Inc. (AAPL) Stock for the Dividends? Don’t.

You can be bullish on AAPL stock because of its growth prospects, but income investors have far better options

Pacific Crest analyst Andy Hargreaves recently recommended that investors hold on to their Apple Inc. (NASDAQ:AAPL) shares. But it’s not because of new iPhone sales, but rather, the impending Trump tax reform. That will enable Apple to repatriate foreign cash to be used for increased dividends to owners of AAPL stock.

“We see potential for further upside to our unit and gross profit dollar estimates in the coming iPhone cycle, but believe growth beyond that will slow substantially,” Hargreaves wrote in a note to clients. “Consequently, we believe tax reform and a subsequent increase to the dividend may be necessary to drive significant upside in AAPL.”

Seriously, if that’s why you’re hanging on to your Apple stock, do yourself a favor and sell now. There are better dividend stocks to own in industries with much less volatility and change.

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3 Attractive Healthy Dividend-Paying Market Gems

With volatility continuing to bedevil the stock market, investors are necessarily looking for protection through stocks that are paying decent dividends. So, many investors have become dividend-seeking players, but the ultimate and difficult question is how and where to find such companies that provide attractive dividend yields.

From the many groups of analysts engaged in this search, Morningstar has come up with attractive and diverse ways and methods of analyzing the various opportunities in the dividend-yielding areas.

Three stocks among the beaten down healthcare sector appear the most tempting -- and sufficiently attractive.

They are Sanofi, which pays a dividend yield of 3.7%, Pfizer with 3.6%, and Novartis which also provides a yield of 3.6%.

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3 Top Dividend Aristocrats to Buy in April

Income investors who seek stability should start and end their searches with Dividend Aristocrats. To qualify, a company has to have increased its dividend for at least 25 years in a row, which is an achievement that few businesses can replicate.

So what Dividend Aristocrats are great buys right now? We asked a team of Fools that very question. They picked 3M (NYSE: MMM), Medtronic (NYSE: MDT), and TransCanada (NYSE: TRP).

Continue reading to find out why.