What Dividend Yield is Your Sell Signal?

[william the wie]

Gail and I were talking about the various types and nicknames for dividend yield and when to exit stage left. And that is necessary because there are all sorts of leverage and fees to reduce effective yields

There has been a growth stock cycle since Savary invented the first crude and dangerous steam driven pump in the 1690s. To be replaced with dividend paying issues like the BOE, canal companies, South Seas company and the much earlier East India company that in turn led to the industrial revolution and so on.

Growth companies always seem smart but generally speaking the dividend payers out perform growth until the level of leverage gets to be insane as with the South Seas Bubble.

Leverage comes in many forms such as different classes of shares, Convertible bonds, preferred shares, stock dividends, warrants ad infinitum. The simplest way to time getting out of Dodge is to have a minimum div. yield. That's why there is a survey. What yield tells you it is time to get out of Dodge. Net option premiums can be added to dividend yields if you use them

 

[shockedcanadian]

I'm a Value Investor myself, though haven't had much to invest lately. Technical stats don't mean much to me, I'm an avid student of Warren Buffett and Benjamin Graham. In my world, I am less interested in dividends, especially as they are taxed higher, I would prefer a company with a high ROI to reinvest dividends to improve the profits of the company.

The concept is simple, giving me a dividend payout costs me more in taxes and also gives me no further return, whereas if a company is earning 15% ROI, best to reinvest in the company which will improve returns at a higher rate than I can obtain with a fixed income, or "safe" investment.

In short, strong, high profit businesses are best to use funds for further high profits within the company, and thus, higher stock prices over time. So don't ever sell, and if the company has DRIP, always take advantage of it if you are in for the long haul.

 

[Tijn Von Ingersleben]

Are there marijuana stocks yet?

 

[william the wie]

I'm a Value Investor myself, though haven't had much to invest lately. Technical stats don't mean much to me, I'm an avid student of Warren Buffett and Benjamin Graham. In my world, I am less interested in dividends, especially as they are taxed higher, I would prefer a company with a high ROI to reinvest dividends to improve the profits of the company.

The concept is simple, giving me a dividend payout costs me more in taxes and also gives me no further return, whereas if a company is earning 15% ROI, best to reinvest in the company which will improve returns at a higher rate than I can obtain with a fixed income, or "safe" investment.

In short, strong, high profit businesses are best to use funds for further high profits within the company, and thus, higher stock prices over time. So don't ever sell, and if the company has DRIP, always take advantage of it if you are in for the long haul.

Given that my target return is 10+% and down here I can switch to an LLC cheap when I have to we have different strategies. Try PE/PEG >1 and Beta less than 1 if your tax laws permit it

 

[MarathonMike]

It's more of a warning flag than a sell signal for me. If management seems like they have a clue and a good plan I'll usually stick even if the yield hits 10 %.

 

[william the wie]

It's more of a warning flag than a sell signal for me. If management seems like they have a clue and a good plan I'll usually stick even if the yield hits 10 %.

How high is your initial purchase yield, 20%