Buying Aristocrats Can Result in Long-Term Dividend Growth

Aristocrat in chair

The Dividend Aristocrats index is an equally weighted index made up of companies that have increased their dividend payouts for 25 consecutive years. The only other requirements of note are that the companies must be members of the S&P 500 and the stock must meet minimum float-adjusted market cap and liquidity requirements. There are other guidelines that must be met at the index level such as minimum number of stocks and diversification, but I will not go into those here.

What I would like to highlight is that the primary requirement of 25 years of consecutive dividend increases is both a feature and a drawback of the index. For example, investors in any of the companies included in the index can sleep well knowing that each of those companies has succeeded in creating financial stability, predictable revenue and cash flow growth, and just as importantly, implemented a dividend paying policy that returns capital to shareholders.

General Growth Properties: Is Being #2 a Competitive Advantage?

GGP Logo

How do you think the San Antonio Spurs players felt last year when they lost Game 7 to the Miami Heat in the NBA Finals? Or how about the Denver Broncos being manhandled in the Super Bowl by the Seattle Seahawks? Do you think those players went home and celebrated being Number 2? I don’t think so either. In fact, I remember being in a championship game as a kid and coming out the loser. Everyone kept saying, “It’s OK, you played great, hold your head up, you’ll get’ em next year”. Well, it wasn’t OK, we didn’t play great, I wanted to bury my head in the sand, and next year was so far away, it might have well been forever.

Being number 2 in sports is not a pleasant experience and can often be a very traumatic one. But being number 2 in business may actually be a sweet spot for many companies. So with that in mind, I wanted to dig a bit deeper into the #2 regional mall owner in the U.S. and determine if it would be a winner for me. I had already evaluated #1, Simon Property Group (SPG) (Read Article), and determined that the price just wasn’t right and I wasn’t about to jump on the bandwagon that already priced in an optimistic forecast. Perhaps there is an opportunity in #2? [button size=”normal” type=”info” value=”Read on Seeking Alpha” href=”http://seekingalpha.com/article/2103113-general-growth-properties-is-being-2-a-competitive-advantage”]

 

Simon Property Group: Are Two Birds in the Hand Really Worth More?

Two Birds in the Hand

As the old saying goes, “A bird in the hand is worth 2 in the bush”, but what if you can have two birds in the hand? That sounds like a deal, doesn’t it? I think you just might get that with an investment in Simon Property Group (SPG). The question is, “Is it worth the price?”

Simon Property Group is the largest regional mall owner in the US. It owns and operates over 320 malls and strip centers globally with over 240 million square feet of space. For 2013, Simon had funds from operations of over $3 billion which translated into $8.85 per share, an 11% increase from the prior year.

Despite the concerns for regional mall owners due to the growth in online sales, SPG has remained relatively well positioned to take advantage of positive consumer spending trends and the shift in mall strategy from one of product sales to one of services and entertainment.

European Equities: Fear Not What Can Help You Achieve Your Financial Goals

If you live in fear of the future because of what happened in the past, you’ll end up losing what you have in the present. Fred Frailey wrote an article on Kiplinger that although is outdated, has a quote that I believe is timeless. In the last paragraph of the article, he states:

Achieving them (financial goals) without the long-term help of the stock market is like driving a car on a flat tire or piloting a 747 on one jet engine. In other words, you may get where you’re going, but you’ll arrive shaken up or in a cold sweat. If you now regard stocks the way my father once did, you had better double or triple the amount you once put aside because you’ll need to buy bales of CDs.

Read more at http://www.kiplinger.com/article/investing/T038-C000-S002-fear-of-investing.html#XqCd1fPAC5uJ38Vl.99

European equities make up part of ‘the stock market’ that Fred is referring to, and while investing only in US equities may be better than not investing in the stock market at all, there are opportunities internationally that should not be ignored.

Mortgage REITs: Proceed Without Fear

Annaly Logo

I wrote an article on December 24th, 2013 about how Annaly’s price seemed to be at a bottom.(Read Article) While other authors on this site were suggesting to run for the hills, I hope you heeded my advice and put at least some money to work on NLY. Investors who did have benefitted from a 13%+ return since then, including dividends paid. Whether or not Annaly can continue its positive performance is the subject of another article I am working on. But in the meantime, I think its interesting that the Annaly logo is the family crest and reads, “Prodesse Non Nocere”, which means “proceed without fear”. I wanted to provide some additional insight into mortgage REITs as an asset class so that investors can invest in them intelligently, without fear, and without having to read from those that try to instill fear.