Displaying items by tag: income

(New York)

The $36.6 bn Vanguard Dividend Growth fund (VDIGX) is finally reopening its doors to new investors. The fund has been closed to new investors for 3 years, but the manager says “After careful analysis of the fund’s current cash flows, we’re confident that there is ample capacity to reopen the fund”. The fund’s five-year annual return is 12.1%, besting the Russell 1000 by 1%. The fund’s average stock holding has a market cap of $110.6 bn, and its top five holdings are McDonald’s, Coca-Cola, American Tower, Medtronic, and Microsoft.

FINSUM: Vanguard funds are enormously popular for a reason, and this is an exceptionally well-performing fund that is finally reopening. Seems like a good buy.

(New York)

Beyond high valuations and a potentially worrying economy (not to mention a trade war), there is something else investors need to worry about. Goldman Sachs is warning investors that S&P 500 companies are engaging in unsustainable financial payouts. The bank shows that in the year ending in March, companies in the index spent about 104% of their free cash flow on buybacks and dividends. It is the first time since before the Crisis that companies spent more on payouts than they generated in free cash flow.

FINSUM: So far this behavior is not hurting companies because investors are okay with extra leverage given the likelihood of Fed easing, but this is definitely a warning sign of financial excess.

(New York)

Annuities are an important part of both advisors’ businesses and their clients’ portfolios. However, the options in the market can be overwhelming, especially if you are an advisor new to the asset class. The annuities business has cleaned up its act in the last few years and is finally getting some respect because of its ability to alleviate retirees’ worst fears—running out of money in retirement. Well, Barron’s has put out a list of the top 100 annuities in the market, including how to pick them. The list is quite extensive, so here is a link. The choices are broken down into numerous categories and include offerings from Lincoln National Life, Transamerica, Prudential, CUNA Mutual Group, and beyond.

FINSUM: Not only do annuities help alleviate the fear of running out of money for retirees, but they are also popular with Millennials, who are financially conservative and have a similar concern about future income.

(New York)

Are you looking for a good dividend stock? Well, we have one for you. How about a stock that has risen 27% this year yet still has a 4% dividend yield and a very solid business? If that sounds good, take a look at Prudential Financial. The company is an asset manager and insurance provider, and has solid growth and financials and seeks to be financially prudent. “We believe in a very consistent and regular dividend that will be aligned with our earnings growth, says the CFO. The company has expected earnings growth of 8% this year.

FINSUM: Prudential is a pretty sleepy name, but there is nothing boring about a 4% dividend combined with earnings growth and market-beating price appreciation.

(New York)

Markets are getting more volatile by the day. Last week was a rough one and yesterday was total carnage. Investors might be thinking about allocating shares into some safer sectors. With that in mind, here are 7 safe dividend payers to take shelter in: JP Morgan (2.8% yield), Sempra Energy (3.1%), NextEra Energy (2.6%), Air Products & Chemicals (2.3%), Honeywell International (1.9%), McCormick (1.5%), Microsoft (1.5%).

FINSUM: One of the big things to remember here is that with the Fed on hold, the big headwind against dividend stocks is pretty much removed.