Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
Given that the release of the monthly Dividend Advisor came only a day before one of the most cherished long weekends of the year, I wanted to pen a piece that will inspire you to dig into the letter when you’re back in the saddle on Monday or any time next week.
Let’s dive in and explore six reasons you can’t miss this month’s Dividend Advisor.
At Dividend.com we employ a team of analysts who embody the spirit and mindset of a long-term, dividend-oriented investor, championed by our founding Editor-In-Chief, Tom Reese. For the past three years, the editorial component, and much of the Dividend.com Premium product, has become a team effort — two heads are better than one, right?
In that spirit, Evan Cooper, an award-winning financial journalist and long-time dividend investor, pens this month’s Letter from the Editor as our Guest Editor. As we always do at Dividend.com, Evan puts on his long-term, steady-Eddie lens and analyzes what the impending rate hike by the Fed means for us. This has to be the most well telegraphed rate hike since, well ever, given all of the ways in which the Fed has increased transparency over the past six years.
Given the macro context of an impending hawkish bias by the Fed, we’ll also look at which sub-components of the dividend investing world will be affected, positively and negatively, as rates inch up. If you haven’t used the tool on Dividend.com, I’d suggest you check out our proprietary categorization and hierarchy of dividend payers by sector and industry; the average yield for each is particularily interesting.
In this month’s Dividend Advisor we dive into the winners and losers at their tier one categorization, including:
You don’t need to look far to find critics of the jobs numbers. In fact, oftentimes they’re right, and we certainly come at them with an analytical and skeptical viewpoint. That said, the long-term trend since the depth of the financial crisis might be the perspective we need to really analyze the trend. We dissect this and dive into the numbers related to job growth and labor market participation.
We’ve noted in the past that a lot of ink, both digital and physical, has been spilled related to what will happen to the black sheep of the eurozone: Greece. This past week it seems that the Greek government has taken steps to bring the ongoing saga to a climax. The referendum called for Sunday, July 5th is akin to a “stay in the EU or exit” choice for the Greek population, or at least that’s how it’s intended to be perceived.
Given the continued lack of clarity, we’ll look at how this could play out for us in both scenarios: a “Grexit” or another round of “kick the can down the proverbial road”.
First thing’s first, a quick primer on what the heck the Dow Transporation Index is. I can’t do any better than Investopedia.com:
DEFINITION OF ‘DOW JONES TRANSPORTATION AVERAGE – DJTA’:
A price-weighted average of 20 transportation stocks traded in the United States. The Dow Jones Transportation Average (DJTA) is the oldest U.S. stock index, compiled in 1884 by Charles Dow, co-founder of Dow Jones & Company. The index initially consisted of nine railroad companies – a testament to their dominance of the U.S. transportation sector in the late 19th and early 20th centuries – and two non-railroad companies. In addition to railroads, the index now includes airlines, trucking, marine transportation, delivery services and logistics companies.
But why should we care? Investopedia explains:
The Dow Jones Transportation Average is closely watched to confirm the state of the U.S economy, especially by proponents of the Dow Theory. This theory maintains that as the industrials make and the transports take, the DJTA should confirm the trend of the Dow Jones Industrial Average (DJIA), with a divergence indicating a potential reversal of the trend. In other words, if the DJIA is climbing while the DJTA is falling, it may signal economic weakness ahead, since goods are not being transported at the same rate at which they are being produced, suggesting a decline in nationwide demand.
If you’re interested in more financial education, give @Investopedia a follow on Twitter.
In this month’s Dividend Advisor, we explore what a “flashing” Dow Transportation Index might mean for dividend investors.
As you know, each month we highlight a stock that is currently on our Best Dividend Stocks list and re-cap why we believe it’s a reasonable candidate for fresh money at these prices. This month is no different. Don’t miss this month’s pick, which boasts an annual yield of >5% (in an environment in which we all know the 10-year Treasury note boasts a paltry ~2.35%).
While we want to wish everyone an excellent 4th of July long weekend with friends, family and loved ones, we definitely encourage you to read this month’s edition of the Dividend Advisor as it is 21 pages jam-packed with what you need to know as a dividend investor.
Thank you for your support of the Dividend.com community, and talk to you on Monday as we speed towards another busy earnings season in July.