Early Retirement Extreme Forums

Hi

I wanted to ask what websites and information I should use when looking at dividend stocks? I'm specifically looking at how I confirm the dividend is safe. I have been reading the cashflow statements but wanted to see if anyone had additional advice.

I focus mainly on cunsumer goods companies that havea history of raising their dividends.

Thanks Curt

dividendgrowthinvestor.com
Read all posts since 2008.

try http://www.bravenewlife.com/dividend-holdings/

Well, it's impossible to outright confirm.
The closest you can get is to consider what would happen if the company can't pay/refinance their short term obligations. In such a case, they're likely to cut their dividend or start paying it out in shares. This happened for several companies during the credit crisis.
Typical ratios to consider is payout rate (doesn't work for high depreciation companies like telecom) and current ratio or acid test.
A history of raising dividends is certainly no guarantee. Consider what happened to the bank stocks...
A history of increased earnings is no guarantee either, e.g. WAG.
(In fact I consider such histories somewhat circumspect because they often result in a premium which is priced in with the Gordon growth model ... but maybe that's just me, a personal preference.)
I'm not aware of any websites that will specifically calculate whether a given company is SAFE.

Check out http://www.dividendgrowthinvestor.com/

Thank you pka and Jacob .
Jacob never thought about the dividend streak resulting in a premium but you bring up a good point. I guess I have a hard time trusting managements not to waste money and companies that have a history of raising dividends seem to ensure more of the free cash flow goes to increasing the dividends each year..
I still have a to learn so all advice is much appreciated . If you are willing any tips on evaluating utilities would be a help. For example I have started doing research on EXC and believe the next two years will be tuff until nat gas starts to increase In price. I believe it is a solid company with an attractive yield I'm struggling to get a handle on if they will have the ability to maintain the dividend . If you were looking at EXC what is some of the first things you would look at to form an opinion on the dividend safety ?

Thanks Curt

I think a effective way is to look at what type of business you're buying. If you want to be on the defensive side, look for business selling product service people can't live without and with low or no debt. It should also has a strong competitive advantage compared to its peers.

It's pretty much [your best guess] whether the cash flow can support the debt load---if not, the dividend is the first to go. Unfortunately, it's hard to know whether management gets acquisition fever and decides to finance it with more debt. For example, EXC just took over Constellation.
If I was very concerned about dividends, I'd probably look closer at convertibles. They're more senior than stocks but pay better than bonds.

Interesting, first I've heard of convertibles. I found this Vanguard fund that collects them, but I couldn't find much information on them in my E-Trade account. How does one go about researching/buying them directly?
https://personal.vanguard.com/us/funds/ ... st=tab%3A4
VCVSX dispersed ~5% in dividends and capital gains in 2011.

I like MO (philip Morris). Currently it is yeilding a 4.6% dividend a year. The company makes a cigarette for a penny, sells it for a dollar, the product is addictive to people, and people will continue to smoke forever. Best of all, it makes tons of cash and the company repays it to the shareholders.
I also see growth in places like asia and the middle east

epoch - Gonna be tough for MO to grow in Asia and Middle East when they don't sell products there, lol.
They spun off their international business years ago.