Presidential Income

Markets are closed today for President’s Day.  The activity this week will be interesting following Friday’s flat stock market and commodity-lower divergence.

“…accumulate income-generating assets whose income by itself may generate enough cash that you don’t have to liquidate anything. Dividend growth stocks are exactly those kinds of assets.”  Dividend Monk

Stock buybacks are often considered a sibling to the dividend:  Why Investors Need to Understand “Total Yield” (Josh Brown).  Except in real life, The Terrible Timing of Share Buybacks (Barron’s).  In short, stock buybacks executed when shares trade at good valuations with a strong business franchise work out exceedingly well.  Otherwise, look out!  (Soapbox:  The tech company which annually gives out 4% of outstanding shares to employees as compensation and then spends all free cash flow to repurchase 4% of shares is a sham, not profitable and to be avoided.)

Loews has bought back 70% of outstanding shares over the last four decades.  Further, Loews dividend is 12X the level of twenty years ago.

The holiday might a good day for the true long term investor to spend a few hours of due diligence on each of FNV and L.

 

One thought on “Presidential Income

  1. The Dividend Monk interview with David Van Knapp may be the best article I have ever read as being someone who agrees with his approach on creating retirement income. All your subscribers should consider this approach. Thanks for the link!

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