Introduction
The analysts here at Dividend.com analyzed the search patterns of visitors to our site during the week ending October 16, 2015. Below, we give an analysis of how intelligently users made the best of Dividend.com in order to help them in their investment decision-making processes.
Walmart
Walmart — the dividend stalwart — features on our trending list for a second time in a row. We published a detailed analysis of Walmart’s outlook going forward here
To summarize a few key points from Dividend.com’s analysis of the Walmart announcement
- Sales growth slowing down due to intense competition in retail
- Growth is hard to come by, hence Walmart plans to spend billions on renovating stores, raise employee wages ($1.2 Billion) and find new avenues for growth in the e-commerce space ($1.1 Billion)
- Management are expecting earnings to be at a standstill until 2019
- Walmart is also a member of the Dividend Aristocrat list, having increased its dividend for 42 years in a row, with a 40% payout ratio.
- Considering Walmart’s dividend growth history and management’s future predictions, it’s safe to assume the following cash flow to investors
| Projections | FY 2016 | FY 2017 | FY 2018 | FY 2019 |
|---|---|---|---|---|
| Projected Earnings per Share | $4.31 | $4.31 | $4.31 | $4.74 |
| Projected Dividends | $2.05 | $2.16 | $2.27 | $2.38 |
| Projected Payout Ratio | 47% | 50% | 52% | 50% |
From a long-term perspective, buying Walmart after it had its biggest intraday fall in 25 years makes sense. One should think rationally and take a look back in history on how this discount store’s share price actually grew during the 2008 recession as people switched their buying from luxury stores to discount as they began to feel the heat of recession. Judging by recent economic data and the growing income inequality in America the probability of a prolonged period of low economic growth cannot be ruled out, which can again switch consumer preferences towards Walmart.
Read here for a complete analysis on how two exactly opposite sectors of the economy—luxury stores and discount stores—outperformed the broader market at the same time while income inequality grew in America. It’ll make your head spin.
Dividend Capture Strategy: Understanding Dividend Dates
“Dividend Capture” seemed to be the theme of last week as investors were searching for well established dividend payers that they could buy prior to the ex-dividend date and then sell it either on the ex-dividend date or at some point shortly thereafter. What further cements this point of view is that an Investing 101 article on understanding dividend dates was trending throughout the week.
An experienced capture strategist finds good companies that are least likely to fall by the amount of the dividend after the ex-dividend date. S/he simply makes sure their name gets included in the list of investors that should be paid out a part of the company’s earnings, and get’s out as soon as a profit is made. Find a better understanding of the intricacies of this strategy here.
Blackstone Group and Royal Bank of Canada
| Ticker | Company name | DARS Rating | Ex-Dividend Date | Payout on 10/22/2015 | Capture Strategy Return % |
|---|---|---|---|---|---|
| BX | Blackstone Group | 3.3 | 10/22/2015 | $0.49 | 1.45% |
| RY | Royal Bank of Canada | 3.3 | 10/22/2015 | $0.79 | 1.39% |
On October 22nd, BX and RY should technically fall by the amount of the dividend, but BX was flat and RY was up 0.65%. If Investors bought the stock on the 21st of October and sold the stocks on the 22nd, they would have not only seen a gain on the capital, but would have also got a smooth 1.42% return on average on their capital through dividends.
Here you can find a list of dividend paying stocks going ex-dividend, which you can filter by date.
Monthly Dividends
Another popular article amongst income investors last week was the Top 12 Monthly Dividend Payers. The dividend capture strategy mentioned above could potentially be applied every month on these top monthly dividend payers. For a complete list of Monthly Dividend Stocks go here.
Coca Cola vs Pepsi
We saw a Cola War on Dividend.com as investor’s compared both of these socially irresponsible giants as seen in this article.
We’d love to spin you a tale as to why we think this article became a trending topic along with a clever quip about people being thirsty for dividends. The truth is, we don’t know why it’s trending, but selfishly we choose to believe its popularity was simply due to the fact that this was a well written, informative article comparing the merits of two big dividend paying companies.
There’s the possibility that it could be due to the fact that this week marked the anniversary of Marty McFly visiting 2015 as he drove his time machine from 1989 to the future — spurring Pepsi fans to ask, “where’s my Pepsi Perfect
Bad news Cubs fans, the movie’s prediction that Chicago would win the World Series didn’t quite come true….
Bad news Cubs fans, the movie’s prediction that Chicago would win the World Series didn’t quite come true….
IBM
Traffic to IBM’s ticker page grew 43% last week as the company in transition has been repeatedly giving poor earnings. Investor’s worried about their IBM dividend payout might find solace in this article as Dividend.com feels that free cash flow is a more important metric to judge IBM’s dividend than its earnings.
The Bottom Line
We at Dividend.com know how technology is interwoven in our daily lives. Dividend.com has become a central source of information for all things dividends on Wall Street. By analyzing how you, our valued readers, search our property, we hope to uncover important trends that help forecast stock market performance. Every Friday, we’ll share these search patterns for the week that went by in order to assist you in making insightful decisions for your portfolio
