Dividend info?

has all public US company financial filings.You'll be interested in the forms 10K -- annual report and 10Q -- quarterlyreport. Focus on changes to cash flow.

-- Doug

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You might try getting Dividends Only from the Historical Quotes feature available at finance.yahoo.com

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"W. Wells" wrote

Do you mean for the long term or the short term?

I am speaking as a "defensive investor," namely someone whose stock picks are conservative. I am not looking to beat the market. I am looking to keep up with inflation, both with dividend income and principal.

I find short term changes are often hard to predict. Often, one needs information to which only company insiders have access. We all eventually learn about companies in trouble, and the market starts pricing in expected dividend cuts. Whether the cuts come to fruition is another matter, though.

I expect any reputable entity that rates "likelihood of maintaining dividends for the long term" is going to use as input largely Ben Graham criteria. E.g.

-- Size of the company (larger is safer)

-- How long the company has been paying dividends (longer is safer)

-- Earnings losses over last decade (fewer is safer)

-- Current ratio (higher is safer)

I also watch: Dividend payout ratio (DPR), lower is safer. Dividend increase record, the more years with increases, the safer I expect it to be. I think that's not numerology talking but instead a rough indicator of how in demand the company's product is. Granted exceptions occur.

A few anecdotal observations: A few years ago I was not so rigorous in my stock picks. I still had large companies with a long history of dividend increases, but the likes of, for example, PSD, SLE and CAG still cut their dividends. If I had followed all the above criteria, I might not have bought at least two of these stocks. Looking at these companies' current DPRs and extrapolating back to estimate what it would have been without the cut suggests that, to some extent, I could have anticipated the dividend cuts.

On the other hand, for a large, old company, insofar as the health of a company is concerned, a dividend cut can, simply stated, be a sound decision. While the price of a stock does generally decline somewhat after a cut is announced, shareholders do often applaud cuts. In the case of all three companies above, the price recovered (and then some) within two years or less. So I would say that one does garnish some protection by choosing "large cap and older companies."

One reality of the past several months though is the hazard of investing in financial institutions. Citigroup and Washington Mutual, among others, slashed their dividends stunningly. This was "despite" a 10+ year record of increasing dividends. As I am sure you have read at this point, one could argue that the way these banks financed mortgages simply was not transparent to investors. And yet on the other hand, many folks spoke of the evidence of a housing bubble and the likelihood of its bursting. Naturally banks would take a hit in such an instance. Indeed, I estimate Citicorp (which ultimately became a part of Citigroup, complicating tracking of the dividend history here) cut its dividend in late 1988 and late 1990 by some

75%. By Nov, 1993, the dividend was back at its 1988 rate, if what I pieced together using the New York Times's archives, Citigroup's web site, and Yahoo's web site is reasonably correct. Renamings and mergers greatly complicate following the dividend history.

Will Trice's (and then my) posts on Graham's observations on investing in banks is worth a read.

Dapperdobbs observations that this housing bubble bursting and credit crisis is worse due to xyz certainly deserves consideration, though.

Note to dapperdobbs: One of the kind regulars here sent me a pdf version of the August 2007 Fidelity article on this credit/housing crisis. For some reason, I never got it to come up on the web with my computer.

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I think the metric is payout ratio- percent of profits paid out. The lower the better, with some latitude (maybe not as low as possible, but if a company pay out 50 cents of every dollar of profit, there is a possibility that lack of reinvestment into the business will hurt the dividend down the line).

I would also look for dividend history- some stock charts show how often the dividend price changes over time.

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Good point you make. I believe the general rule of thumb is that younger rapidly growing companies redeploy capital into the business, then at some point when growth prospects slow, initiate a dividend. As the business matures, more money may be paid out, and a 50% payout ratio is not unusual.

Payout ratios also vary by industry, generally by the stability or predictability, of revenues. Another way of saying that is inelasticity of demand. 'Inelastic' means in good times or bad, people will still demand products such as electricity, water, and food, but may put off buying a new car (or new house).

Today's mess with > >

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The SEC website and 10k's are better than annual reports, exactly as Douglas Johnson points out. I look for consistency of growth of earnings, first, then the source of the earnings (the market the company generates revenues from, the stability of the market, the capital base required in the industry, and a general feel for the honesty or integrity of the company). Things do change, so one must spend a few minutes every quarter to be sure you know where your companies are.

Note to Elle: sorry you had difficulty with the link I put up (it seems like two links got posted somehow). Did you notice the headlines about Bear Stearns today? Even guys with AAA mortgages can't find a market for them, not so much, I gather, because there is a question about the credit-worthiness, but simply because the field of buyers is limited by increasing concentration of funds into fewer and fewer institutional hands - and those are the guys who are writing things off, thus squeezed to meet capital requirements, panicking in some cases, and thus have no money to buy with (to lend, by buying bonds or mortgage packages).

In a way, it is not dissimilar to the example you gave of a company cutting or omitting a dividend. It isn't that the company is going out of business (hopefully not), but it may very well be that intermediate- term conditions for a few years have them without cash to pay the dividend. The company going out of business would be a 'credit crisis' while the few years cash shortage would be a 'liquidity crisis.'

An article early last year seemed to indicate that some bad guys were trying to wring concessions out of corporations, due to the rippling effects back then, but it now appears that the corporations held their ground, and the ripples do not appear likely to impact there (unless a company's line of business depends upon an industry where the ripples ARE impacting ... there's always an 'if' somewhere ... just look at the expression on Buffett's face).

[snip]

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"dapperdobbs" wrote

Sure but none of this is a surprise, IMO. You called all this a "black swan" event, which suggests unforeseeablity. I call it foreseeable, based in part on the past but also on the presence of much inappropriately based credit. (I did not foresee it, but from general reading it seems a number of people like Buffett and Robert Shiller did.)

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