Quote:
Originally Posted by Woody
Greg,
I had a question about T.
It looks like the stock price has decreased about 20% to 25% in the last ten years. I see it has a dividend rate of 6%. So my question is: I thought we were looking for stocks with good charts and a good dividend rate? The chart is not good over the last ten years. Is that offset by the 6% dividend rate? I realize a 6% rate over ten years is approximately 60% (not compounded). So the total return would be somewhere close to 35%to 40% over 10 years, which is about 3.5% to 4.0% per year.
Maybe this is what you would consider a "steady eddy" that is a conservative pick due to its high dividend return?" I am just trying to understand the reasoning on selecting T as compared to some other stocks with better charts.
Thanks
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Great question --- and you answered it. It's a steady eddy... where I can take a large position and get the outsized dividend WITH some safety. It's not a stock that goes up and down like a yoyo... It's ACTUAL total return for ONE year is 9.4% --- THREE year is 27.9% --- and FIVE year is 16.1%
Steady - payer - growth that is better than any savings or CD rate - and I can sleep well holding it. It brings stability to the portfolio. There are always "balances" that need to be maintained. I own (using my personal information for examples) a huge position in Annaly Capital Management (NLY) I balance this RISKY high dividend payer with stock like JNJ and T and KO.