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Here's a Stingy Stock That Should Raise Its Dividend

Here's a Stingy Stock That Should Raise Its Dividend

(Dollar Photo Club)

Charles Sizemore By Thursday, 15 September 2016 07:24 AM EDT Current | Bio | Archive


The following is an excerpt from 7 Dividend Stocks That Owe You More Money.

Nothing is more frustrating to me than stingy dividend stocks.

And this is coming from me, a man with a well-deserved reputation as a cheapskate. (I prefer to think of myself as “frugal,” but my friends and family have other choice words for me.) Yet as miserly as I am, I know when I’m beaten. I once had a friend that was tired of paying for lawn service. So he bought a baby goat at a flea market, had the goat eat his grass, then returned to the same flea market and sold the now fattened goat for a profit.

But while I appreciate extreme frugality, it’s not something I tolerate in dividend stocks. I expect my investments to be lavishly generous… which means paying respectable dividends and raising them over time.

Alas, we have a lot of Ebenezer Scrooges out there in corporate America that either don’t pay dividends at all or don’t pay nearly enough of them. Realistically, not every company can be a dividend-paying powerhouse. Cyclical companies like General Motors Company (GM) or Ford Motor Company (F) have wildly erratic businesses and need to keep a little extra cash on hand for the lean years. (Of course, even then, weak share prices have made the pair of them look generous via nearly 5% yields.)

But companies with consistent revenue streams have no excuse for being tight fisted with their investors.

You can think of this as an exercise in naming and shaming. These seven miserly dividend stocks need to open their wallets a little wider and share the wealth with their long-suffering shareholders.

Dividend Stocks That Owe You More Money: Visa (V)

At the top of the list is global payments leader Visa Inc (V).

Visa sits at the intersection of two of the most powerful trends in the economy today: the rise of the cashless society and the rise of the emerging market consumer. With every passing day, more people around the world are swiping their credit and debit cards in more places. And as the owner of the largest global payments network, Visa sits at the middle of this, like a toll booth operator.

Yet Visa has thus far failed to share its success with its shareholders. The dividend yield on V shares is a pitiful 0.7%. It’s not for lack of resources. Visa’s dividend payout ratio is an extremely low 23%.

Why the stinginess? I don’t know. Capital expenditures are a pittance. Visa could double its dividend tomorrow and still have a reasonable cash cushion.

If you own this stock, Visa owes you more money.

To read the rest of the article, please see 7 Dividend Stocks That Owe You More Money.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. 

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. To read more of his work, CLICK HERE NOW. 

Disclaimers: If I mention a stock favorably, you should assume that I have a position in it, both personally and in client accounts.  This does not, however, automatically mean that you should own it. I am expressing my opinions in this newsletter, not offering individualized financial advice or soliciting you to buy securities.  See full disclaimer here.

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Nothing is more frustrating to me than stingy dividend stocks.
stock, dividend, visa, invest
Thursday, 15 September 2016 07:24 AM
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