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Saturday, February 28, 2009
* General Electric (GE) Cuts Dividend
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Commentary
Friday, February 27, 2009
* Inegrys Energy Group (TEG): Things That Make You Go Hmmm...
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Based on TEG's actions over the last several weeks, the market was completely surprised by its announcement. On February 17th, TEG issued a news release raising its quarterly dividend $0.01 to $0.68/share. As a dividend investor, I viewed this as a positive development and believed that management would only raise the dividend if it could be sustained. The annualized dividend of $2.72/share is in excess of the high end of its projected 2009 earnings range. Can TEG sustain its quarterly dividend at $0.68/share?
Looking at TEG's cash flow statement, I noted that free cash flow (operating cash flows less capital expenditures) was over three-quarters of a billion dollars negative in 2008, down from negative $154 million in 2007. More alarming is that operating cash flows in 2008 was negative. As I have previously noted in The Most Important Financial Statement, cash from operating activities should always be positive and greater than the company’s net income. Based on data from Morningstar, free cash flow has been negative for the last decade.
One might argue that management is counting on proceeds from the sale of its non-regulated business segment to sustain the dividend through 2009. If that is the case, I hope they have buyers lined up. Generally, these types of sales take time, a lot of time.
For me, the most concerning observation is the trading activity between the time the dividend announcement and the earnings release. In spite of the company's "good" news of its 51st year of consecutive dividend increase, the stock continued to fall on increasing volume. Year to date through February 17th, the stock's average daily volume was 719 thousand shares. From February 18th, the day after the dividend was announced through February 25th, the day earnings was released after the market, average daily volume was 1.2 million shares, or 66% higher. The 1.2 million average shares leading up earnings release were 87% higher than the 637 thousand average daily shares the week leading up to the dividend announcement (2/6 to 2/17). This could lead to an S.E.C. inquiry and/or shareholder suits.
I am all about personal responsibility. Yes, I am disappointed about the company's actions, including its shareholder communications, but I am more disappointed in myself for not spending sufficient time on diligence before purchasing TEG. In the end we will sometimes make bad decisions or have good investments go bad; we just need to learn from it and avoid the most dangerous investment.
Full Disclosure: Long TEG
Tags: [TEG]
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Commentary
Wednesday, February 25, 2009
* Utilities For A Well-Rounded Dividend Investment Portfolio
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Commentary
Tuesday, February 24, 2009
* Financial Crisis: Can You Spare A Dime For My Wealthy Friend?
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Commentary
Monday, February 23, 2009
* 3M Co. (MMM) Stock Analysis
This article originally appeared on The DIV-Net February 16, 2009.
Linked here is a detailed quantitative analysis of 3M Co. (MMM). Below are some highlights from the above linked analysis:
Company Description: 3M Co. is a diversified technology company with a presence in various businesses, including industrial & transportation, healthcare, display & graphics, consumer & office, safety, security & protection services, and electro and communications.
Company Description: 3M Co. is a diversified technology company with a presence in various businesses, including industrial & transportation, healthcare, display & graphics, consumer & office, safety, security & protection services, and electro and communications.
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Analysis
Sunday, February 22, 2009
* Weekly Links - February 22, 2009
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Links
Saturday, February 21, 2009
* My Holdings As A % Of Market Value And Income
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Commentary
Friday, February 20, 2009
* Coca-Cola: A Real Dividend Aristrocrat
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Commentary
Wednesday, February 18, 2009
* Ten Dividend Stocks With 50+ Years of Consecutive Increases
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Classics,
Commentary
Tuesday, February 17, 2009
* Wells Fargo: Things May Not Be Well at Wells
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Commentary
Monday, February 16, 2009
* Paychex Inc. (PAYX) Stock Analysis
This article originally appeared on The DIV-Net February 9, 2009.
Linked here is a detailed quantitative analysis of Paychex Inc (PAYX). Below are some highlights from the above linked analysis:
Company Description: Paychex, Inc. provides payroll and integrated human resource and employee benefits outsourcing solutions for small- to medium-sized businesses in the United States.
Company Description: Paychex, Inc. provides payroll and integrated human resource and employee benefits outsourcing solutions for small- to medium-sized businesses in the United States.
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Analysis
Sunday, February 15, 2009
* Weekly Links - February 15, 2009
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Links
Saturday, February 14, 2009
* Pocket Change Portfolio - January 2009
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Friday, February 13, 2009
* 3M (MMM) and Manulife (MFC) Answer The Leadership Call
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Commentary
Wednesday, February 11, 2009
* The Best Dividend Stocks In The World
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Classics,
Commentary
Tuesday, February 10, 2009
* Do As I Say, Not As I Do
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Commentary
Monday, February 9, 2009
* Stock Analysis: BP Plc (BP)
This article originally appeared on The DIV-Net February 2, 2009.
Linked here is a detailed quantitative analysis of BP Plc (NYSE:BP). Below are some highlights from the above linked analysis:
Company Description: This supermajor integrated oil company (formerly BP Amoco p.l.c.) is based in London and is the world's second largest publicly owned oil company and the fourth largest U.S. refiner.
Company Description: This supermajor integrated oil company (formerly BP Amoco p.l.c.) is based in London and is the world's second largest publicly owned oil company and the fourth largest U.S. refiner.
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Analysis
Sunday, February 8, 2009
* Weekly Links: Carnivals & Articles - February 8, 2009
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Saturday, February 7, 2009
* Progress Update - January 2009
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Progress
Friday, February 6, 2009
* Nine Companies Bucking The Trend And Raising Dividends
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Commentary
Wednesday, February 4, 2009
* The Dividend Stock Life Cycle
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Commentary
Monday, February 2, 2009
* Stock Analysis: Lowe's Companies, Inc. (LOW)
This article originally appeared on The DIV-Net January 26, 2009.
Linked here is a detailed quantitative analysis of Lowe's Companies, Inc. (LOW). Below are some highlights from the above linked analysis:
Company Description: Lowe's Companies, Inc. and its subsidiaries operate as a home improvement retailer in the United States and Canada. The company offers a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance.
Company Description: Lowe's Companies, Inc. and its subsidiaries operate as a home improvement retailer in the United States and Canada. The company offers a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance.
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Analysis
Sunday, February 1, 2009
* Weekly Links: Carnivals & Articles - February 1, 2009
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