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BB&T Corporation Message Board

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  • jim56442 jim56442 Jan 3, 2004 10:28 PM Flag

    Dividends? So????

    "It appears you may have had a current 12-20% +/- annual return on dividends alone.
    Many seek such a return, and I could sit on that myself, but hope you find the investment vehicle you seek."

    Mike J

    Mike

    My replies were all directed at your original post to Cree which is above. Think I've proved the point that the 10 year return on dividends has not even been close to 12-20% annually.

    On your statement about MSFT that is exactly what you are doing on using an investment price of 10 years ago and then comparing current dividends to the original purchase price. Just my opinion.

    The big question is what is my current return on an annual basis? The answer to that question is that if you bought this stock in the last 5 years or so the annual return on investment has been horrible. On Cree's stock he probably would have been considerablely better off if he has sold the stock in 1998 and invested the proceeds somewhere else.

    If what you say is true, then all Cree has to do is find a stock that pays a better dividend rate then BBT. That is not hard to do as BAC is one. If he buys BAC which is about twice the price of BBT he would receive a dividend of $3.20 verus $2.56 for BBT on two shares in 2004. Both would have the same tax rate. Which would you prefer to own? $2.56/$76.60 equals a 3.3%return $3.20/$79.09 equal a 4.0% return

    I agree with your last statement. The correct approach for each of us is what puts the most money in our pocket for what we have invested.

    By the way I'm not an accountant. Just want to know what I make and what makes me the best returns.

    The really correct way to judge any investment in my opinion is what was it worth on Jan.1 and what is it worth on Dec.31 of the same year. If it is $38 on Jan. 1 and ends the year at $38 all you have made is the dividend. So one should really figure he has an investment of $38 in the stock with no appreciation on his capital for the year except the dividend on the $38 price. The reason for this is the fact that you could sell the stock for $38 and place it in any investment vechicle. $1.28/$38 is a 3.36% return for the year.

    In any case I'd like to thank all the people on the board for their input. More information equals a better decision.

    Yours for better investing and hope your day goes well.

    Jim

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    • "It appears you may have had a current 12-20% +/- annual return on dividends alone.
      Many seek such a return, and I could sit on that myself, but hope you find the investment vehicle you seek."

      My bad. Should have deleted the "have had" and referred to go forward basis. That was my initial intent.
      Whoops.

      "The big question is what is my current return on an annual basis? The answer to that question is that if you bought this stock in the last 5 years or so the annual return on investment has been horrible. On Cree's stock he probably would have been considerablely better off if he has sold the stock in 1998 and invested the proceeds somewhere else."
      Yup. And hindsight has 20/20 vision, 15/20 with Laser surgery. :-)

      "Which would you prefer to own? $2.56/$76.60 equals a 3.3%return $3.20/$79.09 equal a 4.0% return"

      Truly can't answer that. And once again, we are mixing living in the past with the present, i.e., comparing an old BBT buy with current buy opportunity in BAC. No?
      Also overlooked in the "hooey" is the detail of the type of account. I have Roth, IRA, and taxable cash accounts.
      Hard to take 15% capital gain tax hit + brokerage fees on a 10 year gain to get the 21% increase in a taxable account? I think so, unless I have losses to offset, because first year dividends wash due to 15% decrease in capital to invest.
      In a Roth or deferred tax account, I probably would move.

      And I think we've beat this one to death.

      Let's all have a great week,

      Mike J

      • 2 Replies to mikejaquish
      • I know it's been beat to death, but I gotta take myself to task.

        Of course, LT capital gain tax would only apply to the gain. Duh! But still....

        My bad, again. Gotta get the caffeine in balance...

        If we aren't having fun, we're doing it wrong,

        Mike J

      • Welcome Mike. You've added to our group!

        As I've said many times on this board, anyone who uses anything they get here to make investment decisions is making a mistake. This is, after all, entertainment. Now it may be fun and there often are comments that make me think, but I still realize the Yahoo boards for what they are and are not and I hope everyone else does too.

        Again, thanks for your input to the board. You and particularly jim have been interesting reading.

        Regards....

        Stock

        PS - I was an engineer - now retired. I worked with numbers, of course, but my accounting comes from learning on the job. That's why it is only a little bit accurate!

 
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