3/14/11 Lerner Scott E
General Counsel Sale 11,500 18.13 – 18.13 35,261 $208.5 K
Lerner Scott E
Officer Planned Sale 11,500 -- – -- -- $207.2 K
3/4/11 Cantwell Robert C
Chief Financial Officer Sale 30,000 17.66 – 17.66 177,591 $529.7 K
Of course, when comparing yields also factor in:
For NLY: Interest Rate Risk/Sensitivity (though I'll admit short term rates will remain low for a while longer)
For GABUX: How much is ROC - ever wonder how a utility fund can pay such a large div?
For VGR - Payout ratio - is the div rate sustainable.
All I'm familiar with of the names you mention.
You have made a nice attempt at education. I have observed this mindset before and have never seen it altered.
Even items such as the lost of ~3% a year due to inflation will not alter the mindset.
Today there aren't many true high yielders out there but when comparing to 4% its easy to both double the income (yield) as well as have the possibility for cap gains.
NLY at 15%, GABUX at 13%, VGR at 9% plus a yearly 5% stock dividend, GGN at 9.3%, FFC at 9%, EHI at 8.9%, CLMT at 8.7% and many others ... the opportunities versus 4% are out there if one looks ... if you want Treasury yields/safety then why not just buy them.
BTW, seems you are an MLP guy .. might wish to review VNR, MWE and CLMT. Unfortunately I bought MWE and VNR Dec 2008 and VNR @ $5.31 sporting 40% distribution versus todays $30.40 and distributing 7.66% makes it hard to say these are bargain prices today but I believe CLMT at or under $21 is a good entry (CLMT usually gets near this level after pay date).
Apologies to BGS holders, this thread has gotten far afield from my answering the guy who questioned why sell BGS. I again state that BGS has excellent management and MY reasons for selling had nothing to do with their vision, focus or execution ... was strictly driven by my perception that the stock was fully priced and way below my distribution requirements as an LTB&H income stream investor.
Luck to longs
There are phone companies and utilities that are stable entities that have higher yields. There are also MLPs that have higher yields and are as secure. Many MLPs ship fuel through pipelines or in ships and have long term contracts so they are very stable and did not cut their distributions(dividends) even during the great recession. The advantage of many MLPs is that they are growing faster than BGS is projected to grow, they pay higher yields and the tax is deferred until you sell it. Some of the stable MLPs that come to mind are TGP (growing their distributions about the same as BGS' earning are growing with almost a 7% yield) and EPB (about 5.3% yield and projected distribtion growth around 14% for the next several years).
I understand that, but, what is the probability that my 10.8% yield is going to go down (because BGS cuts its div) versus the current 9.x% yield'er cutting it's dividend... I'm pretty darn secure in my 10.8% w/ BGS, no need to take unnecessary risks. As for taking more risk, I've other $$s w/ professional investors who manage that pool of money.. They're up 32% YTD so far...
Wrong --- yield does not = return. Yield: The income one receives from an investment, rather that its capital appreciation. The yield is calculated as the coupons or dividends the investor receives in a year expressed as a percentage of the cost of the investment. So... my 10.8% yield will always beat a 9.x% yield.
Plague2040 - Look at it this way. If you cashed in on BGS and invested in a stocl with a 6% yield, you would increase your the dividend income by 50%! If you picture currently having 10.8% yield on the cost of the original investment, you could turn it into a 16.2% yield without having to add any more cash to the investment!
You say yield then you say return. At one point you tripled your total return based on share appreciation alone. Selling and buying a stock(s) with a slightly lower yield is not necessarily a bad move if you think there is upside to these new stocks.
<then my 10.8% yield today will always beat the 9.x% yield>
He is really talking about valuation. If you sell BGS (the current 4% yielder) your new position may become a 4% yield through price appreciation. You have no such further chance with BGS.
That makes no sense -- I personally purchased BGS at $7.75/sh, so at a dividend payout of $0.84/sh my yield is 10.83%.. which beats the 9.x% for the other stocks you were mentioning (and is by no means the 4.x% yield someone buying BGS today receives)... so I'm not sure I follow your logic. I'm earning a higher return on my money in BGS at 10.8% than if I invest in another stock with 9.x% yield. If both companies have same bottom line growth prospects, therein, roughly the same free cash flow for distribution growth prospects, therein, same growth in dividend, then my 10.8% yield today will always beat the 9.x% yield.