The story du jour is SELL all dividend stocks and bonds, because the FED is soon to exit QE. To which I say balderdash. Mr. Market is giving those who wanted in to stocks that are growing earnings and pay a good distribution a chance to BUY. It will not last for long. This is a golden opportunity to take advantage of a story that has holes in it. EVERYTHING has gone down and that is just wrong. Take advantage of this "story" that has lead to somewhat of a correction.
Agree also. So the ten year bond goes to 2.25%, how does that even come close to matching the distribution and earnings power of CLMT? It doesn't, so anyone buying now should be rewarded in the long run. I just wish that I had more to invest.
"So the ten year bond goes to 2.25%, how does that even come close to matching the distribution and earnings power of CLMT"
You may want to rethink your posting. The 10 year at 2.25% is NOT about Calumet. It is a more serious event about not being able to keep rates down with any additional QE.
I would say we are one move from check. The FED needs to move that next piece out of harms way or it is checkmate for the US Economy. Then again, it may not matter anymore what the FED does. They are barely able to hold what is left of the economy together with fraud.
I agree completely. According to Bogle and others, total returns for the duration of the current secular bear market is estimated to be less than 6%. This makes CLMT and other similar companies including utilities a necessity.
And add to that the rate of distribution growth for CLMT, and shares purchased today could be yielding 10% or more cost-to-yield in five years with a simple continuation of the $.03/share/quarter increase in distributions over that time frame. I would argue that a 10%+ yield has a high probability of exceeding bond yields.
And if inflation really takes off, MLPs and REITs will see both their share prices and distributions inflate along with the economy, as they both have pricing power in that economic environment. To not continue paying competitive yields to their shareholders would be disasterous to management's compensation (read CLMT's 10K to learn more about their incentive compensation model). So that makes a cost-to-yield of perhaps 20% or more in five years if we have significant inflation.
As evidence of this model, I offer my own holdings. I purchased my first CLMT shares in late 2008, and my cost-to-yield for those shares is now above 30%. I have purchased many more shares on dips since that time, reinvesting my distributions, and I smile every quarter when distributions are made!