Jackal: Everyone wants to buy cheaper. The question is are you buying for short term trading or long term growing investment income? Are you planning a small initial investment to add to from time to time or a "one shot winner take all" deal.?
Are you a gambler or investor.?.
The short answer to your timing question. I don't know if the price is going up or down in the near future and neither does anyone else.
History has shown us that they have paid a monthly dividend for the past 28 years without a miss. You have to decide if the chances are they will continue paying this monthly dividend or not
The $0.78 annualized dividend currently costs $10.63. that would yield you 7.33772% on your investment (More if you drip the dividends because your adding shares every month that pay more dividends)
You have to decide if that is a worthwhile investment for you or wait for a lower price which may or may not come and lose the dividends that will be lost by waiting.
Nobody said this is easy. But thats how it works
IMHOI---You DON'T want to do your own taxes. It is much too complex. I believe you should be spending the time on doing DD and leaving the tax preparation to a qualified tax preparer. You noticed I said "QUALIFIED"
Talk to you friends and associates and inquire who they use and for how long and would they reccommend them?. Then GO INTERVIEW THEM. Ask general questions regarding tax areas of your interest. Ask how long they are in business and how much staff they have AND HOW MANY CLIENTS THEY HAVE. Another question to ask --What is client retention rate.
You probably do more DD when you shop for an electronic gadget.
I believe this is more important.
Hi Jackal: I think you are asking the wrong questions to the wrong people.
Are you retired? Near retirement? Owe debt?
Goals-Should be To get a portfolio large enough that will generate enough income that will pay all your expenses and taxes from that income. It should be large enough to increase your income at least 5% per year to cover the inflation the government says we don't have.
Unfortunately Getting turned off to investing opens you up to the world of the "Bernie Madoffs" who will be glad to help you. So the alternative is TO LEARN TO DO IT YOURSELF and only ask your accountant general questions on tax law (which he can look up in a book) and not specific questions like should I buy 100 shares or 1000 shares for the income to reach the next tax bracket
I hope this will be of some help to start
I have growing positions in DNP for about a year. Here are some other funds that are high quality and been around for up to 90 years- GAM GAB CET ADX-Research those for INCOME AND GROWTH with dripping.
I am in a few MLP's for tax deferred income and growth. MWE and ETE
2 BDC's --ACAS and PSEC Each has their own story to do DD on
ITI a $1.75 stock to research that I believe has a very bright future
I own XOM and dripped it for 11 years. Then we retired 11 years ago and spend the divvies.
Whatever size your portfolio is here are a lot of ideas Even more than you will need.
Thanks for the good wishes. Don't be surprised about the increase in expenses. I don't know where you are in the working or retirement cycle but IF YOU ARE SUCCESSFUL IN THE MARKET there is a lot of planning available today that wasn't available years ago. We didn't have ROTH IRA's to shelter income and when it became available later we weren't programmed to pay the tax and put the money in a ROTH. We were also programmed that taxes would be lower in retirement so the tax burden would be less later. In my case this turned out to be totally false. I am paying more in taxes today than when I was working. The IRA RMD keeps increasing my taxable income every year. This year the RMD will be up about 18% That "X" + 18% will increase my AGI (Line 37) raising the threshold for deducting Itemized Deductions-Requiring Taxes to be paid on 85% of SS sometimes qualifying for the AMT.
The best words of wisdom I can give is to have no Debt. people carry a mortgage on their home believing the interest is a good tax deduction --And then if you are successful your income will not allow the deduction. Last year my wife and I ran up $10,000 in dental bills that wasn't deductable
Taxable income belongs in a ROTH if possible or IRA.
Tax deferred income (MLP's) belong in a Taxable Account. Definately not in a ROTH or IRA.
Try to convert as much of your IRA's to ROTHS before you retire
Just a few things for you to think about BEFORE RETIREMENT.
===== Your take on BBEPs big jump==== I don't own it. So I have no opinion. By the way about 15% of DNP's portfolio consist of MLP's and DNP was trading at a 52 week high today.
Here is a stock that has been grinding out steady Monthly income for the past 28 years Month after month after month.
DNP is a closed end fund that started in Jan 1987 at $10.00 a share. They paid $0.06 a month for about 11 years and then raised it to $0.065 a month and have been paying month after month after month without interruption through the good times-the bad times and the ugly times. The stock today is about $10.60 and it goes X-Div tomorrow 1/28/2015. For those that were fortunate to buy 100 shares at the IPO and drip the dividends today you would have over 1100 shares without any further investment. Anyone adding on a steady regular basis COULD HAVE BUILT A FAMILY DYNASTY. The key word to DNP is patience. The trading range over the past 52 weeks has been $9.41 to $10.63 And over the entire 28 year history of the good-the bad and the ugly it has had a low of about $6 and a high of about $13
Another interesting DNP tidbit is on the drip program --If the stock is selling above NAV (Which it does MOST of the time) the company discounts the reinvestment price as much #$%$-but not below NAV.
The annualized dividend is $0.78 and the current price is $10.62. That translates to a yield of 7.344%
Yesterday's closing price was $10.62 and the NAV was $10.51 for a premium to NAV of 1.05%. I'm sure you also noticed that currently the Dow is down about 350 points and last I looked DNP is unchanged today.
There might be some interest in this by some conservative income investor out there.
Thats right. If you are interested in getting the next dividend you will have to buy tomorrow (1/27/2015) because DNP will trade X-Dividend on Wednesday 1/28/2015. If you want to drip the dividends into additional shares you should probably call your broker to set up the drip BEFORE DNP goes X-Div. You should also inquire if you want to drip, if your broker will set up the drip through DNP TO TAKE ADVANTAGE OF THE DISCOUNT WHEN IT IS AVAILABLE (I'm not sure if all brokers allow the discount)
If you are in the accumulating stage of your life AND HAVE PATIENCE this could be an excellent investment for you
I back-tested the DNP dividends from inception in Jan 1987 to now. If you bought 100 DNP shares a$10.00 and reinvested all dividends you would have over 1100 shares today without adding one additional pennie all that time.
It is reported on their website at about 8:00 AM before the market opens which gives you the NAV of the previous market close.
I had asked why they don't report more quickly and was told. They aren't interested in short term or day traders. They want long term investors.
They are an income fund that has been paying $0.065 per month per share for the past 18 years through good and bad times without a miss. Before that they paid $0.06 per month per share for about 10 years through good and bad times without a miss. thats what they do.
Value Line made the following statement in December regarding DNP----
"DNP shares should be an attractive option for conservative accounts. Bas on its primary objective of current income, the fund will pay$0.065 per month per share of common stock. Total distributions, when annualized, are well above average."
In the last few years DNP has invested some money (Currently 15%) in Master Limited partnerships. The distributions from MLP's are NOT TAXABLE DIVIDENDS but is a RETURN OF CAPITAL. A return of capital is not usually taxed when received. It is usually taxed upon sale of the MLP and it is mostly taxed as capital gains at that time.
MLP's are a tax shelter and is usually beneficial to the investor. However it is a little more complex than the usual taxable dividends. DNP will issue a press release in the NEAR FUTURE on the taxability of the 2014 dividends/distributions. Your broker will issue to you a 1099 listing the taxable portion of your DNP income that should be reported to the IRS. The return of capital SHOULD NOT BE REPORTED ON THE 1099 AND THEREFOR WILL NOT BE REPORTED TO THE IRS.
I've used that word many times in the past
My wife and I are retired over 11 years. No pension just SS and returns from our portfolio- Here are some figures that people investing for future retirement might be interested in as to what they will face after they cash their last paycheck.
1) For every $1 we spent in 2003, we spent $2.15 in 2014 (The high level was in 2013 at $2.23) So in 11 years our expenses have more than doubled due to inflation and even more important ---in the 11 years of retirement we have spent 2.333X our original low/mid 6 figure starting portfolio
2)I hold only 9 securities currently (Usually 10 or 11 maximum)
3)The SS we receive pays most (but not all) Fed and State taxes. (And the taxes are growing)
4)26.8% of our portfolio is in 2 non-dividend securities for growth.
5) The other 7 securities pay us dividends and distributions to pay our living expenses and the excess (41% in 2014) was dripped into additional shares/units for additional growth
6) Currently sitting with 12.7% in cash due to the current market downturn awaiting reinvestment
7) The common thread is focusing on growth of income which will provide growth of capital and getting the income portion to be more than your expenses so a growing portion of that income can be re-invested into more growth. It is like creating a perpetual motion machine that keeps creating and growing income above and beyond your needs
best of luck
Hopefully the weather information solutions will be the driver for ITI to move up to the major leagues. IMHO it would probably also help ITI if Abbas took a public speaking course. He is difficult to listen to, even if he has a good message to deliver.
If some of the income you receive is not needed for living expenses the excess could be dripped into additional shares to give you a higher distribution each month. If you need the income and can't drip you should be happy that the 7.4% annual return is very good in this low interest enviornment we have how.
====The Board of Directors also approved new phantom unit grants with distribution equivalent rights to the Chief Executive Officer and the other four NEOs. These phantom units are subject to cliff vesting on January 31, 2018. The number of phantom units awarded to the NEOs under this grant consisted of 54,160 phantom units for the Chief Executive Officer and a range of 14,194 to 33,866 phantom units for each of the other four NEOs. These grants were the continuation of the annual long-term incentive plan. This program annually awards three year cliff vesting phantom units based upon the Partnership's relative total shareholder return over the two-year period prior to the grant date compared to the total shareholder return of the industry peer group. The Partnership's relative total shareholder return over the two year period prior to this 2015 grant was at the 57th percentile ranking of the industry peer group which provided for an award of 113% of the target. The Board also established the 2015 long-term incentive award targets for the CEO at 450% of base salary and for the remaining NEOs, the long-term incentive targets are set at 190-425% of base salary. ====
They are still focusing on DCF and unit price performance and distribution growth-----
+++++++The 2014 targets for the NEOs' short-term cash incentive awards were established by the Board at the beginning of the year and were based on performance relative to a combination of several key performance metrics, including: 1) the Partnership's distributable cash flow; 2) the Partnership's total shareholder return (unit price performance and distribution growth)+++++
====The 2014 targets for the NEOs' short-term cash incentive awards were established by the Board at the beginning of the year and were based on performance relative to a combination of several key performance metrics, including: 1) the Partnership's distributable cash flow; 2) the Partnership's total shareholder return (unit price performance and distribution growth) relative to an industry peer group selected by the Board's compensation committee; and 3) achievement of other broad operational and financial objectives. The Partnership's CEO's short-term cash incentive award target was set at 100% of base salary for achievement of base-plan performance goals and up to 200% of base salary for stretch performance. The remaining NEOs' short-term incentive award targets were set at 80-90% of base salary for achievement of base-plan performance goals and up to 160-180% of base salary for achievement of stretch performance.
The Partnership's actual 2014 performance and senior management's execution of the business plan, including the achievement of the key commercial objectives, balance sheet and liquidity goals, distributable cash flow and total shareholder return relative to the industry peer group, was determined by the Board to be above base plan performance goals and objectives. Recognizing these factors, the Board approved the CEO's short-term cash incentive award at $1,000,500 and each of the remaining named executive officers' short-term cash incentive awards ranging from $496,800 to $596,160. The Board also established the 2015 short-term cash incentive award targets for the CEO at 100% and 200% of base salary for base plan performance and stretch performance, respectively, and for the remaining NEOs, the short-term incentive targets are set at 80-95% of base salary for base plan performance and 160-190% of base salary for stretch performance. ===
More people lose more money investing because they get and use wrong information ,and the fears that creep into their minds from that wrong information they get.
====Yahoo doesn't think so. They show .40 div and 3.8%. Where do they find their numbers?===
Yahoo is wrong. The money rolls into my account dripped into additional shares every month at the rate of $0.065 per share.
They do not average the price. They explained to me previously and I wrote it on Jan 18 they take the closing NAV of the close of the previous day before payment and adjust the amount because they announce a full penny amount and the NAV could actually be from Four tenths below or above that amount===
===THEN WE HAVE SPECIAL SITUATIONS like DNP that give discounts when the stock is selling ABOVE NAV (Which it does most of the time)
This is what they have told me on previous talks with DNP is what DNP does.
The declared payment date was Monday 1/12/2015 The closing reported NAV on Friday 1/9/2015 to the closest whole penny way $10.13. DNP gives a discount of up to a maximum 5% when it trades above NAV.
The actual NAV was actually somewhere between $10.126 and $10134 with $10.13 being the reported whole penny amount.
The shares were issued on a $10.127 basis, which was within that one penny range of $10.13.
Read their annual report and/or then call DNP for any further clarification you may want..
Shares arrived at 4;52 PM applied correctly in all 5 accounts. Dripped price was $10.127 which was below the reported $10.13 NAV as of 1/9/15.
Now I am waiting for Jan 28, 2015 which is the next x-div date to do it all over again for more shares.
Patience wins this battle.
You are right. I knew I was getting into trouble with that " Double Negative" sentence
==== Most companies (NOT including DNP) don't have a drip====
but I was in a hurry and didn't. My bad.
I have called DNP a couple of times over the past year when they didn't post the NAV before the market opening as they normally do and they didn't even know about it. Whoever was supposed to do it, hadn't done it and they didn't even know.
I also asked why they didn't use the X-symbol-X system that most Closed end funds use to report NAV they said they aren't interested in the day traders only the long term investors.
CET is another fund that only reports NAV Friday evening and Month or year end They have been around since 1929 and have been paying dividends in varying amounts every year since the mid 50's Could have built a family dynasty with that one also.