The dividend (in this case it's called a distribution) is the money the company (partnership) distributes to shareholders (unitholders) quarterly (every 3 months) out of money earned from operations. That's about as simple an explanation I can think of offhand. If you need further elucidation, ask your mommy.
I think joe was trying to quote CNBC, but he can't find the quote marks on his keyboard. Doesn't matter.... I take everything said on CNBC with a very small grain of salt. I hardly even listen to myself anymore. It's all lies.
Interesting thoughts. That's the same conclusion I came to before reading your post. It's entirely possible that Loeb is already out or in the process of getting out of AMGN having driven the price up nicely. What's more, AMGN earnings are probably not going to blow the socks off of anyone this quarter, and that will be disappointing to lots of people. Personally, I have the feeling that AMGN has gotten a little over-extended on the Loeb hype. I'm not selling because it would have to drop way too much to cover my taxes to buy it back profitably. For me to sell here and buy back at 120, it would be pretty much a wash after paying the taxes. In fact, I'd probably have to buy it back somewhat lower to make it make sense. And then, the long-term clock would start over again. That makes the decision one of simple arithmetic.
The distribution is higher than I expected. I was estimating a payout of $0.66/unit. Management has previously indicated that the target increase for next year (2015) is 15%, but that's still excellent.
I had sold MCD, which recently announced a dividend increase of about 5%, to buy MMP and EPD. Over all, MMP puts MCD to shame. The yield is only a small part of the story. MMP has run circles around MCD in growth. I should have made this move years ago!
The one thing that EPD has over MMP is that they give a 5% discount on the DRIP if the units are held by a participating broker or Wells Fargo, and there's no fee to unitholders. It may not seem significant, but when you own as much as I do it really adds up. Also, from the standpoint of the partnership, they get to retain the use of the cash instead of paying it out to the unitholders. It's a win/win for both. EPD has the right to terminate the arrangement at any time, but it's been in place for a long time. I'd love to see MMP do the same thing, but I doubt that they ever will.
After the sudden slide last yesterday, I fully expected a crash today. #$%$! AMGN and whole market soaring. I don't get it. Was yesterday's selling all about the shooting in Canada? I've always believed in buying on the bad news, but now we only get a few minutes, or at best a few hours, to pick up bargains. Wait overnight, and the bargains are all gone.
I'm not sure that there's a direct benefit or detriment to earnings from oil price changes, but I see it as an indicator of oil demand which in turn effects the volume of oil and products going through the system. One theory is that lower price causes an increase in demand. I see it from the other side; lower demand causes lower price. I suppose that lower demand would also cause an increase in storage demand. It's complicated, but it depends on whether you believe in the economics of supply and demand pricing. That said, I do believe that a more permissive export policy would benefit MMP significantly. EPD has already gotten export permission for certain products, and that is likely to provide a big boost to their earnings. So much so that EPD is acquiring OILT. (Of course, MMP and EPD are totally independent of each other, but the business models appear to be very similar.)
Check out Cocrystal. OPK and Frost own ~48% of Cocrystal. It looks like they may have developed a quick screen for anti-virals to combat Ebola. This could be significant for OPK.
An argument can be made for and against a break-up. AMGN stock has underperformed the rest of the sector badly for many years. Personally, I doubt that it'll happen, but there's nothing wrong with starting the discussion. I don't see how Loeb blew anything for anyone by doing so.
If this is a political rant, I suggest that you visit the GE message board. This is the Amgen board. Let's keep it that way, please.
Unfortunately, McDonald's is not the company it was in the 1980's. It's vastly larger and more global. The problems involved in turning around a company the size of MCD are not easily remedied. Will investors, particularly institutions, have the patience to sit on dead money for as long as a turnaround will take? An activist investor with extremely deep pockets might be able to make some changes, but will they work? MCD is still the same, old boring company that it was 10 or 20 years ago. I refuse to eat there, and I like to eat. I was in the stock from the very beginning. I bought 50 shares for my wife on the original IPO and rode it until very recently. Her original 50 shares eventually became 9600 shares. The annual dividend became hundreds of times greater than the total original cost of the stock ($1250). That doesn't change the fact that MCD has huge problems, as evidenced by the lousy earnings and revenues. I had intended to hold it until I die to give my estate a very valuable asset at a stepped up cost basis. I finally decided that there are much better opportunities elsewhere, and the cost of the taxes was a small price to pay to get a divorce from MCD. I was never in love with the lousy food or the ambiance, and it just got worse with age. There comes a time when one just has to move on to greener pastures.
Yea, but the pop was very short lived. Zacks is almost as big a disaster as Cramer.
A thought came to me in the middle of the night about the plunging price of oil. I'm wondering whether it's possible that the U.S.and Saudis are in cahoots to drive the price of oil down to punish Putin and put the screws to ISIS. That would kill two birds with the same stone, so to speak. If that turns out to be the case, which we'll probably never know for sure, it would mean that oil will surge higher once they stop artificially depressing the price. When the price of oil turns around and starts moving higher - which it inevitably will - MMP will likely be a huge beneficiary. One thing I've learned from experience is that cheap oil and gas are temporary aberrations. (When I was a kid and got my first car, gas cost 27.9¢/gal. "High test" was 30.9¢. The car, a 1968 Rambler station wagon had fully reclining seats that turned into a double bed. A lot of girls got a first-hand demonstration of the utility of that feature.)
I was buying like crazy early last week as soon as I heard Cramer warning of a "treacherous" market. That was the signal that it was time to load up on the bargains that were created by buffoons like Cramer. Those who missed the party will be kicking themselves very hard as they watch the names that they sold last week soar.
The other name that I was buying heavily last week, EPD, has come roaring back even stronger than MMP. EPD and MMP are the only MLPs I presently own.
Interesting. I wasn't aware of the SPY status as a "unit investment trust", thereby making it ineligible for DRIP. IMO, that's a severe negative when compared against VTI. I've reached the point where virtually all my fund money is in only 2 Vanguard funds - Capital Opportuinity and VTI - plus the Primecap Odyssey Aggressive Growth Fund. I used to follow, more or less, Dan Wiener's Adviser letter, but I finally gave up on him. IMO, his service is not worth the cost. Unfortunately, the Vanguard funds that are run by Primecap are presently all closed to new investors, and they all have a cap on new money from old investors. For the first time, Primecap closed their Odyssey Aggressive Growth Fund to new investors in February of this year. Their record has been phenomenal, so I guess it was too much of a good thing. As far as I know, the only Primecap funds that are still open are their Stock Fund and their Growth Fund. Both can be bought directly from Primecap or through Vanguard Brokerage Service. They've both been decent performers, but they don't come close to the Aggressive Growth Fund. Unlike most funds, all of the Primecap funds have handily beaten the broad market indexes, so they're probably worth a look. IMO, VTI is the ideal fund for new investors with limited experience as well as more knowledgeable investors who just don't want to be bothered or burdened trying to pick and choose. Whenever I do a comparison of all the Index fund offerings available, VTI consistently rises to the top. I've been doing this for well over 50 years and was in the securities business from 1959 to about 1980.... for what it's worth.
When you see MMP drop 9% it's screaming BUY, BUY, BUY! That's why the chart sometimes looks like shark's teeth. The drop to $66.36 last week was the best buy I've seen in this whole market correction. Have open orders in well below the market and use the big spreads to your advantage. Don't hold your breath waiting for the same thing to happen again anytime soon. Those who sold MMP in panic are already kicking themselves, and they'll be kicking a lot harder as they watch it get back on track to new, all-time highs above $87.50. Patience and a cool head will be well rewarded.
You're absolutely correct about irrational sellers. Put the emphasis on IRRATIONAL! Buffoons like Jim Cramer like to sow the seeds of panic in order to get attention. They thrive on creating their own news on CNBC in order to sustain their ratings. It costs them nothing to be wrong, but it does cost those who succumb to their fear-mongering. Cramer et. al. did, however, create a fabulous opportunity for level-headed investors to pick up some terrific bargains.
Here's my take. From the intraday high to the intraday low, the broad market dropped almost exactly 10%. By definition, that's a "correction." The market may re-test the recent lows, but I believe they will hold. Unless something untoward occurs, we will be in for a brief period of consolidation which will open the door to a full-blown resumption of the secular bull market we are presently in. MLPs trade very much in their own universe, as evidence by the trading last week. Some corrected by well over 10%, but the reversal was just as dramatic as the sell-off. Take a look at MMP, as a good example. From the recent intraday high of $87.50 to the intraday low on Tuesday of $66.36, it corrected by well over 10%. Within 3 days, MMP was back up to $81.48. Some MLPs have very thin markets that provide unusually wide spreads that can give patient traders some great opportunities to grab bargains. It takes some guts (and cash), but having open orders, laddered down, well under the market, can prove to be extremely profitable. When the price starts to collapse, don't panic and cancel your orders. Leave them alone. Don't let buffoons like Jim Cramer cause you to panic. Set up your own game plan, and stick with it. Stop watching CNBC. Turn off your computer. Take a laxative. Watch a movie. JMHO.
Until about two weeks ago, I was severely under-invested in stocks. Sentiment had gradually turned overwhelmingly positive, investors were complacent, and all memories of 2008 seemed to have been erased. During the past week, I did some very aggressive buying in names that I had been watching carefully. EPD and MMP had been on my radar, so I put in orders very substantially below the market. As the orders got executed, I put in new orders even lower. I didn't get everything I wanted, but that's part of the game.
When I was selling in 2007, I had a premonition that the country would have a catastrophic mortgage crisis that would cause a stock market crash of biblical proportions. Shortly after LEH went bankrupt, and Obama was elected, I was confident that we were at or near the bottom. We're not going to see another 2008/09 this time around, but this correction was long overdue. The pendulum always swings too far. The trick is to guess how much too far it might go. The talking heads are all using words like "reflex rally" to describe days like Friday (10/17). I take that as a good sign that the correction is nearing its end. The panic selling will eventually turn into panic buying by those who can't afford to miss the next big move up. Money managers don't get paid the big bucks to be sitting on cash when prices are soaring. A year from now, this correction will look like a little blip on the charts that will have been forgotten about by most people. In the meantime, some of the charts look like shark's teeth.
GE will probably increase the dividend again this year, especially given the good earnings. My guess is that it will go to $0.25/quarter ($1.00 annual). The BOD needs to do something to get this stock moving again, and that might help.