Today's upgrade by Zacks is welcome, but it worries me. I've found Zacks' opinions to be less than useless. They're sometimes downright disastrous. Moving MMP from #3 to #2 rings alarm bells. Now I have to spend some time reassessing my investment in MMP to decide whether owning a Zacks #2 stock is worth the increased risk.
Sorry Zacks. Your recommendations suck! Oh, well... it could have been worse. Cramer (the kiss of death) could have started recommending MMP. That would be fatal for MMP.
I wasn't trying to sound snarky. Whoever asked this question could have gotten the answer for him/herself in seconds instead of waiting for someone to answer the question here. Some people just don't know where to look for the answers to their questions until someone points it out. I was trying to offer simple navigation instructions to make his/her life easier in the future. Sorry if this offended you.
That said, I have a question for you: Where can I find a list of other companies (like EPD) that offer a discount incentive for participating in their DRIPs? EPD is the only company and/or partnership that offers such a discount along with a commission-free DRIP that I'm aware of, but I presume there might be others.
TRV continues to gain vs. CB. Looking back over the past year, the out-performance of TRV has been dramatic. I like the fact that CB is very conservative in the percentage of earnings they are willing pay out in dividends, but the yield offers very little incentive to buy the stock. The miniscule annual increases seem to be nothing more than a way to remain on the list of "dividend aristocrats." Without some appreciation in the stock, CB is really trying my patience. After many years of solid growth, CB seems to have hit an impenetrable plateau. Will it ever see triple digits?
When I sold my entire PCL holding at $50, I was sure the company was in big trouble. They had just announced the secondary in 2013, and it struck me as a bad deal. The stock is now down to about where I originally bought it. I keep watching for an opportunity to get back in for another move to 50, but I'm still not convinced the company's troubles are behind it. As long as they're earning less than the dividend, I see the potential for a cut. The widely held notion that the vast land holdings would support the stock has proven to be a bogus argument, at least in the short term. I suggested at the time that PCL holders would be a lot better off selling PCL and putting the money into something like VTI (which at the time was around $85.) The yield on VTI was only about 1.5%, but the shares have appreciated by around 20% (total return.) I strongly suggest that holders of PCL do a chart comparison against VTI to see how they compare. I'm not always right, but this one was a no-brainer. I learned long ago not to fall in love with a stock as so many holders of PCL seem to have done. Best of luck to you all.
On the whole, I tend to agree with you, BUT.... There's no question that MMP has far outperformed KMP, and most other MLPs for that matter. That said, does it really deserve the huge premium it has over KMP? (I consider the lower yield to reflect a premium price.) Based entirely on past performance, it looks relatively expensive. I own MMP, but not KMP. The only other MLP I presently own is EPD, which also has a somewhat low yield compared to other MLPs. I tend to prefer growth over yield. I don't need current income. That's why I DRIP. EPD gives me the added bonus of a 5% discount on DRIP purchases. I have open orders in place to buy more MMP at lower prices, but I have no intention of buying KMP at any price. The simple fact that KMP has such a high yield compared to MMP makes me suspicious and cautious. What am I missing? (Just added 1000 MMP today at $82, and I'll buy up to an additional 6000 more if the price drops a little from here.) The MMP long term chart is truly a thing of beauty!
As my mother used to ask, "What's not to like?" I just bought at $82 and have more orders in to buy lower. I sold the other day at $86, so this replaces that lot. I normally don't like to trade in and out, but the pop to $86 seemed to happen too fast and for no apparent reason. This time, I'll likely stick with it. Every time I look at the long term chart, I can't help thinking it's the prettiest chart I've ever seen.... up, up, and more up. I'm a total believer in climate change and the long-term consequences, but the remedies will take many years, even decades, to be implemented. If the causes of global warming could be eliminated overnight, I'd gladly take the loss. In the meantime, I'll welcome the profits from moving the products safely and efficiently. Thanks to whoever sold me their 1000 units at $82. No, you can't have them back.
The MCD website tells me nothing that was not already known for several months. The cockamamie scheme to borrow billions of dollars to use to give to shareholders smacks of desperation. Continuing to open more restaurants when they can't run the ones they already have is worsening their problems. Increasing reliance on countries like China and Russia could be a recipe for disaster if the political situation in those countries explodes. China is becoming increasingly confrontational over control of oil thought to be under the South China Sea. The U.S. Navy is in a standoff with the Chinese Navy that could turn nasty in a showdown. Food supplies in China have proven to be unreliable. The Ukraine situation could prompt Russia to permanently close all of McDonald's restaurants for any or no reason. McDonald's is not vital to the Russians and could turn into a pawn in the escalating war of sanctions. Most importantly, I don't trust anything this management team says in their P.R. presentations.
The USA Today article, 5 Reasons Why McDonald's is Falling Apart, is just 1 of many similar recent articles that blast the company for failing to keep up with the times and the competition. The company has grossly overbuilt and expanded far beyond their capacity to properly control the business. Bigger does not necessarily mean better. Problems with food suppliers is just one of many serious issues that have to be brought under control to restore public confidence. I'm afraid that as an investment, McDonald's best days are behind it. The recent string of quarters with disappointing numbers could be just the beginning of many more to come. The "bad winter" excuse was never believable, and subsequent quarters prove it. Fifty years from now, business school textbooks will have a chapter about McDonald's calling it the company that crashed under its own weight and incompetent management. The bigger they are, the harder they fall.
This was the smallest dividend increase in many years, both in percentage and dollars. In fact, I can't remember an increase this small since they first started paying dividends in the mid 70's.
You read my mind. I didn't think there were any sane people left on this board.
In fairness to the present CEO, I've long felt that his predecessor left the company it poor shape. He was way overrated for his handling of GE, and Immelt had to pick up the pieces. The moment I heard that GE had bought a bank in the sub-prime mortgage business, I dumped my entire stake. I bought back in in late 2008 when it was in single digits, and I've been buying more ever since. Although I now have a big profit, I'm still disappointed with the recent stock performance. The thing that keeps me on board is the dividend that has increased nicely from $0.40/year to $0.88.
That brings me to my question: What do people anticipate the B.O.D. will do with the dividend going forward? My personal guess is that it will be raised to $1.00/year. I'm being conservative, but the current B.O.D. is also very conservative. I'd rather see the company use the money in a more productive way than to give it to the shareholders, but the psychological impact on the share price of a $1 dividend rate could be very positive. What's more, getting the share price up would make acquisitions less costly.
I had it just about right. If 2015 is another year like this, the increase next year will be about 4 cents again. They have the money to pay more, but they're smart to hang onto it. Things could get worse before they get better.
Bought more at $81 on the sell-off. I don't like it when stocks only go up. They have to go down some of the time to provide buying opportunities. I sold all my MCD at par and moved the proceeds to MMP in the mid-70's. For once I got it right on both sides. I suspect MMP might split in the foreseeable future, not that it really matters. Just keep the faith.
They usually raise it at the end of the year. MCD has a history of raising the dividend every year since they started paying dividends, so it's safe to presume they'll raise it again this year. Keep in mind that they can raise it as little or as much as they want to stay in the Dividend Aristocrat club. There's no minimum. Nothing is guaranteed, but they have plenty of money to raise again. I would not expect more than a few cents annually given the poor earnings performance lately. The last thing they would want to do is to be thrown off the Dividend Aristocrats list.