Not exact matches
Brian's monthly recommendations allow his clients to dollar
cost average into highly rated stocks which are long term
dividend yielding winners trading
at temporarily depressed
prices.
I like to do covered calls against
dividend paying stocks to enhance the
dividend and sell puts
at lower
prices as a way to dollar
cost average.
Their
cost of capital is a function partly of low interest rates and part of the implicit share
price is a function of the fact that investors have looked
at equities for
dividends rather than bonds for yield because the bond market is so expensive.
I like to do covered calls against
dividend paying stocks to enhance the
dividend and sell puts
at lower
prices as a way to dollar
cost average.
Brian's monthly recommendations allow his clients to dollar
cost average into highly rated stocks which are long term
dividend yielding winners trading
at temporarily depressed
prices.
(If I purchase today
at 3 % and tomorrow the stock
price increases so it yields 2.5 %, I still get 3 % on that money) The yield matters when you purchase it and should be a factor if you are investing for income as it determines the
cost of capital for the
dividend received.
If you got the shares as part of a
dividend reinvestment plan, the
cost basis is their
price at the time of purchase.
Then there's also the more unsavoury aspect, personal greed: Incentives and compensation, particularly in the US, are so lucrative and so biased to raising the EPS and share
price at all
costs that share buybacks become, consciously or unconsciously, a compelling priority for boards / senior management — often to the detriment of shareholders, EVA and / or even the
dividend.
For list 1, the quality companies
at low
prices, a virtual cash portfolio of # 12,000, ignoring trading
costs and including
dividends, is valued
at # 14,385 today.
So, that's my preferred measure for how much has the underlying value of the firm increased: growth in fully diluted tangible book value (ex-AOCI), adding back
dividends, and subtract out net equity issuance / buyback measured not
at cost, but
at the current market
price.
Growth in fully diluted tangible book value (ex-AOCI) is a good measure of firm performance, if you add back
dividends, and subtract out net equity issuance / buyback measured not
at cost, but
at the current market
price.
If the stock has dropped significantly then, yes, it might lower your
cost basis; if the shares are purchased
at a higher
price, then the reinvested
dividends will actually increase your
cost basis.
Although Brooks favored using the tax revenues to make tax cuts on
dividends and capital gains permanent, a stance
at odds with CTC's progressive - tax - shift position, he
at least grasped the need to reflect climate - change
costs in fuel
prices.