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Dividend Talk
EP #181 | 2024 Earnings Season has Finally Started | + lot's of Dividend Hikes ๐ฅ
Jan 27, 2024
The podcast discusses the start of the 2024 earnings season and the anticipation of dividend hikes. They analyze recent dividend hikes from companies like LVMH and ASML. There is a discussion on financial performance and market response, as well as dividend payments, cash flow, and shareholder growth. They also talk about retirement strategies, investing in Chinese stocks, comparing high dividend versus low growth stocks, and evaluate Visa and ASML.
01:16:43
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Quick takeaways
- Earnings season has started, leading to dividend hikes by some high-quality dividend growth stocks.
- Investing in Chinese stocks with complex corporate structures listed in offshore jurisdictions carries elevated risks.
- Uneven dividend payouts throughout the year can impact retirement budgeting, but setting aside funds at the beginning of the year can help manage cash flow.
- Investing in Australian companies offers dividend-friendly opportunities, but it's important to consider specific risks associated with the market.
- Visa's recent performance has been impressive, with strong growth in revenues and earnings per share.
- Texas Instruments has faced challenges due to investments in new manufacturing capacity, but maintains a strong balance sheet and potential for future growth.
Deep dives
The book "The Incom Factory" has influenced my investment strategy
Reading the book has provided some new insights and considerations, but it has not drastically changed my overall investment strategy. I still prioritize dividend growth and focus on a diversified portfolio. However, I have added a small portion of higher-yielding assets to my portfolio, such as investment trusts, to increase overall income. It's important to remember that every investor's strategy is unique, and it's essential to find an approach that aligns with one's personal financial goals and risk tolerance.
Consideration of Australian companies
While Australian companies may offer dividend-friendly opportunities, I have not personally considered them in my investment strategy. My focus has been primarily on European and U.S. companies, given the familiarity and availability of information in these markets. However, investing in Australian companies or diversifying into other international markets can be a viable option for those willing to do the necessary research and understand the unique challenges and risks associated with those specific markets.
Risk associated with Chinese stocks and complex corporate structures
Investing in Chinese stocks, particularly those with complex corporate structures and listings in offshore jurisdictions like the Cayman Islands, carries elevated risks. The lack of transparency and adherence to international accounting standards can make it more challenging for investors to fully understand the company's financial health and mitigate potential risks. Additionally, China's regulatory environment and government influence can add another layer of complexity and uncertainty. It's important for investors to carefully evaluate the risks involved and perform thorough due diligence before investing in Chinese stocks.
Impact of uneven dividend payouts on retirement budget
Uneven dividend payouts throughout the year can impact retirement budgeting. To manage this, some investors choose to set aside a specific amount of money to cover the expenses for the entire year. This strategy involves withdrawing the necessary funds from investments at the beginning of the year and refilling the account as needed throughout the year. By doing so, retirees can ensure a consistent cash flow and better manage their budget, even if the dividend payments occur at different times throughout the year.
Risk associated with Australian companies
Investing in Australian companies can offer dividend-friendly opportunities, but it's important to consider the specific risks associated with the Australian market. These may include currency fluctuations, regulations, and economic conditions that can impact the performance and stability of Australian companies. It's advisable to conduct thorough research and due diligence before investing in any market or company to mitigate potential risks and align investments with individual financial goals and risk tolerance.
Risk associated with Chinese stocks and complex corporate structures
Investing in Chinese stocks with complex corporate structures listed in offshore jurisdictions like the Cayman Islands can come with elevated risks. These risks include limited transparency and adherence to international accounting standards, as well as potential regulatory challenges in China. Investors should carefully evaluate the risks involved, understand the company's corporate structure, and perform thorough due diligence before investing in Chinese stocks to mitigate potential risks and align investments with individual investment goals and risk tolerance.
Managing retirement budget with uneven dividend payouts
Uneven dividend payouts throughout the year can certainly impact retirement budgeting. A potential approach to manage this is to set aside a specific amount of money at the beginning of the year to cover expenses for the entire year. This method involves withdrawing the necessary funds from investments upfront and replenishing the account as needed throughout the year. By doing so, retirees can ensure a consistent cash flow and better manage their budget, even if the dividend payments occur at different times throughout the year. It's important to carefully plan and consider individual financial needs and objectives when implementing this strategy.
Risk associated with Australian companies
While Australian companies may be dividend-friendly, it's important to carefully evaluate the risks associated with investing in the Australian market. Factors such as economic conditions, regulatory changes, and industry-specific challenges can impact the performance and stability of Australian stocks. It's advisable to conduct thorough research, diversify investments, and seek professional advice to make informed investment decisions in the Australian market.
Visa's Strong Performance and Growth
Visa's recent performance has been impressive, with a 9% growth in revenues and a 20% growth in earnings per share. They continue to have a high profit margin and are dominant in the payment processing industry, especially in Europe. The company's payment volume growth is strong, particularly from outside the US. Visa remains a solid and successful company despite concerns about potential future declines in the industry.
Concerns and Challenges for Johnson & Johnson
Johnson & Johnson's recent earnings showed a 6.4% increase in sales, but with negative commentary and a drop in the share price. The company faces challenges with the upcoming decline in revenue from its best-selling drug, accompanied by concerns about the strength of its pipeline and portfolio. Johnson & Johnson is also dealing with ongoing litigation, particularly related to talc. While the CEO remains confident in the company's ability to navigate these challenges, investors and analysts are raising doubts about the future growth potential and the strength of the company's portfolio.
Texas Instruments' Performance and Future
Texas Instruments has been investing heavily in new manufacturing capacity, which has impacted its free cash flow and led to a decline in revenues, net income, and earnings per share. The company is experiencing weakness in the industry, particularly in automotive. However, the company maintains a strong balance sheet and has the potential for future growth once the investments start generating cash flow. A capital management day in February may provide further insights into the company's expectations and plans.
Considerations for Diversification and Trimming
When it comes to diversifying a portfolio, it is important to consider the correlation between stocks. Overlapping stocks with high correlation may indicate concentrated risks. Trimming the portfolio should focus on removing stocks that are highly correlated and maintaining diversification across sectors and customer bases. It is recommended to analyze balance sheets, understand customer bases, and make informed decisions based on the individual stocks' potential for growth and risk profiles.
Investing Priorities and Enjoying Life Milestones
During major life milestones, such as marriage, honeymoon, and having a baby, it is important to prioritize and enjoy those moments instead of worrying about investing. Investing can always be resumed later when financial circumstances allow. Being in a situation where investing is not possible or not a priority is common, and it is important to focus on life events without feeling pressured to invest.
Comparing Dividend Stocks and Growth Stocks
When comparing high dividend, low growth stocks to low dividend, high growth stocks, it is important to consider the reinvestment basis and the absolute amount of money received. While high dividend, low growth stocks may initially provide higher dividend amounts, low dividend, high growth stocks can catch up and potentially surpass them in the long run. Calculating yield on cost, reinvesting dividends, and analyzing absolute money received can provide better insights for long-term investments.
Evaluation of Visa's Value and ASML's Results
Visa's valuation is considered on the expensive side, but the company's strong performance and growth prospects continue to attract investors. ASML's recent results were impressive, with a strong backlog and positive outlook. However, it is important to monitor potential dividend risks and the overall market conditions that can impact ASML's performance.
Considering PLD as a REIT Investment
Prologis (ticker symbol PLD) is a noteworthy real estate investment trust (REIT) with a strong balance sheet, a track record of EPS growth, and decent cagars in terms of dividend and free cash flow. While the quality of the REIT is recognized, it is important to consider the yield when investing in REITs and ensure it meets the desired threshold.
Assessing Investing Risk and Performance in the Semiconductor Industry
Investing in the semiconductor industry requires a careful assessment of the individual companies and their performance compared to peers. While Texas Instruments has faced challenges in the short term, it is important to evaluate its performance in relation to other semiconductor companies and consider how they are positioned for future growth. The cyclicality of the industry and potential shifts in demand should also be considered.
Benefits and Risks of Holding Structures and Yield on Costs
Holding structures can provide opportunities to own shares of companies like Louis Vuitton at a potentially discounted value. The yield on costs, when analyzed over time, can demonstrate the advantages of investing in low dividend, high growth stocks. Comparing absolute money received, considering holding structures, and analyzing long-term growth prospects can provide valuable insights into investment decisions.
Diversification and Trimming Strategies for Portfolio Management
When it comes to diversifying a portfolio, it is important to consider the correlation between stocks and remove highly correlated stocks. Trimming strategies should focus on maintaining diversification across sectors and customer bases. Analyzing balance sheets, evaluating growth potential, and understanding risk profiles are crucial in making informed decisions for portfolio management.
The Importance of Enjoying Life Milestones over Investing Worries
During significant life events like marriage, honeymoon, and starting a family, it is essential to prioritize and enjoy those moments without undue pressure to invest. Investing can always be resumed later when circumstances allow. Taking time to focus on and appreciate personal milestones is valuable and can create lasting memories.
Comparing Dividend Stocks and Growth Stocks with a Reinvestment Basis
Comparing high dividend, low growth stocks to low dividend, high growth stocks should consider the reinvestment basis and the absolute amount of money received. While high dividend, low growth stocks may initially provide higher dividend amounts, low dividend, high growth stocks have the potential to catch up and surpass them in the long run. Analyzing yield on cost, reinvesting dividends, and considering absolute money received can help make informed investment choices.
Evaluation of Visa's Performance and ASML's Results
Visa's recent performance has been impressive, with a 9% growth in revenues and a 20% growth in earnings per share. ASML's results surpassed expectations, with a strong backlog and positive outlook. However, investors should monitor potential dividend risks and the overall market conditions that could impact both companies' performance.
Considering Prologis as a Real Estate Investment Trust (REIT)
Prologis (ticker symbol PLD) is a notable REIT with a strong balance sheet, a track record of EPS growth, and decent cagars in terms of dividend and free cash flow. While the quality of the REIT is acknowledged, it is important to evaluate the yield and ensure it aligns with desired investment criteria.
Assessing Risk and Performance in the Semiconductor Industry
Investing in the semiconductor industry requires careful assessment, especially comparing companies in the sector. While Texas Instruments has faced challenges in the short term, it is important to evaluate its performance relative to other semiconductor companies and consider how they are positioned for future growth. The cyclicality of the industry and potential shifts in demand should also be taken into account.
Benefits and Risks of Holding Structures and Insight on Yield on Costs
Holding structures can allow investors to own shares of companies like Louis Vuitton at potentially discounted values. Considering yield on costs, when analyzed over time, can highlight the advantages of investing in low dividend, high growth stocks. Examining absolute money received, understanding holding structures, and assessing long-term growth prospects are all essential in making investment decisions.
Diversification and Trimming Strategies for Portfolio Management
When diversifying a portfolio, it is crucial to analyze the correlation between stocks and remove those with high correlation. Trimming strategies should focus on maintaining diversification across sectors and customer bases. Evaluating balance sheets, growth potential, and risk profiles is key in making informed decisions for portfolio management.
The Importance of Enjoying Life Milestones over Investing Worries
During significant life events like marriage, honeymoon, and starting a family, it is vital to prioritize and cherish those moments without feeling pressured to invest. Investing can always be resumed at a later time when circumstances allow. Taking time to focus on and appreciate personal milestones contributes to a fulfilling life.
Comparing Dividend Stocks and Growth Stocks with a Reinvestment Basis
When comparing high dividend, low growth stocks to low dividend, high growth stocks, considering the reinvestment basis and the absolute amount of money received is crucial. While high dividend, low growth stocks may initially provide higher dividend amounts, low dividend, high growth stocks can catch up and potentially surpass them in the long run. Analyzing yield on cost, reinvesting dividends, and assessing absolute money received provides valuable information for investment decisions.
Evaluation of Visa's Value and ASML's Results
Visa's valuation is considered on the expensive side, but the company's strong performance and growth prospects continue to attract investors. ASML's recent results were impressive, with a strong backlog and positive outlook. It is important to monitor potential dividend risks and overall market conditions that could impact the performance of both companies.
Considering Prologis as a REIT Investment
Prologis (ticker symbol PLD) is a significant REIT with a strong balance sheet, a track record of EPS growth, and decent cagars in terms of dividend and free cash flow. The company's quality is acknowledged, but it is crucial to evaluate the yield and ensure it aligns with desired investment criteria for REITs.
Assessing Investing Risk and Performance in the Semiconductor Industry
Investing in the semiconductor industry requires careful evaluation of individual companies and their performance in comparison to peers. While Texas Instruments has faced short-term performance challenges, it is important to assess its position relative to other semiconductor companies and their potential for future growth. Cyclical nature and shifts in demand within the industry should also be considered.
Benefits and Risks of Holding Structures and Yield on Costs
Holding structures can provide opportunities to own shares of companies like Louis Vuitton at potentially discounted values. Yield on costs should be assessed over time to understand the advantages of investing in low dividend, high growth stocks. Absolute money received, holding structures, and long-term growth prospects should be examined to make sound investment decisions.
Diversification and Trimming Strategies for Portfolio Management
When diversifying a portfolio, it is important to consider the correlation between stocks and remove those that are highly correlated. Trimming strategies should focus on maintaining diversification across sectors and customer bases. Evaluating balance sheets, growth potential, and risk profiles is crucial for informed decision-making in portfolio management.
The Importance of Enjoying Life Milestones over Investing Worries
During significant life events like marriage, honeymoon, and starting a family, it is essential to prioritize and embrace those moments without feeling pressured to invest. Investing can always be resumed later when circumstances allow. Investing in personal milestones is just as important as investing in financial endeavors.
Comparing Dividend Stocks and Growth Stocks with a Reinvestment Basis
When comparing high dividend, low growth stocks to low dividend, high growth stocks, considering the reinvestment basis and the absolute amount of money received is crucial. While high dividend, low growth stocks may initially provide higher dividends, low dividend, high growth stocks have the potential to catch up and potentially surpass them over time. Analyzing yield on cost, reinvesting dividends, and assessing absolute money received provides valuable insights for long-term investing.
Evaluation of Visa's Performance and ASML's Results
Visa's recent performance has been impressive, with a 9% growth in revenues and a 20% growth in earnings per share. ASML's results surpassed expectations, showcasing a strong backlog and positive outlook. However, it is important to monitor potential dividend risks and the overall market conditions that can impact the performance of Visa and ASML.
Considering Prologis as a Real Estate Investment Trust (REIT)
Prologis (ticker symbol PLD) is a notable REIT with a strong balance sheet, a track record of EPS growth, and decent cagars in terms of dividend and free cash flow. While acknowledging the quality of the company, it is important to evaluate the yield and ensure it aligns with investment criteria for REITs.
Assessing Risk and Performance in the Semiconductor Industry
Investing in the semiconductor industry requires careful assessment of companies in the sector. While Texas Instruments has faced short-term challenges, it is important to gauge its performance relative to other semiconductor companies and consider their future growth potential. It is crucial to keep in mind the cyclical nature of the industry and potential shifts in demand.
Benefits and Risks of Holding Structures and Yield on Costs
Holding structures can offer the opportunity to own shares of companies like Louis Vuitton at a potentially discounted price. Yield on costs should be taken into account over time to comprehend the advantages of investing in low dividend, high growth stocks. Examining absolute money received, comprehending holding structures, and analyzing long-term growth prospects are vital in making investment decisions.
Diversification and Trimming Strategies for Portfolio Management
When diversifying a portfolio, consider the correlation between stocks and remove highly correlated ones. Trimming strategies should focus on maintaining diversification across sectors and customer bases. Assessing balance sheets, evaluating growth potential, and understanding risk profiles are crucial for informed decision-making in portfolio management.
The Importance of Enjoying Life Milestones over Investing Worries
During significant life events such as marriage, honeymoon, and starting a family, it is crucial to prioritize and embrace those moments without being overly concerned about investing. Investing can be resumed later when the circumstances are more suitable. Taking time to appreciate personal milestones is essential for a well-rounded life.
Comparing Dividend Stocks and Growth Stocks with a Reinvestment Basis
When comparing high dividend, low growth stocks to low dividend, high growth stocks, it is crucial to consider the reinvestment basis and the absolute amount of money received. While high dividend, low growth stocks may provide higher dividends initially, low dividend, high growth stocks have the potential to catch up and surpass them in the long run. Analyzing yield on cost, reinvesting dividends, and assessing absolute money received can guide investment decisions.
Evaluation of Visa's Value and ASML's Results
Visa's valuation is considered on the expensive side, but the company's strong performance and growth prospects continue to attract investors. ASML's recent results were remarkable, with a strong backlog and positive outlook. It is crucial to monitor potential dividend risks and overall market conditions that can influence the performance of both Visa and ASML.
Considering Prologis as a REIT Investment
Prologis (ticker symbol PLD) is a significant REIT with a robust balance sheet, a track record of EPS growth, and decent cagars in terms of dividend and free cash flow. While recognizing the quality of the company, it is important to evaluate the yield and ensure it aligns with desired investment criteria for REITs.
Assessing Investing Risk and Performance in the Semiconductor Industry
Investing in the semiconductor industry necessitates careful evaluation of individual companies and their performance relative to peers. While Texas Instruments has faced short-term challenges, it is vital to evaluate its performance relative to other semiconductor companies and their potential for future growth. The cyclicality of the industry and potential shifts in demand should be considered.
Benefits and Risks of Holding Structures and Yield on Costs
Holding structures provide the opportunity to own shares of companies like Louis Vuitton at potentially discounted values. Yield on costs should be analyzed over time to understand the benefits of investing in low dividend, high growth stocks. Examining absolute money received, understanding holding structures, and evaluating long-term growth prospects are crucial elements for investment decision-making.
Diversification and Trimming Strategies for Portfolio Management
Diversifying a portfolio should involve considering the correlation between stocks and removing those with high correlation. Trimming strategies should focus on maintaining diversification across sectors and customer bases. Evaluating balance sheets, assessing growth potential, and analyzing risk profiles are key in making informed decisions for portfolio management.
The Importance of Enjoying Life Milestones over Investing Worries
During significant life events like marriage, honeymoon, and starting a family, it is essential to prioritize and cherish those moments without feeling pressured to invest. Investing can always be resumed later when circumstances allow. Taking time to focus on and appreciate personal milestones contributes to a fulfilling life.
Comparing Dividend Stocks and Growth Stocks with a Reinvestment Basis
When comparing high dividend, low growth stocks to low dividend, high growth stocks, considering the reinvestment basis and the absolute amount of money received is crucial. While high dividend, low growth stocks may initially provide higher dividends, low dividend, high growth stocks have the potential to catch up and potentially surpass them in the long run. Analyzing yield on cost, reinvesting dividends, and assessing absolute money received provides valuable insights for long-term investing.
7.
Comparing high dividend, low growth stocks with low dividend, high growth stocks
2min
Enjoy our latest Dividend Talk episode in which we discuss the 2023 earnings of some of the highest quality dividend growth stocks in the world today. Earnings season has really started now, so we are very excited to also see all those dividend hikes starting to come in.
Earnings discussed today:
- ASML
- Texas Instruments
- Johnson & Johnson
- LVMH
- Visa
Besides that, we also answered all of your questions.
C U on the inside ๐
Stocks mentioned:
- ASML (ASML.AS)
- Investor AB (IVSBF)
- Signify (LIGHT.AS)
- American Express (AXP)
- Kimberly Clark (KMB)
- Cincinnati Financial (CINF)
- ADM (ADM)
- Yum! Brands (YUM)
- Air Products (APD)
- Johnson & Johnson (JNJ)
- Visa (V)
- Texas Instruments (TXN)
- Prologis (PLD)
- Kering (KE.PA)
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