Well, lightening hasn’t struck for me this past week, so I don’t have any new dividend investing picks to share right now. I’ve been pleased to see that one company I’ve been stocking up on, Clearway Energy (CWEN) has seen some price appreciation and I’m now in the black on that investment. I’ve continued to nibble up some shares here and there.

I was adding to my Gannett holdings, which is a small part of my portfolio. The dividend remains attractive, but I think I’ll hold off buying more until their next earnings release. There’s also a significant chance that Gannett will be involved in a merger or acquisition sometime in the not too distant future.

I ran across this article in the business section of the StarTribune (the article originated in the Philadelphia Enquirer). It offers some insights and suggestions for income oriented investors, particularly those looking for an exchange traded fund that specializes in dividend stocks. Interestingly, only one of the specific dividend stocks mentioned in the article (Microsoft) is in my portfolio.

 

 

While I’ve dispensed with the plan to make a dividend stock pick every week, I still plan to highlight one that appeals to me from time to time.

While the yield on the one financial stock in my portfolio, UBS, is attractive, the stock has performed below expectations since I bought it and hasn’t rebounded yet. I’m not planning to dump it (it’s one of my few international holdings), but I have started looking at domestic financial firms.

The U.S. banking system remains much larger and more diverse than most. And regional player KeyCorp recently announced a dividend hike that will push its payout ratio above 4%. The stock closed at $17.45 a share on July 19, and it trades at just over 10-times earnings, which in today’s overbought market seems attractive. According to Barron’s, research firm NewConsructs considers KeyCorp’s payout rate to be very safe. In short, KeyCorp is definitely the type of firm I’d consider adding to my portfolio to boost dividend income.

The stock is down year-over-year, reflecting fears about what falling interest rates might do to the financial sector. The company’s “free cash flow” is well more than twice it’s dividend payout, according to Barron’s.

The Cleveland-based bank reported a slight decline in earnings during the first quarter, but net interest income was up from the year earlier period. Fee income declined due to lower investment banking results. Overall, the payout rate is high but with less risk of a dividend cut than is typically the case with banks with dividend yields north of 4%.

 

 

 

Analysts on CNBC this afternoon had an interesting discussion about how growth stocks have outperformed value stocks — and not just this year, but for the last couple of decades. As a predominantly value oriented investor, I found the news unsettling.

The money quote (sorry, I cannot remember which analysts were speaking, so no credit where credit is due) was that big value stock companies are the ones suffering from economic disruption fueled by technological innovation as big tech giants try to muscle into other industries.

Fortunately, I’ve added tech stocks to my portfolio in recent years (Microsoft, Intel, Cisco), which seem like value plays to me although other investors might put them in the growth bucket. But putting aside the sometimes blurry distinction between value and growth investments, I think the point made by CNBC’s experts is well taken: a value investing strategy isn’t going to outperform a growth strategy most of the time. One of the analysts suggested that value investing still makes sense heading into a recession, because value firms tend to be more stable in volatile times. The value approach also makes sense just coming out of a recession, when financial stocks (the biggest component of the value stock universe) are poised to rebound nicely.

That said, more often than not the biggest and most reliable dividend payers are usually value stocks. And for income-oriented investors, I think a value investing approach remains the best foundation for building a portfolio. But perhaps blending some growth stocks into a value oriented portfolio can increase total returns.

 

 

Buy on the dip? Or are the bears in charge? UPS is down about 18% year-over-year, and down 9% in the last month alone. It’s a stodgy stalwart kind of choice, but the 4% dividend yield was enough to tempt me into the buy team recently.

The company’s fundamentals seem solid to me. Trade wars and other economic concerns may be weighing on the stock at the moment, but growth in e-commerce will likely fuel  growth for demand in UPS’s delivery services. The P/E ratio of 18, plus a forward estimated P/E of just under 13% seem attractive. The company also boasts strong cash flow, profit margin and debt service statistics.

My timing may have been off (I bought last week. The shares have continued to slide.) But I have a good feel for this pick. UPS I think is poised to benefit from marketplace trends for the foreseeable future and is pursuing overseas growth opportunities. And like I say, a 4% dividend yield is nothing to sneeze at these days.