April 27th, 2012
Guide to Dividend Investing - a review
AstraZeneca wounded but definately not out!
Perhaps you are sitting in front of your computer wondering how to cope with the ongoing economic uncertainty and financial strain.
Take a moment and think of all the things you would do if you had several hundreds or even thousands of extra pounds per month - and were worry free concerning your retirement. I am sure you came up with plenty of options how that money could be used.
Maybe you already have your money invested somewhere. But ask yourself this question - is your money working hard enough for you and are you seeing the return that you want and absolutely need to have on that investment?
Today the case for investing in inflation beating dividend paying shares is as strong, if not stronger, than ever.
When ISA’s were launched in 1999 the Bank of England base rate was 5.5% while inflation was 1.6% and falling
Today, base rate stands at 0.5%, and inflation at 3.4%, still well above the Bank’s 2% target.
Anyone holding cash is likely to be subject to a negative return after accounting for inflation. Fortunately, some of the UK’s best companies are offering dividend yields of up to 7.5%.
Instead, investing in high quality companies paying increasing dividends is a relatively safe, effective, and proven investment strategy that will grow your hard earned money, if done in the right way…
Clever investing in historically undervalued companies, with long track records of increasing dividends, at the right time can be one way to help resolve your financial investment dilemmas.
At Dividend Income Investor.com we focus on real total return defined as dividend yield plus dividend growth plus capital gains. We look to combine:
- “high yield” (those shares with dividend yields at least 40% higher than the FTSE100 average) with
- “dividend growth” (companies with good dividend track records and growth potential) that are
- “historically undervalued” (using a share’s dividend yield as the primary measure of value, investors will learn to buy and sell when dividend yields instruct them to do so) thereby maximising total real return.
The reasoning behind real total return appeals to us as long-term investors as it deals with averages – an average dividend yield, average dividend growth and average annual share price appreciation.
Of course . . .
We cannot be sure that dividends will rise in each and every year. We also cannot be sure when and to what extent share prices will rise.
However if we can buy a high quality dividend paying share at historically undervalued price levels, and, if this company has a long, uninterrupted history of dividend payments and of frequent dividend increases over a period of years, we can be pretty sure that the total return on that investment is likely to outperform the total return on any other kind of investment.
Our focus on total real return from high quality dividend paying shares could therefore help you to stay ahead of inflation, but also increase your real wealth over time.
“…if you can get what the author of the Guide to Dividend Investing has to say, then you are qualified beyond the 99.9% of private investors who allow their riches to be run by someone else for a huge fee…” Shares: Reaping the Dividends – Michael Wilson
The complete Guide to Dividend Investing is the comprehensive 91 page tool that you need to have in order to maximise your real total return. The Guide will help you:
You don’t need to wonder any more about what your next financial move will be. With the Guide to Dividend Investing, you will know exactly what to do and you will see the results of your investment strategy, without having to worry or spend thousands of pounds using a financial advisor.
Order the Guide to Dividend Investing NOW so you can take the guesswork out of your investment decisions.
As a previous purchaser has said:
“I have already produced my own watch list of high dividend payers but without the thorough analysis you do. Your dividend reports are excellent. At least I don’t have to spend hours researching these companies now myself. It’s done for me”***Click Here to order your Guide to Dividend Investing***
AstraZeneca wounded but not out!
There is no way around it; AstraZeneca announced dreadful first quarter results.
First quarter revenues came in well below market expectations,falling 11 per cent to $7.35bn, short of consensus forecasts of $7.95 billion - the average of 21 estimates compiled by Bloomberg.
Pre-tax profits fell a massive 38 per cent to $2.05bn, with earnings per share also down 38 per cent from $2.08 to $1.28.
The company highlighted challenging market conditions together with the anticipated impact from the loss of exclusivity on several brands behind the fall, which is exactly what many analysts have been fearing for a while as the benefits of some patents have come to an end, whereas there is currently nothing much to counter this.
Nevertheless, AstraZeneca remains strongly cash-generative thanks to its multi-year cuts strategy. It also has promised to return value to shareholders through a progressive dividend policy and share buyback programme.
Also, AstraZeneca has not cancelled its intention to increase the dividend while maintaining cover at two times (50% of underlying earnings).
Its dividends have been well covered by earnings in recent years, so, while the company is one of few FTSE100 listed companies with substantial net cash, and, with earnings per share stagnating this year, at best, there is a good chance the dividend for 2012 will not be cut.
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Are AstraZeneca shares undervalued?
Buying dividend paying shares when they are priced too high will often lead to long-term disappointing returns.
Worse, selling in a ‘panic’ when the overall stock market is in a down trend will further disappoint your overall returns.
Make sure to benefit when a select group of high quality dividend paying companies is historically undervalued.
Let me show you whether Astrazeneca shares are historically undervalued or not. Use this information to make better informed long term buy and sell decisions.
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Till next time
Dividend Income Investor.com
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