It is a new year and given the stock market was up in the wake of President elect Trump victory as well as commodity prices have risen, one can hope the economy will continue to grow. If it continues to grow we all make more money, along the way it would be nice to win lottery size gains, but for 99% of the people the slow and steady approach is the one to take. The reason is we do not know? We expect at the end of the year something similar to what we are waking up to, but we do not know. What we do know is many companies will still be operating and generating dividends and until the federal reserve bank interest rates are raised, dividends and those companies with reliable income streams will be valuable to hold on to or accumulate.

Julie Michaels of Morningstar examine conservative stocks with a reliable income stream in early December.

the following criteria were used:

5 year beta vs S&P 500

earnings variability (earnings per share variability in percentage terms around the 5 year EPS)

Price to trailing earnings

Price to Book

Dividend Yield

Expected Dividend Yield

A few others which are not recorded for space limitations

To narrow the list of all the dividend paying companies, she selected companies with a market capitalization of greater than $ 3 billion

Company                    Mkt Cap   Div                Beta     P/E    P/B   Qual Earn  Payout Based On

($ Bil)        Yield (%)                                        Surprise %  Trail Div and EPS

First Energy           13.857          4.4                 0.2      11.5     1.2                 17.1             50.9

Southern Co           47.343         4.6                  0.1      16.1    2.0                  4.2             73.3

Consol Edison        22.138          3.7                 0.0      18.7    1.6                  1.7              68.6

Duke Energy            52.614         4.5                0.1        16.1     1.3                 8.5               70.0

Deere & Co               31.552          2.4                0.8       20.7    4.2              170.6           49.4

Public Svc Ent          21.672         3.8               0.3         14.7    1.6                   9.0           55.7

AT&T                       242.446          5.0               2.8         14.1     2.0                  0.0           68.1

Everst Re                    8.661           2.4               0.5           9.2     1.1                  35.2           20.0

Garmin                        9.797          3.9               0.9          18.2     2.9                36.0           71.6

GM                              52.696          4.4               1.4            5.6     1.2                  17.5            24.1

The other companies on the list include

Archer Daniels, Kohl’s, People United Fncl; Western Digital and Teva Pharma

Linking to dividend paying stocks, if the year is better than last year, these companies are expected to continue doing all the things that make America great and continue to have a revenue stream to pay dividends. One might notice some of them are utilities and if you are paying to one of them, a good investment is to own stock in the utility. We all would like to have a lottery win and when times are bad for one group they are better for another and it is possible; on the other hand if you own slow and steady earnings and reinvest the dividends into more stock you will be wealthier with the combination dividends and capital gains with a low risk and high return ratio.

There are more questions than answers till the next time – to raising questions.