Dividends and Dividend paying Super Bowl advertisers play the long game

In the US, the biggest single game which brings millions of people together is the Super Bowl. It is one of the few remaining events which pushes up TV ratings, brings people together – most of whom are not regular viewers which translates into the highest rates for TV advertising. The game was on Feb 3 between the New England Patriots and LA Rams (it should have been New Orleans Saints but that is something fans will take a little longer to let go). The advertising is $5 million for a 30 second spot. Did the ads make you want to and actually buy something?

Scott Clayton of TSI Network examined some of the Super Bowl advertisers who pay the fees for the advertising.

His company awards points to a dividend payer based on key factors:

1 point for 5 years of continuous dividend payments, 2 points for than 5 years

2 points if it has raised the payment in the past 5 years

1 point for management’s commitment to dividends

1 point for operating in non-cyclical industries

1 point for limited exposure to foreign currency rates and freedom from political interference

2 points for a strong balance sheet, including manageable debt and adequate cash

1 point if the company is a leader in its industry

Ratings

10-12 points the most secure dividends

7-9    above average sustainability to pay dividends

4-6   average

less than 4  below average sustainability

Company            Rating                    Points    Div Yield      Recent Price    1 Yr Total  %

Procter & Gamble        Highest                   10              3.1                  94.80            6.5

Colgate Palmolive      Above Average         9               2.7                  62.35           -18.9

Kraft Heinz                 Above Average         9               5.3                   47.28          -41.4

Toyota ADR                Above Average        8                2.5                122.47             -12.1

Kellogg                        Above Average         8               3.8                  59.13              -11.7

Pepsi                            Above Average         7              3.4                  110.50            -8.7

Anheuser- Busch ADR Above Average      7              1.8                    74.08            -35.5

Intuit                           Above Average         7              0.9                    212.24          26.0

Henkel AG ADR          Above Average        7              1.6                      23.29         -27.2

 

Linking to dividend paying stocks, there are two takeaways, it is good to have some sort of rating system so one you can avoid companies and also determine if your company is in the same range no matter the economic climate. The second take away is not every dividend  company goes up in value every year, the prices go up and down however because they have a dividend and can pay it for years on end, the prices of the stocks will raise to a higher multiple. There are reasons why prices go down and up, but if you buy with a primary reason to buy the dividend in the longer term you will achieve higher wealth.

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

 

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