![]() ![]() Since 2009, DTE’s boosted its payout by 6.2% annually-so the spinoff will represent an acceleration of this already excellent trend. The utility has boosted its payout by a sweet 49%, more than four times the raise received by mainstream investors who only invest in the “utes” with the mainstream Utilities Select Sector SPDR ETF (XLU) XLU. Over the past five years, DTE has been no slouch when it comes to dividend growth. Its midstream spinoff is likewise planning to establish a growing dividend that is competitive with other pipeline firms.The 2021 to 2022 dividend increase for DTE is going to be between 8% and 10%, and.The initial combined dividend (of the two firms) is scheduled to be higher than DTE’s current payout of 3.2%,.But I’m concerned that they’ll be more expensive then than they are now as other income investors figure out that: We could attempt to capture DTE’s next dividend by buying shares before December 18. ![]() The spin is scheduled to happen in mid-2021. It’s rare that we income investors get to enjoy one!ĭTE Energy (DTE) is spinning off its midstream business, which moves and stores natural gas. ![]() Spinoff companies tend to be great deals for investors. Our next “special dividend situation” comes courtesy of an upcoming spinoff. This may sound huuuuge, but because it is actually less than the market feared, it likely boosted ABC’s stock price to help it catch up with its “dividend magnet.”Ĭould we try to capture ABC’s next dividend payment in February? Sure, but I’d rather buy it here because it’s likely to be trading higher by the time it dishes its next dividend! Hence, the discounted stock price.īut the four firms have recently tentatively agreed to settle for $26 billion. This is a company that has increased its dividend by 29% over the last five years!ĪBC, its two main competitors, and Johnson & Johnson Drug distributor AmerisourceBergenĪBC (ABC) is bizarrely cheap at 11-times free cash flow (FCF). How many supercomputers on Wall Street do we believe are mining for these ex-dates and any potential “blip” worth buying? Enough to act faster than you, me and our slow human brains, that is for sure.īut we have an edge over the computers when we logically think a few steps ahead. Why not? Because there’s no alpha available in a strategy this simple. Neither has anything to do with ex-dividend dates, or capture of any sort. I’ll share a couple actionable income ideas with you in a moment. That said, how do we find more 12% winners and fewer 1% losers? ![]() My VZ and XOM examples are, obviously, purely arbitrary and for educational and entertainment purposes only. XOM itself is still down 42% year-to-date, so any attempt to capture its dividend is likely outperforming its poor “buy and hope” investors! Of course, the S&P 500 rocketed 9.7% higher over these 15 days, so that helped. A dividend capture attempt of XOM’s most recent November 10 dividend would have worked out much better than with Verizon. XOM (XOM), which (let’s be honest) is these days the portfolio property of only income investors and degenerate gamblers. Really, it’s about the timing of the purchase. Unless we project it out over a year and see that it puts us on pace to lose more than 26% annually. The above attempt wasn’t a complete disaster. The S&P 500 happened to appreciate 3.1% during these 15 days, so we’d expect to have pocketed the payout with a bit of price appreciation to boot. Knowing that stocks tend to appreciate in anticipation of their ex-date, we could have attempted to “capture” the dividend by purchasing VZ on October 1 and holding the stock until mid-month. (This means that anyone who held VZ shares when the market opened this day would receive its $0.627 quarterly payout.) Its most recent ex-dividend date was October 8. VZ (VZ), which is a stock that investors buy primarily for its 4.1% dividend. ![]()
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