A decades-long history of annual dividend increases is a good indicator of a high quality company. That kind of consistency often comes at premium: Many “dividend aristocrats” trade for lofty valuations. Some do stand out as great deals, though — and three of our Foolish contributors are happy to share a few of them with you. In this article, the contributors suggest three stocks for August: ExxonMobil, Target, and Illinois Tool Works. Exxon was showing a recovery since the lower oil prices over the past year, but when the price of oil went down in July again, it hurt the price of Exxon. The company is involved in all aspects of energy production, from drilling to retailing, and that diversification has allowed it to rack up an impressive dividend history despite the industry’s inevitable pops and drops. Over the past 33 years, the company has increased its dividend by an average of 6.4% annually. This company may be a good add to your portfolio simply because of its size and its ability to hunt for bargains. Analysts are expecting the company (Target) to produce earnings of $5.14 per share this year, and the stock price is now at about 14.7 times that number. That’s well below the P/E valuations given to many other dividend aristocrats. Target announced a 7.1% quarterly dividend increase back in June, marking the 45th consecutive year in which Target has raised its dividend. The stock carries a dividend yield of about 3.2%, based on the most recently announced payment, quite a bit higher than the 2.75% yield offered by fellow retailer and dividend aristocrat Wal-Mart. Target’s valuation is lower than most dividend aristocrats now for a good reason. The company’s revenue has been stagnating over the past few years, and its operating income has been essentially flat for the past decade. Per-share profits have increased mostly due to share buybacks, as both gross and operating margins have contracted. Even though Target has some factor’s against it, the author suggests watching Target due to its dividend increases. The final stock pick is Illinois Tool Works and the author points out two interesting facts: The company has raised its dividend for 52 straight years and its dividend has grown at an average compounded rate of 11% annually since 2012. So how does Illinois Tool Works afford a higher dividend year after year? By growing its cash flows even during difficult times, thanks largely to a diversified product portfolio that helps mitigate business risks. I recommend you read the article to form your own opinion. I share these articles as a way to stimulate your interest in finances, investing, and a business point of view. Personally I believe a person should constantly be learning more on the topic of money. Money is a tool that is neither good nor evil, but it can be used for good or evil. “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” (1 Timothy 6:10 NIV). To seek money in and of itself to satisfy your own desires to me is selfish, however if you take the money you have and build a legacy that impacts generations to a better quality of life then to me that is better. Get financially educated, so you can help others. If you want to know how to become rich, then do this simple step: buy assets, and
don’t buy liabilities that you think are assets.
When Kobe Bryant signed his first pro basketball contract with the Los Angeles Lakers in 1996, it made him a millionaire virtually overnight: The three-year contract would pay $3.5 million. Bryant was 17 at the time, straight out of high school. He would go on to earn a record $680 million over the course of his career, according to Forbes, which gave the now-retired player a unique perspective on wealth. Growing up, I enjoyed watching and playing basketball. I even enjoyed watching Michael Jordan. After he retired, I looked for another player to follow his career. In 1997 as I was graduating high school, I started watching Kobe start his career. It’s amazing to see his accomplishments over the years, and the letter he wrote to his younger self is educational. In fact, in his letter he encouraged his younger self to invest and not just give to his family and friends. Bryant stresses that handing money and material goods to people is not necessarily the best way to show your love, since it can negatively affect their work ethic and may even suppress their ambition. If you come into a windfall, Bryant recommends helping the people around you by investing in their future rather than giving them handouts. The article makes a good point. Don’t just give money away, invest it. Invest it into an asset. Invest it into a future. If you catch a fish for a person, the person may one day go hungry, but if you teach the person how to fish, the person will never go hungry. “Put them through school,” he said. “Set them up with job interviews and help them become leaders in their own right. Hold them to the same level of hard work and dedication that it took for you to get to where you are now, and where you will eventually go.” “As time goes on,” Bryant continued, “you will see them grow independently and have their own ambitions and their own lives, and your relationship with all of them will be much better as a result.”
The longer I work with entrepreneurs, the more certain I am that the ability to succeed isn’t strictly dictated by skill, creativity, and intellect. Things like integrity and personal behavior are at least as important as education and experience. Here are five personal habits that you may want to kick to the curb for prosperity and success to be yours: You frequently use the words “I don’t have time right now.”, you let your mind drift while others are talking, you ignore advice and ideas without consideration, you believe that get something right you have to do it yourself, and you ignore the needs of your body. The author has suggestions to help break these five habits that may be hindering your success. Make a list of all the things you push aside and make time to complete one or two of those tasks a week. To keep your mind from drifting, make eye contact and be an active listener by nodding your head, offering feedback, and asking questions. Listen to everyone’s opinion regardless if it applies or not, and I suggest taking notes as needed. Then go back and review what the person has said against your own values. Delegate tasks that need to be done, properly instruct the employee or co-worker, and make sure the person takes notes. If the task is not completed properly don’t take over the project, but provide feedback quickly. Obviously this scenario can’t happen in time sensitive projects, however with proper time management, a project should still be completed without issue. Finally, pay attention to what your body is telling you, keep track of your eating and sleep habits, and notice how you feel as they fluctuate. If you fall back on the I-don’t-have-enough-time excuse, track your productivity levels as you improve your personal habits. I guarantee that time will be on your side. Your health and your wealth are connected to each other. Without good health you can’t build wealth, and without wealth you can’t maintain good health. Eliminating these five hindrances will increase your productivity and at the same time build the culture of your organization.
If you have a prayer request, or if you’re in need of a financial checkup you can reach me in the contact me section.
For this week, I’ve included an animated book review of Rich Dad Poor Dad by Robert Kiyosaki from the MinionNoMore Youtube channel.
“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”
Psalm 35:27-28 MSG