Word: dividenders
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Dates: during 1990-1999
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...rare in the sub-prime industry and enables Green Tree to recover a relatively high proportion of losses when customers default on their payments. And despite problems such as the downgrading of much of Green Tree's debt by rating agencies, the company just declared its 46th straight quarterly dividend and expects to expand its loan portfolio to $32 billion this year...
Buffett's silver spree caught almost everyone off guard. After all, the man made his personal billions--$25 billion at last count--by buying and holding undervalued stocks. But silver doesn't even pay a dividend and, worse, costs money to store. So why on earth did Buffett use Berkshire to acquire 4,000 tons of silver--a cache weighing more than 10 Boeing 747s--at a cost of $650 million between July 25 and Jan. 12? Until then, Buffett hadn't owned an ounce in 30 years...
...case of the disappearing dividend isn't hard to solve. As share prices have soared in recent years, dividends have come to be regarded as only slightly more relevant than the gushing palaver in an annual report. In this so-called new era for investing, perfectly healthy electric utility companies--the widows-and-orphans stocks long known for generous dividend policies--have been slashing their payout rates without a trace of remorse. "It's worked out splendidly," says John Hodowal, chairman of Ipalco Enterprises, based in Indianapolis, Ind., who last year short-circuited the dividend by 32% and immediately bought...
Look for some blue-chip companies to step up next. Who might make the bold move? Among the giants, companies like Wal-Mart, Disney and Home Depot are good candidates. They are fast growing and pay woefully small dividends anyway. Disney, for example, has the lowest dividend yield of the 30 companies in the Dow, at 0.55%. You couldn't feed a mouse on that...
Certainly, some investors who live off dividends would cut and run. But there are powerful pro-investor arguments for dumping the dividend. One is that many investors reinvest dividends anyway and incur transaction costs to do so. But the main argument is that dividends are taxed as ordinary income, a marginal rate of up to 39.6%, while long-term stock gains are taxed as capital gains, a much lower rate of 20%. So it makes sense for companies to use their cash to buy back stock. Yes, a bear market could devour this strategy. But as long...