Duke Energy – Just Another Strong Utility

What Makes Duke Energy (DUK) a Good Business?

Duke Energy is the 7^th largest electric power company in the United States.  It provides electric services to 7.5 million retail clients across the Carolinas, the Midwest, and Florida, and natural gas distribution services to 1.6 million clients in Ohio and Kentucky.

Source: DUK fact sheet

The company once had international operations but sold them in 2016. Going forward, DUK plans to focus on generating cleaner energy and building natural gas infrastructure. DUK doesn’t only mention the word “cleaner” for fun; it has retired 40 older coal units, reducing their carbon dioxide emissions by 29% since 2005.

Revenue

Revenue Graph from Ycharts

Besides selling their international assets in 2016, DUK spent $6.7 billion to acquire Piedmont Natural Gas. This transaction should help DUK generate additional synergy as Piedmont was active in Duke’s territories. A 4-6% revenue growth is expected going forward (DUK Q3 presentation).

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Recent Buy – AION

I’ve been meaning to write about this for a while, but haven’t had the chance until now. Better late than never…

I participated in my first ICO/token sale in the digital asset/crypto-space in early October! The experience was interesting to say the least and I went through various steps in the process, which gave me a better understanding and practical experience of the cryptoworld. It’s one thing to read about how coins are transferred and are visible on the public blockchain, but actually performing this transaction gave me a lot of confidence for future use of this space. Anyway..back to the topic of the token sale.

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5 Lessons Learned About Investing In Dividend Growth Stocks

On December 11, 2003, I purchased my first dividend stock. Granted my motives were not pure, nor did I have a clue as to what I was doing. Prior to that I had always been an aggressive growth investor. During my investing years, I have learned many things. However, I would rank these 5 lessons as the most important:

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Weekend Reading Links - November 26, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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My Favorite Dividend Growth Stocks With Over 10% Hike Potenital

I've spent the past 5 weeks reviewing earnings in the search of strong dividend growth stocks. 

Instead of solely focus on their dividend yield or history, I put my primary focus on their growth abilities. 

This quarter I've found 3 companies showing double-digit increases this quarter that has maintained this pace for the past 5 years: 

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4 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout

New income investors naturally focus on yield, but the highest yielding stocks aren't always the best investments. To find the very best dividend growth stocks an investor must identify companies that will not just sustain their dividends, but increase them every year. To find these jewels in the rough, there are two very important things the investor must look for.

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Weekend Reading Links - November 19, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Invesco: when performance matters

What Makes Invesco (IVZ) a Good Business?

As we are riding a never-ending bull market, Invesco continues to perform like there is no tomorrow. At the end of September 2017, 64%, 67% and 75% of Invesco’s actively managed portfolios were beating their peers on 1, 3 and 5 years basis. In other words, when investors look for performance, they look at Invesco.

Source: IVZ Q3 2017 presentation

The company has been proven resilient after the sale of Atlantic Trust in 2013 and the departure of their all-star portfolio manager Neil Woodford in 2014. Those two events affected the most important metric for any investment firm: assets under management. Despite these two events, IVZ shows a positive AUM growth of 1.9% annualized rate over the past 5 years. Let’s take a deeper look at this strong investing firm.

Revenue

Revenue Graph from Ycharts

As mentioned in my introduction, IVZ shows a strong performance model that enabled it to keep its AUM growing. Revenue are now back to growth territories and the recent acquisitions in the ETFs business will definitely push IVZ to higher level.

What I like about IVZ AUM is that we are not only talking about assets being lifted-up by strong market performance. The company recorded long-term net inflows of $6.3 billion in their latest quarter.

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Is That Superman In The Sky? Not It’s A Boeing!

Investment Thesis

What happens when the leader of an industry sees several opportunities knocking on its doors at the same time? The stock surges like there is no tomorrow. Boeing (BA) is the leader in the commercial aircraft industries and benefits from several growth vectors at the moment. Its commercial airplanes division is booming with strong backlog, military expenses are pushing its Defense, Space & Security segment and management came with the idea of offering additional services to its clients securing recurring revenues.

Boeing looks like the perfect stock to hold right now. But what if you missed your flight, is still time to buy another ticket?

Understanding the Business

Boeing is well known for its commercial airplanes. The company is divided into 3 segments (% of revenue are coming from BA latest quarter):

Commercial airplanes: this segment counts for about 60% of BA business. In 2016, the company led the industry for a 5^th consecutive year for the most deliveries (source annual report 2016).

Defense, Space & Security: this segment counts for about 23% of BA business. Boeing manufactures satellites, military aircrafts and weapons systems. 37% of this division revenue comes from international clients.

Global Services: this is a new segment introduced this quarter and represented 15% of BA business. It is dedicated to providing more agile, cost-effective and streamlined after-market support and services to its commercial clients. BA eyes also the maintenance business and plans to integrate spare parts, modifications, upgrades, and data analytics and other information based services to its offer.

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Quarterly Update – Q3 2017

Welcome to the quarterly update for Q3 2017. This is part of  a series where I track our financial progress on a quarterly basis. I present three parts in this series: (i) Investment & Portfolio Update, (ii) Passive Income Update, and (iii) Goals Update.

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8 High-Yielding Mega-Cap Stocks

There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior management and foresight. Often these are more mature companies that also offer stability and predictability, usually at the expense of dynamic growth. These are your mega-cap stocks.

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Weekend Reading Links - November 12, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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What Makes NextEra Energy (NEE) a Good Business?

 NextEra Energy is an electric power company divided into 2 different businesses: Florida Power & Light (FPL) which 89% of its customers are residential (11% commercial) and NextEra Energy Resources (NEER), a clean energy utility with 75% of its assets producing wind energy. Along with Xcel (XEL), it is a leader in the clean energy production in the U.S.

Most of FPL energy is generated through natural gas (70%) and nuclear (23%). FPL counts for 60% of NEE earnings (2016 annual report).

As you can see in the map above, NEER is mainly a wind energy company and it is mostly active in the central U.S., with some activities in California. As regulation around coal energy becomes more restrictive, a play in the clean energy through NEE sounds like a good idea.

Revenue

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How to become a successful dividend investor

There are several guidelines about becoming a successful dividend investor. They are centered around several key points I am going to be discussing in the next three weeks. I will be updating this post with links to articles on the process of becoming a successful investor.

The series of articles over the next three weeks will be a high level summary of my dividend investment plan today. If I were to start dividend investing today, I would find the collection of posts to be of tremendous value. In other words, the articles I will be posting are similar to a free course on dividend investing.

Lesson One: How to identify your dividend investment goals?

Lesson Two: Where to search for investment opportunities?

Lesson Three: When to buy dividend paying stocks?

Lesson Four: How to analyze investment opportunities?

Lesson Five: How to Manage Your Dividend Portfolio

Lesson Six:  How to deal with new cash from dividend payments

Lesson Seven: How to monitor your dividend investments

Lesson Eight: When to sell your dividend stocks?

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5 Hot Dividend Stocks

Many people labor under the delusion that dividends are no longer important. 

That's simply wrong. Over the past 20 years, dividends - and the reinvestment of those dividends - accounted for 32 percent of the total return from stocks. And this in a time when many investors scorned dividends as obsolete! 

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Dividend Investors Should Focus On Stocks, Not The Market

The election may be settled, but investors fears are not. When Trump was first elected, the market plunged on worries of what he would do.  Since then the markets have gone up and down based on what crazy news story came out that day, but the overriding direction has been up over the last year. Is it a stock market, or a yo-yo?

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Weekend Reading Links - October 29, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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One Raise at a Time | The Duck Quacks Again

Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?  Dividend growth investing is far from a get rich quick investment strategy, rather you need to remain focused on the long term goal to be successful.
On Tuesday of last week the Board of Directors at Aflac (AFL) announced an increase to their quarterly payout.  Previously the company had been paying $0.43 per share and now they'll be paying $0.45.  That's a solid 4.7% pay raise.  Aflac is a Dividend Champion with 34 consecutive years of dividend growth.  Shares currently yield 2.14% based on the new annualized payout.

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American Water Works; I’m Raising My Glass to its Growth

Summary

• American Water Works operates a small monopoly and sells essential products.
• The water treatment business is highly fragmented.
• There are lots of room for dividend growth in the upcoming years.

What Makes American Water Works (AWK) a Good Business?

American Water Works sell the perfect product: water. This utility company provides regulated and market-based drinking water, wastewater services and other related services to an estimated 15 million people in 47 states and in Ontario, Canada. The best part of it, AWK still has lots of room for growth as its market is highly fragmented in the U.S.:

Source: AWK website

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Cryptocurrencies – Getting My Feet Wet

I was glad to see a lot of interest and follow up questions and comments from readers on the Blockchain post last week. As I mentioned in that post, I have been spending the better part of the summer reading voraciously and learning anything and everything I can on the topic. This area of technology has completely grasped my imagination and I can't help but try to make sense of things currently and envision what the future economies will look like. Rest assured, I think most industries will be disrupted – some for the better, some for the worse in the coming years/decades as the blockchain tech improves rapidly.

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