The Dividend Mailbox®

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To start our fourth year of The Dividend Mailbox, Greg is joined by Daniel Peris, author of The Ownership Dividend: The Coming Paradigm Shift in the U.S. Stock Market and Head of the Income and Value Group at Federated Hermes. Daniel's deep historical perspective and expertise offer valuable insights into the future of dividend growth strategies and the importance of sustainable dividend investing.

Their conversation covers a range of topics including:

• Historical context and the evolving dynamics of dividend growth investing.
• Challenges and opportunities in the dividend space, including the impact of interest rates and market cycles.
• The role of stock buybacks and their effectiveness in shareholder returns.
• Strategies for managing dividend cuts and maintaining a high and rising income stream.
• The foundational importance of cash flow for all investors.

Follow Daniel on X/Twitter @HistoryInvestor

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter! 

In today's episode, Greg dives into a practical application of our dividend growth strategy by discussing a recent buy, a watch, and a sell. 

He starts the episode with Hershey (HSY), exploring why this classic chocolate maker made it into our portfolio despite soaring cocoa prices. Although it may sound like a boring name,  companies like this can generate outsized long-term returns. 

For the watch candidate, Greg turns his attention to CVS Health (CVS). Despite its financial strength and attractive valuation, he discusses CVS's coming headwinds. Sometimes when there is a lot of negative sentiment surrounding a company, there is potential to make a lot of money. 

Lastly, Greg explains his decision to trim our position in Emerson Electric (EMR). Even though it is a long-time dividend growth stalwart and has seen strong price performance recently, it no longer meets our dividend growth criteria.

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter! 

Between immediate information on the Internet and minute-by-minute stock quotes at your fingertips, investors appear to be more infatuated with price appreciation than anything else. In contrast, prior to the 1990s, investors primarily focused on earning returns through a cash flow of dividends. Even though there has undoubtedly been a shift from cash-focused investing to a market fixated on price performance, cash flows play a critical role in assessing company valuation.

In this episode, Greg examines wisdom from "The Ownership Dividend: The Coming Paradigm Shift in the US Stock Market." Through several excerpts, he exposes how important dividends are to the structure of the market, investor goals, and company valuation. In the second half of the episode, Greg looks at Williams-Sonoma which has appreciated 200% since we first bought it two years ago. He analyzes whether its recent outperformance should warrant selling it to lock in gains.

EDIT: In the episode, Greg comments that our Williams Sonoma position has appreciated 300%, however, it has only appreciated 200%. The stock prices were given, so simple calculations could identify this error. 

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!
Check out our Union Pacific Investment Report

In most cases, holding quality stocks for the long term tends to play out in favor of the investor. However, if a company’s prospects change, there are situations where exiting a position can be warranted. 

In this episode of The Dividend Mailbox, Greg outlines our decision-making process behind selling off a portion of our IBM position. What started as a turnaround play transformed into a potential value trap. Using IBM as an illustration, Greg provides insight into the complexities of owning dividend growth investments and taking advantage of opportunities to exit positions that don't meet your expectations. 

Plus, get a sneak peek into next month's episode featuring a success story with Williams Sonoma, highlighting the potential rewards of high-conviction investments in the dividend growth landscape.

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!
Check out our Union Pacific Investment Report

In this episode, Greg analyzes the wisdom of renowned economist, Jeremey Seigle. Between his investing classic "Stocks for the Long Run," and "The Future for Investors," Siegle maintains that you don't need high growth numbers or a flashy industry, only consistent growth. Although it is seemingly counterintuitive, Seigle presents the power of compounding from a new perspective. Most investors would hope stocks go up, and the quicker the better. But there is an argument for how a stock that goes sideways, or even downward, can be beneficial to your long-term total return.

Later, Greg provides an update on Emerson ($EMR) where faster dividend growth seems to be on the horizon. In case you missed it, the original Emerson Electric ($EMR) story is linked here: EP 17 - The Dilemma with Slow Grow

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!
Check out our Union Pacific Investment Report

Over the past decade, the oil industry has become increasingly controversial and subsequently neglected by investors. No one knows when the industry's expiration date will come due, but there are great value and dividend growth investments to be made in the meantime. Even in declining industries, there can still be big winners. 

For episode 31, Greg focuses on Chevron's resilience in a politically incorrect landscape, including its recent Hess acquisition. He explores the intersection of environmental concerns and the indispensability of oil in everyday life, with investing as the backdrop. Despite the industry's challenges, he makes a compelling case for Chevron's sustainable dividend growth and long-term potential.

Send us Fan Mail

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

________

If you found this valuable, subscribing and leaving a review helps more investors find the show.

Instagram | Facebook | LinkedIn | X

________ 

Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!
Check out our Union Pacific Investment Report

Do you feel confident that the dividends in your portfolio are healthy? What techniques can you use to get a clearer picture of a company's long-term dividend growth prospects?

This month, Greg examines a simple 3 decision model from Aswath Damodaran to determine how companies create value for shareholders, and what it means for you as a dividend growth investor. He draws the line between companies that pay a healthy dividend and companies that are in a dysfunctional dividend mindset. As part of that, Greg gives you two simple models to employ when you're considering a company's dividend-paying capability. Later he takes a moment to discuss some of the wisdom of the late Charlie Munger. 

Models used in today's Episode:
ROIC Model - (Excel download)
Excess Cash Flow Model - (Excel download)
DCM Investment Reports & Models - (Website)


Happy Holidays from The Dividend Mailbox!

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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If you found this valuable, subscribing and leaving a review helps more investors find the show.

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!

There is a huge difference between understanding compounding and actually understanding the numbers behind it. As a blanket term, compounding is thrown around in the investment arena often, yet few investors are actually patient enough to experience its full potential. Creating real wealth takes time, discipline, and strategy.

In this episode, Greg uses our model portfolio to look at a couple of examples that expose just how significant your portfolio income can be when you have the discipline to let it grow. Moreover, he makes the case that income growth, rather than price growth, has a larger impact on the long-term value of your portfolio. Later, he likens the mindset of dividend growth investing to Odysseus's voyage.

Send us Fan Mail

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!

To most investors, big returns are associated with exciting stories or cutting-edge technology. Since everyone is in the market to make as much money as possible, “boring” companies can be easily dismissed without much second thought. That line of thinking is straightforward enough but it may be misguided. Truthfully, some of the better-performing companies out there are actually pretty boring. When it comes to achieving attractive returns, it is not what a company does that is important, it is how well they do it. 

In this episode, Greg embarks on a deep dive into Union Pacific Railroad ($UNP) and the broader railroad industry. He makes the case that railroads are extremely predictable, well run, and have provided investors with decades of market-beating returns. Railroads are probably not your first idea for building wealth, but these companies are cashflow-compounding machines. This episode is a little bit deeper than we have gone in the past, but it makes for a compelling story. 

Send us Fan Mail

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

More on dividend growth investing  -> Join our market newsletter!

Is there a difference between being intelligent and being smart? Most people would think of those concepts as one and the same. Although it may be abstract, these are two separate schools of thought entirely. You may go so far as to characterize intelligence as left-brain thinking, and smarts as right-brain reasoning. How does that apply to investing? If you’ve ever regretted an investment decision before, it may have been due to an overreliance on numbers, data, or rules, and not enough on vision.

For our 27th episode, Greg takes a step back and examines a recent blog post from Morgan Housel. He starts out by contrasting intelligence vs. smarts, then uses several examples to show how it relates to investors. He applies this mindset to everything from analyzing America’s deficit problems, to honestly reflecting on his own thought process when he sold Intel ($INTC) several months ago. Greg wraps up the episode by introducing a new stock idea, United Pacific ($UNP), and sets the stage for a deeper dive next month.

Links referenced in today’s episode are below:

Morgan Housel's blog -> Intelligent vs. Smart

Greg's newsletter on America's Debt and Deficits -> Debt, Denial, & Illusions: America Has a Spending Problem

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Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models 

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If you found this valuable, subscribing and leaving a review helps more investors find the show.

Instagram | Facebook | LinkedIn | X

________ 

Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.