Finding Dividend Payment History...

Today we'll find out how to verify the history of dividend payments for a particular company. As I have mentioned in my presentations, the best way to find out if the company management is committed to shareholders is by the consistent increase of the dividend over time. Let's get started with how to verify if a company is well managed and cares about it's shareholders.

Using Yahoo!Finance as our starting point we first need to select the company that we're interested in. In the image below, I have selected Mine Safety Appliances (MSA). In the left hand column select the section that says HISTORICAL PRICES. (click on image)

Next, select the tab that says DIVIDENDS ONLY. This is where you'll be able to actually see all the dividend history for the stock that you're interested in. (click image below)

Next, look to see if the company that you have selected has a history of increasing its dividend either every year or every other year. At the very least, companies that haven't cut their dividend, even during tough economic times, are probably better suited to stay profitable or recover faster when the economy turns around. (click on image below)

Finally, in order to be sure that this information is accurate you now have to find at least one other source to confirm the information that is on Yahoo!Finance. I like to get my other source information from Morningstar.com, MergentOnline, or Valueline.com. If you only use one source for your information you might not find out that there is a mistake until it is too late.

• Click here to ask quesions or send comments.

Ex Dividend Date Information...

The question for today is, "where can a person find the EX-DIVIDEND DATE information on a stock?"



Using Yahoo!Finance as a source, the ex-dividend date can be found on the KEY STATISTICS section near the bottom. A sample of ex-dividend date is circled in red of the following image (click on image).

Using Yahoo!Finance, can you find the ex-dividend date for MacDonald's? Post your answer by clicking the "comments" link below.

Warren Buffett said...

In the following quotes we get to understand why Warren Buffett is known as one of the world's best investors.

Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like--anything like--they've performed in the past 17 [years]. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate--repeat, aggregate--would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%. If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.

Loomis, Carol. "Mr. Buffett on the Stock Market." Fortune, Nov 22, 1999. p212.

Investors who expect in aggregate, if they expect to get more than six or seven percent a year over the next ten or twenty years, I think they're likely to be disappointed.

Interview of Warren Buffett by Nightly Business Report executive editor Linda O'Bryon. April 28, 2001.

At the following link, can you find the compound annual growth rate (CAGR) of the S&P 500 Index from 1999 to 2008 and 2001 to 2008? Post your answers by clicking the "comments" link below.

Book Value, Balance Sheet and Valueline

Question From a Student

I was thinking about stocks over the weekend and something about book value bothered me. Assume you have a large company with a high book value relative to their stock price. Lets say its a company that owns real estate. Wouldn't it be very hard to extract the equity from the company assets because it is hard to sell property, especially in this type of economy? So, would this mean that, even though the company might look promising because of a high book value, it might not be a good buy?

Going on the same thread. When you look at a balance sheet, how can you tell what type of assets the company has? On the Yahoo Finance sheet, it has Property/Plant/Equipment, Long Term Investments, Goodwill, and other stuff. What type of assets go in which category?

Oh yeah, is there any way to read Valueline online? It's kind of hard for me to go to the library, so I wanted to see if there was a website or something that had the same info.

A Response in the Comment Section Below

Banks and Information Resources

Question From a Student:

I have a couple new questions. First, if banks like Citi and BoA are so horrible at managing assets, are they only afloat because the government has helped them out in the past several decades? Also, what would be the hypothetical situation if one or several of these banks collapsed because the government didn't bail them out? Finally, assuming that these banks fail, could the smaller, profitable, and efficient banks fill in the financial vacuum before the entire system collapsed like in the Great Depression?

About those small investment banks that don't pay as much and thrive. What are the names of some of those banks? Maybe we could have a look at them next Tuesday

Last question. How can a prospective investor find out a company's business model, strategies, and inside information? I'm sure that this information would be just as valuable as the key statistics that is published on Valueline and Yahoo.

A Response in the Comment Section Below

A Question of Executive Compensation

Question From A Student:

Today, I was watching a news report that stated that President Obama has placed salary caps of $500,000 on all of the executives working for companies that received bailout money. Apparently, the reason was that the general public felt that the executives were being lavishly paid for losing billions in the financial crisis. However, this type of financial justice seems more retributive than restorative. I feel that capping the salaries of executives will only cause them to flee a company like rats from a sinking ship. A perfect example of this is when Salomon collapsed in the early 1990's and nearly brought the financial world into chaos.

According to Buffet's experience managing Salomon after becoming interim chairman, when he tried to slash $110 million from their nearly $1 billion bonus pool, a large amount high level executives, bankers, traders, and lawyers as well as midlevel bond and stock salvesmen walked out the door after receiving their significantly reduced bonus (The Snowball, p610-611). The administration's argument to this "brain drain" is that there isn't anywhere to run because most of the large financial companies have already recieved bailout funds. Thus, if an executive didn't like it, too bad you have to stay.

Also, what will happen to the bondsmen and traders, who also earn a high salary, but have little to nothing to do with the financial crisis? Should they be punished just the same as the executives as well?Unfortunately, I believe that this is an extreme miscalculation on President Obama's part. Capping the salary of executives will not prevent financial mishaps from happening. On the contrary, it may worsen the current financial crisis. First, many of these executives have enough money to buy a mansion and live the rest of their lives in financial bliss. In addition, many of those same executives could jump ship and form a new company to do the same thing all over again.

Once again, I will use Salomon as an example. Meriwether, the arbitrage king of Salomon, was fired for neglecting to supervise an employee who frauded the Treasury out of billions in bonds. After being fired, he formed his own firm, Long Term Capital, with other people from Salomon to trade in lucrative but high risk stocks and bonds. Later, his firm crashed as well, bringing another financial crisis similar to the Salomon crisis.

A Response is in the Comment Section Below.