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Simply Safe Dividends March 2018 1
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Intelligent Income Quality dividend ideas for safe income and long-term growth
Monthly Recap
After 15 consecutive months of gains, the S&P 500 (SPY) finally
hit a rough patch, correcting around 10% from its all-time high
reached in January before finishing down 3.6% in February.
The market’s year-to-date return remains positive but less
impressive at 1.8%. The good news is that the S&P 500’s
valuation is beginning to look more reasonable as stock prices fall
and corporate profits continue growing.
According to FactSet, the S&P 500’s forward 12-month P/E ratio
is 16.7, which is close to its five-year average of 16.0 but above its
10-year average of 14.3. Analysts expect robust earnings growth of
18% in 2018, driven in large part by lower corporate taxes.
Rising earnings lead to rising dividends, and S&P 500 companies
have increased their payouts by about 14% on average thus far in
2018. More than a fifth of S&P 500 companies have raised their
dividends this year, and none have reduced their payouts. That’s
the first time we’ve seen this happen since 2011, according to data
cited by The Wall Street Journal.
While collecting a higher dividend is nice, a safe 3%, 4%, or 5%
yield doesn’t feel so great when a portfolio’s value tumbles 10% or
more during a market correction. Many conservative dividend
investors are wondering how to respond to the market’s increasing
volatility, especially as many high-yield stocks have been hit hard.
In This Issue
Portfolio Updates
Performance……..…………...6
Top 20 Stocks………….…...10
Cisco delivers another strong earnings report
Conservative Retirees…….20
Selling OHI, TRI, adding stakes in five new stocks
Long-term Growth………...37
TJX and TXRH boost dividends by 25%, 19%
Idea Generation
Safe Dividends…………......46
Growth Dividends……...….47
High Yield Stocks…….……48
Dividend Increases…........49
Ex-Dividend Dates….….....50
Resources
Our Best Dividend Articles
Dividend Safety Scores
Quote of the Month
“I've found that when the market's
going down and you buy funds
wisely, at some point in the future
you will be happy.” – Peter Lynch
March 2018 Published on 3/4/18
Simply Safe Dividends March 2018 - 2 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Market corrections are uncomfortable. Paper profits shrink, news headlines sour, fear quickly
sets in, and many emotionally-driven questions arise – should I sell some of my shares to lock in
profits? Is a major bear market ahead of us? Is now a good time to put some cash to work?
To help answer these questions, I analyzed the S&P 500’s historical levels from the start of 1950
through March 1, 2018. I recorded each time the stock market lost at least 10% from a historical
all-time high, noting how big the slump was (the “Price Decline” column below) and how long
the downturn lasted until the market had recovered back to its previous all-time high (the “Peak-
to-Trough-to-Recovery Total Days” column on the far right measures).
Since 1950, I observed 25 corrections (10%+ declines) from the S&P 500’s past all-time highs,
including 10 bear markets (20%+ declines). That’s about an average of one correction every two
to three years. I highlighted the most painful bear markets that had the biggest price declines and
the longest peak-to-recovery periods in red. You can see that each correction had its own flavor.
Peak Date S&P 500 (Points)
Trough Date
S&P 500 (Points)
Price Decline
Recovery Date
Peak-to-Trough-to-Recovery Total Days
6/12/1950 19 7/17/1950 17 -14% 9/22/1950 102
1/5/1953 27 9/14/1953 23 -15% 3/11/1954 430
9/23/1955 46 10/11/1955 41 -11% 11/14/1955 52
3/20/1956 49 5/28/1956 44 -10% 7/16/1956 118
8/2/1956 50 10/22/1957 39 -21% 9/24/1958 783
8/3/1959 61 9/28/1960 52 -14% 1/27/1961 543
12/12/1961 73 6/26/1962 52 -28% 9/3/1963 630
5/13/1965 90 6/28/1965 82 -10% 9/27/1965 137
2/9/1966 94 10/7/1966 73 -22% 5/4/1967 449
9/25/1967 98 3/5/1968 88 -10% 4/29/1968 217
11/29/1968 108 5/26/1970 69 -36% 3/6/1972 1,193
1/11/1973 120 10/3/1974 62 -48% 7/17/1980 2,744
11/28/1980 141 8/12/1982 102 -27% 11/3/1982 705
10/10/1983 173 7/24/1984 148 -14% 1/21/1985 469
8/25/1987 337 12/4/1987 224 -34% 7/26/1989 701
10/9/1989 360 1/30/1990 323 -10% 5/29/1990 232
7/16/1990 369 10/11/1990 295 -20% 2/13/1991 212
2/18/1997 816 4/11/1997 738 -10% 5/5/1997 76
10/7/1997 983 10/27/1997 877 -11% 12/5/1997 59
7/17/1998 1,187 8/31/1998 957 -19% 11/23/1998 129
7/16/1999 1,419 10/15/1999 1,247 -12% 11/16/1999 123
3/24/2000 1,527 10/9/2002 777 -49% 5/30/2007 2,623
10/9/2007 1,565 3/9/2009 667 -57% 3/28/2013 1,997
5/21/2015 2,131 2/11/2016 1,829 -14% 7/11/2016 417
1/26/2018 2,873 2/8/2018 2,581 -10% ? ?
Simply Safe Dividends March 2018 - 3 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
For conservative investors who are around retirement age, generating safe income and
preserving principal are primary objectives. No one wants to risk outliving their nest egg.
Through that lens, some of the data in the table above is scary. The average decline during the
S&P 500’s 25 corrections from all-time highs was 21%, but five of those corrections saw a loss
between 30% and 60%. If an investor was forced to sell stocks (to make income ends meet)
during any of those troughs, the impact on his retirement outlook could have been devastating.
However, I think the more interesting piece of information is the column on the far right, which
measures how many days it took for the S&P 500 to get back to its previous all-time after
peaking. In other words, the peak-to-recovery time essentially represents how long an investor
had to wait for their stocks to return to their full value recorded before the market started
correcting from its all-time high; selling during this window would lock in a capital loss.
The average peak-to-trough-to-recovery time across the 25 market corrections was 631 days, or
about 1.7 years. (Not surprisingly, many financial advisors wisely recommend that retirees hold
two to three years of living expenses in cash). However, there were four bear markets that
required investors to wait between three years and 7.5 years to see the market get back to a new
record high. That’s a long time to stay patient and maintain faith in a buy-and-hold strategy.
As I’ve said before, I believe the only money one should invest in stocks is money he or she can
financially and emotionally afford to leave untouched for at least five to 10 years. Short-term
performance is just too unpredictable. If you have truly committed to that long-term holding
period, you can sleep a lot better at night and worry less about where the market will go any
given month, quarter, or year.
With that said, I want to address the common temptation to time the market, such as by selling
out of stocks due to fears of a downturn, or by hoarding cash on the sidelines out of fear that the
market is too expensive to start investing. These are irrational worries when time is on your side.
Suppose an investor, let’s call him Jinxed Jeff, had superb longevity but awfully poor luck. Jeff
invested $1,000 at each all-time high in the market immediately before a correction began,
starting in 1950. In other words, he only made 25 investments (each $1,000, adjusted for
inflation since 1950) from 1950 through 2018 at each market peak, and he never sold.
Jinxed Jeff would have invested a total of $100,947 spread over 25 purchases of the S&P 500
(remember his $1,000 allotment in 1950 was adjusted for inflation in each future investment
year). He lived through a market correction immediately after putting fresh money to work each
time. What do you think Jeff’s portfolio was worth on March 1, 2018?
Simply Safe Dividends March 2018 - 4 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
If you guessed Jeff’s portfolio lost money or largely treaded water, you would be wrong. In fact,
Jeff’s portfolio actually increased tenfold, growing from the $100,947 he invested to $1,089,897.
It is virtually impossible to lose money investing in a diversified portfolio of stocks over the
long term. I know what you’re thinking – no one has the luxury of investing cash for 68 years
like Jeff. What if my window is 10 or even just five years?
The chart below plots the S&P 500’s trailing five-year annualized price return. In other words,
the chart shows how much the S&P 500’s price increased per year over the five years ending on
each date along the horizontal access. After crunching the numbers, the S&P 500’s average
annual price return over these five-year rolling windows was 7.6% since 1950. Importantly, the
S&P 500’s price declined in only 18% of these rolling periods.
To put it another way, if you invested with a blindfold in the S&P 500 at any point in time over
the last 68 years and held your position for five years before selling, you had an 82% chance of
getting all your capital back and then some, with an expected average annual gain north of 7.5%.
The longer you can hold stocks, the better your odds of avoiding losses and preserving and
growing your capital. The chart on the next page shows the S&P 500’s rolling 10-year price
returns on an annualized basis. The average annual 10-year trailing return was around 7%, and a
capital loss was recorded in only 8% of the periods measured. It’s hard not to like those odds.
That’s especially true when you look at “safer” alternatives. For example, a 10-year Treasury
yields 2.86% today. Sure, you are guaranteed to get your capital back if you hold these bonds for
10 years until maturity, but your return will only be 2.86%, likely below the pace of inflation.
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S&P 500 Index Trailing 5-Year Annualized Return
Simply Safe Dividends March 2018 - 5 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Investing in a diversified basket of stocks for 10 years has historically given you more than a
90% chance of not only getting your capital back, but enjoying 7% or more annual gains to help
ensure you do not outlive your nest egg. From that perspective, investing heavily in long-term
government bonds for safety could actually be a riskier approach for some investors in today’s
low-yield world since they are reducing the long-term growth potential of their retirement funds.
The bottom line is that you need to figure out how much money you can comfortably invest in
stocks for the long term (5-10+ years). If your holding period is fairly long, there is little reason
to worry about inevitable corrections or buying stocks near the market’s short-term top. Staying
the course and maximizing your time in the market are the most important factors.
Understanding your unique financial situation, long-term goals, and risk tolerance is really the
only way to answer questions about how to position your portfolio’s mix of stocks, bonds, and
cash; it depends on the individual. Once you have figured out how much money you are
comfortable leaving invested and untouched for the long term, your nest egg’s positioning
probably shouldn’t change at all in anticipation of any type of future market movement.
As we’ve seen, it is certainly possible for the stock market to drop upwards of 50% and
potentially take several or more years to recover back to a new all-time high. If that were to
occur, would you be able to remain fully invested throughout the multiyear downturn? How
much volatility can you realistically stomach? How much income do you need, and how reliable
are your current income sources?
Now is as good of a time as any to step back, review your financial needs, and reassess your
asset allocation. Don’t let the market’s potential volatility push you into making short-term
decisions that could jeopardize the long-term health of your nest egg and retirement.
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S&P 500 Index Trailing 10-Year Annualized Return
Simply Safe Dividends March 2018 - 6 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Portfolio Performance
Please note that our Conservative Retirees portfolio has a new dividend ETF benchmark.
Vanguard’s High Dividend ETF (VYM) was replaced with the S&P 500 High Dividend Low
Volatility ETF (SPHD). SPHD’s sector mix is much more reflective of a retirement portfolio
(VYM does not invest in REITs, for example), and it offers a higher yield that is more aligned
with our portfolio. This change makes our long-term relative performance somewhat weaker.
The annualized returns of our portfolios since inception remain unusually strong, ranging from
11% to 18%, but this rate certainly won’t continue over the long-term. The market’s average
annual return over most long-term periods has been below 10%, and today’s relatively high
valuations suggest returns over the coming years will be lower compared to recent history.
While I don’t expect our performance to deviate all that much from the market’s over time, I do
expect to generate higher, safer, and faster-growing dividend income with less volatility. Here is
each portfolio’s total return performance in February, year-to-date (YTD), over the trailing 12-
month period (1 Year), and since inception. Returns for the S&P 500 and relevant dividend
ETFs are provided for comparison purposes.
As of 2/28/2018
Annualized
Inception
Date
February
2018 YTD 1 Year
Since
Inception
Top 20 Dividend Stocks Portfolio 6/12/2015 -3.63% 0.58% 13.89% 16.47%
S&P 500 Index (SPY) -3.64% 1.79% 17.11% 12.25%
Schwab U.S. Dividend Equity ETF (SCHD) -5.63% -1.33% 15.85% 13.02%
Conservative Retirees Portfolio 6/17/2015 -4.66% -3.97% 4.57% 11.13%
S&P 500 Index (SPY) -3.64% 1.79% 17.11% 12.20%
S&P 500 High Dividend Low Volatility ETF (SPHD) -6.77% -6.54% -0.49% 11.65%
Long-term Dividend Growth Portfolio 6/9/2015 -4.36% -0.42% 18.42% 17.27%
S&P 500 Index (SPY) -3.64% 1.79% 17.11% 12.52%
Vanguard Dividend Appreciation ETF (VIG) -4.03% 0.78% 16.03% 12.20%
Additional performance information for the portfolios, including their dividend growth track
records, can be found in each portfolio’s section of this newsletter.
Simply Safe Dividends March 2018 - 7 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
The amount of risk taken to achieve a certain return is equally important. Standard deviation is a
common measure of risk used by investors. It measures the historical volatility of a portfolio or
investment. Lower volatility indicates that an investment’s return fluctuates less.
The following table shows the monthly volatility of our portfolios compared to the S&P 500’s
volatility. Our Top 20 and Conservative Retirees portfolios have been less volatile than the
broader market since inception by approximately 7% and 16%, respectively. Assuming this
trend continues, these portfolios will likely do a better job than the broader stock market of
preserving capital during the next market correction.
Our Long-term Dividend Growth portfolio has been somewhat more volatile than the market,
reflecting its focus on smaller companies with higher long-term earnings growth potential.
Monthly Standard Deviation
(Since June 2015 Inception)
Monthly Volatility Top 20 Retirees Growth
Portfolio 2.81% 2.54% 3.41%
S&P 500 3.03% 3.03% 3.01%
% Difference -7.26% -16.17% 13.29%
Dividend Events
PepsiCo (+15%), Cisco (+14%), Altria (+6%), PPL (+4%), Waste Management (+9%), FLIR
(+7%), Texas Roadhouse (+19%), and TJX Companies (+25%) announced new dividend
increases during the last month. Since inception in June 2015, we have recorded 198 total
dividend increases across our three portfolios and avoided dividend cuts.
Dividend Events Since Inception
Top 20 Retirees Growth
Increases 58 73 67
Cuts 0 0 0
Portfolio Actions
Our portfolios have very little trading activity most months. After all, I buy each company with
hopes to hold it forever, so long as its dividend remains safe and its long-term outlook continues
to appear attractive. No trades are planned in our Top 20 Dividend Stocks or Long-term
Dividend Growth portfolios.
However, in our Conservative Retirees portfolio, I plan to exit our stakes in Omega Healthcare
(OHI) and Thomson Reuters (TRI) when the market opens on Monday, March 5. Omega’s
outlook continues weakening as the healthcare landscape evolves. Although OHI’s dividend is
Simply Safe Dividends March 2018 - 8 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
expected to remain safe this year (2019 and beyond is much murkier given industry headwinds),
it will be frozen at its current level. With many higher quality dividend stocks selling off in
recent months, more attractive businesses with lower risk profiles and safer payouts are
available. You can read my latest note on OHI here.
Thomson Reuters’ payout remains safe, but I don’t expect any growth going forward. Earlier
this year the company announced an agreement to sell a 55% stake in its Financial & Risk
segment, which provides financial terminals and accounted for around half of its profits. The
deal is fairly complicated, but Thomson’s ongoing earnings power will drop, its effective
leverage will be higher, and most of the cash received is going to share repurchases and
acquisitions. With the stock only offering a 3.5% yield with no dividend growth and strategic
uncertainty, I would rather move on to other ideas.
Proceeds from our sales of Omega Healthcare and Thomson Reuters, along with existing cash
on hand, will be invested across five new companies, which will each represent around 2% of
our portfolio’s total value: Duke Energy (DUK – 35 shares), WEC Energy Group (WEC – 48
shares), W.P. Carey (WPC – 46 shares), Public Storage (PSA – 14 shares), and United Parcel
Service (UPS – 26 shares). These stocks have all declined meaningfully in recent months and
appear to be high quality businesses trading at reasonable valuations.
The total number of holdings in our Conservative Retirees portfolio will increase from 26 to 29,
providing greater income diversification without stretching us too thin. With long-term capital
preservation being a key goal, spreading our bets out a little more reduces company-specific risk
and should help keep the volatility of our returns and income stream relatively low over time.
Besides improving our dividend safety, I expect these moves to raise our dividend growth
outlook (our portfolio’s five-year annual dividend growth rates moves up from 5.9% to 6.3%)
and increase our projected annual income by close to 4% as we put some cash to work. Our
portfolio will remain diversified with no sector accounting for more than 19% of its value.
Timely Holdings to Consider
A handful of companies from each portfolio appear to offer interesting valuation and
fundamental timeliness. These are stocks we hold that investors can review as potential buying
opportunities:
Top 20 Dividend Stocks Dividend
Safety Score
Forward
P/E
Dividend
Yield
5-Yr Annual Div
Growth Rate
Omnicom (OMC) 92 13.4 3.17% 13%
Kimberly-Clark (KMB) 88 16.6 3.55% 6%
Simply Safe Dividends March 2018 - 9 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Dominion Energy (D) 75 17.9 4.61% 8%
PepsiCo (PEP) 98 19.1 2.95% 8%
Conservative Retirees Dividend
Safety Score
Forward
P/E
Dividend
Yield
5-Yr Annual Div
Growth Rate
Crown Castle (CCI) 61 18.9 4.02% N/A
Kimberly-Clark (KMB) 88 16.6 3.55% 6%
National Retail (NNN) 94 14.1 5.04% 4%
Dominion Energy (D) 75 17.9 4.61% 8%
ExxonMobil (XOM) 71 16.6 4.08% 7%
Duke Energy (DUK) 80 16.0 4.72% 3%
WEC Energy (WEC) 85 18.0 3.72% 12%
W.P. Carey (WPC) 61 11.1 6.72% 10%
Public Storage (PSA) 91 19.7 4.10% 13%
United Parcel Serv. (UPS) 71 14.5 3.45% 8%
LT Dividend Growth Dividend
Safety Score
Forward
P/E
Dividend
Yield
5-Yr Annual Div
Growth Rate
Hormel (HRL) 98 19.9 2.23% 18%
Medtronic (MDT) 98 17.7 2.18% 12%
Lowe’s (LOW) 98 17.7 2.18% 12%
Thank you for your continued support of Simply Safe Dividends.
Sincerely,
Brian Bollinger, CPA
CEO, Simply Safe Dividends
Simply Safe Dividends March 2018 - 10 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Top 20 Dividend Stocks Portfolio Update
Our worst performers in February
were Verizon (-11%), Wells Fargo (-
11%), and Altria (-11%).
No news was out on Verizon, who last
reported decent earnings in January.
The company is no longer under
review for sale in our portfolios and
remains a long-term hold. You can
read our full thesis here.
Wells Fargo sold off with other banks
and remains challenged by the U.S.
Federal Reserve’s announcement of
an unprecedented action to limit the
company’s growth. Specifically, the
bank cannot exceed the $1.95 trillion
assets it had at the end of 2017 until it
shows improvement in its risk controls
to avoid a repeat of the sales-practice
scandal that emerged in 2016.
Wells Fargo expects the action will
reduce its profits by $300 million to
$400 million this year (compared to
more than $20 billion in net income)
but is confident it will satisfy the
requirements of the consent order it
agreed to with the Fed. The order is
not related to any new matters, but to
prior issues where Wells Fargo is
working to make progress.
The Fed’s actions will not affect the
bank’s financial condition, and WFC’s
dividend should remain safe. The
company expects to get the
restrictions lifted within the next year,
hopefully minimizing the impact of
the penalty, but the uncertainty
continues to weigh on the stock,
which is under review for potential
sale in our portfolio.
Altria reported healthy earnings on
February 1 and raised its dividend 6%.
The company remains a hold.
Portfolio Statistics Dividend Yield: 2.8% Fwd P/E Ratio: 16.5 Beta: 0.83 Dividend Safety: 83 Dividend Growth: 54 1-yr Sales Growth: 2.1% 1-yr EPS Growth: 6.8%
Performance Update 2/28/18 Feb. All
Portfolio -3.6% 51.4% S&P 500 -3.6% 36.9% SCHD -5.6% 39.5%
Dividend Increases: 58 Dividend Decreases: 0
Portfolio Objective Outperform the S&P 500 by at least 1% per year over any five-year rolling time horizon.
Return Drivers Total return is expected to be composed of:
2.5% - 3.5% dividend yield 7% - 9% earnings growth
Investment Philosophy We invest in companies with enduring competitive advantages, shareholder-aligned management, and large markets that provide opportunity for long-term growth. Our holdings offer a blend of current income and income growth and are accumulated when they appear underpriced.
Portfolio Turnover When we initiate a new position, we expect to hold it for at least 3-5 years. We only sell if fundamentals structurally change or the valuation reaches excessive levels.
Performance Update
Our Top 20 Dividend Stocks
portfolio returned -3.6% during the
month of February, in line with the
S&P 500 (SPY) and topping
Schwab’s Dividend ETF (SCHD).
Since inception in June 2015 the
portfolio has returned 51.4% and
outperformed the S&P 500 (36.9%)
and Schwab’s Dividend ETF
(39.5%). During this time, the
portfolio has also recorded lower
volatility than the market.
Our best-performing stocks in
February were Cisco (+8%),
Broadridge Financial (+4%), and
Boeing (+3%).
Cisco reported solid earnings on
February 14. Sales grew 3%, and
its mix of recurring revenue was up
2 points to 33%. Management
expects low-single digit growth to
continue and boosted the dividend
by 14%.
Broadridge reported earnings on
February 8 and raised guidance.
Boeing continued flying higher
after reporting cash flow figures in
January that were well ahead of
analysts’ expectations. Airlines,
Boeing’s customers, are enjoying
strong air traffic growth, fueling
demand for planes. The company’s
production output continues rising,
and Boeing is one of the biggest
winners of corporate tax reform.
Simply Safe Dividends March 2018 - 11 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Dividend Events
Our portfolio recorded three new dividend increases during the last month, bringing the total payout
raises since inception in June 2015 to 58. We have not experienced any dividend cuts.
PepsiCo increased its dividend by 15%, beginning with its June 2018 payment and representing its 46th
consecutive annual payout raise.
Cisco hiked its dividend by14% and has increased its payout every year since it initiated a dividend in
2011, recording 31% annual growth over the last five years.
Altria raised its dividend by 6%, recording its 52nd
payout raise in the past 49 years.
Stocks to Consider Buying
The stocks that look the most interesting to me today are: Omnicom (OMC), Kimberly-Clark (KMB),
Dominion Energy (D), and PepsiCo (PEP).
Omnicom (OMC): Omnicom is one of the largest providers of advertising and marketing
communication services. The company holds more than 1,500 advertising agencies that specialize in over
30 marketing disciplines. A full-service agency provides numerous services, including designing ad
campaigns, making the actual ads, determining where the ads should be placed and distributed, media
buying, accounting management, public relations, consulting, and more.
Competitive Advantages
As one of the biggest agency networks in the world, Omnicom gains several advantages over smaller
rivals. It can act as a one-stop shop for clients because it offers a much wider breadth of services and
operates around the world. Clients prefer work with a small number of agencies to save on costs, and
many of the relationships Omnicom has span multiple decades. There are also only a few other large
agency networks and many of them have relationships with clients’ competitors, raising switching costs
for existing clients. Our full investment thesis on Omnicom can be seen by clicking here.
Dividend Review
Dividend Safety Score: 92 Dividend Growth Score: 69 Dividend Yield: 3.17%
Omnicom has paid uninterrupted dividends since its founding in 1986 and boosted its dividend each year
since 2010. Management announced a 9% dividend increase in October 2017, and the dividend has
plenty of room for continued growth given Omnicom’s 45% payout ratio, healthy balance sheet, and
consistent earnings growth.
Recent News
Omnicom reported earnings on February 15. The company’s organic sales grew 1.6%, diluted earnings
per share increased 5.4%, and operating margins expanded from 14.2% to 14.8%. However, investors
have sold off global ad agencies over the past year. Many large brands (i.e. ad agency customers),
especially in the consumer staples sector, are facing growth headwinds as consumer behaviors evolve.
The continued rise of digital technology (i.e. marketers trying to become more efficient with their
spending) and potentially growing threats from Google and Facebook are causing concern as well.
Simply Safe Dividends March 2018 - 12 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
In an increasingly tech-driven world, I believe advertising firms remain important for clients facing
disruption to their business models. Omnicom continues delivering better results than its peers and
appears to be trading at an attractive valuation. I plan to continue holding the stock for the long-term.
Valuation
OMC’s forward P/E ratio was 13.4 and its dividend yield was 3.17% as of 3/4/18. The stock’s dividend
yield remains significantly above its five-year average, reflecting investors’ fears over future growth:
Kimberly-Clark (KMB): Kimberly-Clark has been in business since 1928 and has grown into one of the
largest global manufacturers of various tissue and hygiene products. Some of the company’s key products
are disposable diapers, training pants, baby wipes, incontinence care products, tissues, toilet paper, paper
towels, napkins, and more. Kimberly-Clark’s major brands include Huggies, Pull-Ups, Kleenex,
Cottonelle, Kotex, Scott, and Depend. Products are primarily sold to supermarkets, mass merchandisers
(Wal-Mart is a 10%+ customer), drugstores, and other retail outlets.
By segment, Personal Care (diapers, training pants, wipes, feminine and incontinence care) accounts for
approximately half of the company's sales and operating profits. Consumer Tissue (facial tissue,
bathroom tissue, paper towels) contributes another third of Kimberly-Clark's mix, and K-C Professional
(facial tissue, bathroom tissue, paper towels for away-from-home use, safety products) generates the
remainder. North America accounts for 65% of profits, followed by Asia / Latin America (28%).
Competitive Advantages
Kimberly-Clark gains advantages from its size, strong brands, and product innovation. As one of the
largest players in most of its markets, the company’s manufacturing scale allows it to produce products at
a lower cost than most of its rivals. These extra profits can be invested in advertising, which Kimberly-
Clark spends more than $600 million on each year to defend its shelf space and keep its products popular
with consumers. Breaking the company’s distribution channels would be very difficult for new entrants,
and Kimberly-Clark has the financial resources necessary to invest in R&D or marketing if a new product
trend emerges. Finally, the company’s strong exposure to emerging and developing markets is worth
highlighting. Demand for many of Kimberly-Clark’s products tracks population growth, so the company
Simply Safe Dividends March 2018 - 13 -
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is reasonably well positioned to combat potentially stagnant growth in developed markets. Our full
investment thesis on Kimberly-Clark can be seen by clicking here.
Dividend Review
Dividend Safety Score: 88 Dividend Growth Score: 54 Dividend Yield: 3.55%
Kimberly-Clark appears to pay one of the safest dividends in the market, supported by the company’s
healthy free cash flow payout ratio near 65%, excellent cash flow generation, recession-resistant business
(sales dipped just 2% in fiscal year 2009), stable profitability, and investment-grade rated debt.
Kimberly-Clark is a dividend aristocrat that has raised its dividend for 46 consecutive years. The
company’s dividend increased 6.5% per year over the last 20 years and by 4.3% annually during the last
three years. Until earnings growth picks up, the company will likely continue raising its dividend by 3-
6% per year.
Recent News
No update from last month. Kimberly-Clark reported results on January 23. Market conditions remain
challenging over the short-term, but management expects organic sales to return to growth this year, with
margins expanding and adjusted earnings per share to record double-digit growth. The company
increased its dividend 3.1% and announced a major new restructuring program expected to generate $1.5
billion in cost savings through 2021. While Kimberly-Clark has experienced its fair share of headwinds, I
continue to believe the company’s emerging markets reach positions it well for the long-term.
Valuation
KMB’s forward P/E ratio was 16.1 and its dividend yield was 3.55% as of 3/4/18. The stock’s yield
remains above its five-year average:
Dominion Energy (D): Dominion was founded in 1909 and is one of the largest producers and
transporters of energy in the country. The diversified utility company has a portfolio of more than 26,000
megawatts of electric generation, 66,000 miles of natural gas transmission, gathering, storage, and
Simply Safe Dividends March 2018 - 14 -
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distribution pipeline, and 64,000 miles of electric transmission and distribution lines. It operates one of
the biggest natural gas storage systems in the U.S. and serves more than 6 million customers.
Competitive Advantages
Dominion Energy has significantly shifted its portfolio in recent years to reduce its exposure to
commodity prices and focus more on businesses with faster growth, stronger competitive advantages,
better profitability, and lower risk. Today, over 90% of the company’s sales are from regulated
operations, which provide solid cash flow visibility. The company’s electric and gas regulated utility
businesses operate in regions with healthy population growth and constructive regulators who have
historically provided Dominion with favorable rates of returns on its investment. Management is
investing heavily in natural gas, including massive projects such as the Cove Point LNG export terminal
and the Atlantic Coast Pipeline. These projects are expected to generate substantial cash flow (backed by
long-term contracts with customers) as they come online over the next few years, helping Dominion
Energy generate mid to high-single-digit annual earnings growth. Dominion also acts as the general
partner and sponsor of its midstream MLP, Dominion Midstream Partners (DM), which provides low-
cost funding for the company’s expansion plans. Our full investment thesis on Dominion Energy can be
seen by clicking here.
Dividend Review
Dividend Safety Score: 75 Dividend Growth Score: 37 Dividend Yield: 4.61%
Dominion Energy’s dividend payment appears to be quite safe with decent growth prospects. The
company has paid consecutive dividends for close to 90 years and increased its payout for 14 straight
years. Management targets a regulated payout ratio at up to 75%, which is conservative for a utility, and
Dominion has several billion dollars of liquidity available (compared to total dividend payments of $1.7
billion last year). Management expects the company to achieve at least 10% annual dividend growth
through 2020 as its large projects begin generating significant cash flow.
Recent News
No update from last month. As fate would have it, a lot has changed since we initiated a position in the
company in late 2017. Most notably, Dominion made a $14.6 billion dollar bid to acquire SCANA
(SCG). The utilities sector has also dropped on rate-related headwinds. Please review the introductory
comments made in our thesis here for more information. While I generally do not like large acquisitions
and prefer to give the acquiring company more time to digest a deal, Dominion’s selloff and high yield
make the stock look interesting to me today.
Valuation
D’s forward P/E ratio was 17.9 and its dividend yield was 4.61% as of 3/4/18. The stock’s dividend yield
remains at a multi-year high:
Simply Safe Dividends March 2018 - 15 -
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PepsiCo (PEP): PepsiCo is a global food and beverage company with $63 billion in sales, including $1
billion or more from more than 20 of its largest brands (Frito-Lay, Gatorade, Pepsi-Cola, Quaker,
Tropicana, and more). Close to 60% of sales are in North America, which is split roughly 50/50 between
snacks and beverages. In general, snacks carry higher margins than beverages.
Competitive Advantages
PepsiCo has numerous competitive advantages stemming from its scale, strong brands, massive
distribution, and business longevity. PepsiCo is roughly twice the size of its next-largest supplier in food
and beverage, making it a critical supplier for retailers. The company also spends billions of dollars each
year to defend its shelf space, investing in in-store displays, merchandising, and promotional discounts.
PepsiCo’s huge international distribution network also helps it stay relevant by efficiently introducing
new snack and beverage brands around the world. Our full investment thesis on PepsiCo can be seen by
clicking here.
Dividend Review
Dividend Safety Score: 98 Dividend Growth Score: 56 Dividend Yield: 2.95%
PepsiCo has paid dividends since 1965 and raised its dividend for more than 40 consecutive years,
boasting one of the best dividend growth track records in the market. Considering the company’s healthy
payout ratio near 60%, superb cash flow generation, and mid-single digit organic sales growth target, I
expect mid to high-single digit dividend increases to continue.
Recent News
PepsiCo reported earnings on February 13. Excluding foreign currency fluctuations, organic sales grew
2% and earnings per share expanded by 8%. Management also issued guidance for 9% earnings per share
growth in 2018 and announced plans to raise the dividend by 15% beginning with the June 2018
payment. The company continues performing well in an otherwise challenging environment for many
consumer staples businesses.
Simply Safe Dividends March 2018 - 16 -
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Valuation
PEP’s forward P/E ratio was 19.1 and its dividend yield was 2.95% as of 3/4/2018.
Stocks to Consider Selling
In light of its ongoing challenges discussed last month, Wells Fargo (WFC) remains under review for
potential sale in the coming weeks and months. I think we can find a higher quality company in the
financials sector that is better positioned for rising interest rates and long-term growth without so much
hair.
Simply Safe Dividends March 2018 - 17 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Top 20 Dividend Stocks – Portfolio Actions .
= stock is under review for potential sale in the coming weeks and months Data as of 3/4/18
How to Use the Table: Stocks in the “Possible Buying Opportunities” list appear to have relatively attractive valuations and/or more timely fundamental momentum. As such, they
could prove to be the best available investment opportunities to put new cash to work in. Stocks in the “Long-term Holds” list are still expected to be solid long-term holdings, but
they do not appear to have as attractive valuations or fundamental momentum at the moment, suggesting there might be a better opportunity in the future to add more.
Investors looking for stocks with very safe current income and low volatility should look for stocks with dividend “Safety Scores” of at least 50 and “Low” or “Very Low” price
volatility. Investors interested in longer-term income growth should look for stocks with dividend “Growth Scores” of at least 70. Note that scores of 50 are average, 75 or higher is
excellent, and 25 or lower is considered weaker.
Simply Safe Dividends March 2018 - 18 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Top 20 Dividend Stocks – Performance and Dividend Income
Monthly Return Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 0.90% 1.32% 0.10% 1.86% 2.58% 3.79% 1.76% 4.36% -3.63%
S&P 500 0.64% 2.06% 0.29% 2.01% 2.36% 3.06% 1.21% 5.64% -3.64%
SCHD ETF -0.10% 1.66% -0.02% 2.85% 3.61% 4.21% 1.95% 4.55% -5.63%
Portfolio Value $134,445.96 $136,220.15 $136,353.56 $138,894.90 $142,482.68 $147,878.12 $150,481.76 $157,045.94 $151,350.47
Since Inception
Cumulative Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 34.45% 36.22% 36.35% 38.89% 42.48% 47.88% 50.48% 57.05% 51.35%
S&P 500 20.64% 23.12% 23.48% 25.96% 28.93% 32.87% 34.48% 42.06% 36.89%
SCHD ETF 22.83% 24.88% 24.85% 28.40% 33.04% 38.64% 41.34% 47.77% 39.46%
Annualized Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 15.52% 15.56% 14.98% 15.35% 15.97% 17.15% 17.38% 18.64% 16.47%
S&P 500 9.57% 10.22% 9.96% 10.55% 11.22% 12.19% 12.32% 14.22% 12.25%
SCHD ETF 10.54% 10.96% 10.50% 11.48% 12.69% 14.13% 14.53% 15.94% 13.02%
51.4%
36.9% 39.5%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Cumulative Total Return
Top 20 Portfolio
S&P 500 (SPY)
U.S. Dividend ETF (SCHD)
$1,622
$3,282
$3,700
$401
$1,452
$3,202 $3,551
$0 $-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2015 2016 2017 YTD 2018
Dividends Receivable Top 20 Portfolio U.S. Dividend ETF (SCHD)
Portfolio’s Trailing 12-month Dividend Growth Rate: 11.8%
Simply Safe Dividends March 2018 - 19 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Top 20 Dividend Stocks – Payment Schedule
*Average EPS and FCF payout ratios exclude outliers caused by one-time events in order to reflect a more representative figure.
How to Use the Table
The “Payment Schedule” table displays the dividend information you need to know about each holding.
Dividend Yield: the company’s indicated annual dividend divided by its stock price.
EPS Payout Ratio: the percentage of GAAP earnings paid out as a dividend over the last 12 months.
FCF Payout Ratio: the percentage of free cash flow paid out as a dividend over the last 12 months.
Dividend Amount: the dollar per share amount of dividends paid out at each pay period.
Payment Cycle: the months the dividend is paid out. Useful for creating monthly income streams.
Next Ex-Div Date: to receive the next dividend payment, you need to own shares before this date.
Next Pay Date: the date at which the dividend amount is actually distributed to shareholders.
Data as of 3/4/18
Simply Safe Dividends March 2018 - 20 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Conservative Retirees Portfolio Update
financial health and strongest
Dividend Safety Scores to minimize
risk until we know more.
Our best performers during February
were Cisco (+8%), Intel (+3%), and
Emerson Electric (-1%).
Cisco reported solid earnings on
February 14. No news was out on
Intel, and Emerson delivered strong
earnings on February 6.
Our worst performers in February
were General Mills (-14%), Exxon (-
12%), and Verizon (-12%).
General Mills sold off with other
consumer staples and dropped further
after announcing an $8 billion deal (a
whopping 22x EBITDA multiple) to
acquire Blue Buffalo, a fast-growing
pet food company making natural
foods and treats for dogs and cats. GIS
is under new leadership focused on
restoring the company to sustainable
growth. I don’t like big acquisitions,
especially for companies in the middle
of a turnaround, but I’m willing to
give the company time to execute.
Management expects to maintain the
dividend (but expect little growth).
ExxonMobil was hurt by oil prices
which slumped nearly 5% in the U.S.
after having rallied for five straight
months. Exxon’s cash flow more than
covered its net investments and
dividends in 2017, and I plan to
cotinine holding the stock.
No news was out on Verizon, who last
reported decent earnings in January.
The company is no longer under
review for sale in our portfolios and
remains a long-term hold. You can
read our full thesis here.
Portfolio Statistics Dividend Yield: 3.7% Fwd P/E Ratio: 15.4 Beta: 0.71 Dividend Safety: 77 Dividend Growth: 34 1-yr Sales Growth: 1.5% 1-yr EPS Growth: 5.0%
Performance Update 2/28/18 Feb. All
Portfolio -4.7% 33.0% S&P 500 -3.6% 36.5% SPHD -6.8% 34.7%
Dividend Increases: 73 Dividend Decreases: 0
Portfolio Objective Keep pace with the S&P 500 over any five-year rolling time period while providing a safe dividend yield of at least 3.5% and less downside risk in a bear market.
Return Drivers Total return is expected to be composed of:
3.5% - 4.5% dividend yield 4% - 6% earnings growth
Investment Philosophy We invest in established, high quality companies with shareholder-oriented management teams. Each business has exhibited a strong commitment to its dividend and operates in stable, mature markets.
Portfolio Turnover When we initiate a new position, we expect to hold it for at least 3-5 years. We only sell if fundamentals structurally change or the valuation reaches excessive levels.
Performance Update
High-yield bond-like stocks fell
further in February. While the S&P
500 lost 3.6%, MLPs, REITs,
consumer staples, telecoms, and
utilities lost 9.7%, 7.7%, 7.6%,
5.7%, and 3.9%, respectively. Our
portfolio did somewhat better,
falling 4.7% (beating SPHD’s loss
of 6.8%).
Interest rates continued rising
during the month, and the Fed
signaled four short-term rate hikes
are possible this year. As a result,
some capital is rotating out of high
dividend stocks in favor of bonds.
From a fundamental perspective,
higher rates increase the cost of debt
for capital-intensive businesses such
as REITs and telecoms. The new tax
law also limits how much interest a
business can deduct (up to 30% of
EBITDA). The law has also created
some uncertainty for regulated
MLPs and utilities.
Specifically, these regulated firms
must pass on their lower taxes to
their customers, resulting in less
revenue and cash flow coming in.
The Wall Street Journal wrote a
good article about the impact on
pipelines here. The dust is far from
settling on what will ultimately
happen, but it’s possible some of
these firms will need to raise more
capital to maintain credit ratings and
fund projects. Stay diversified and
focus on operators with the greatest
Simply Safe Dividends March 2018 - 21 -
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Dividend Events
Our portfolio recorded three new dividend increases during the last month, bringing the total payout
raises since inception in June 2015 to 73. We have not experienced any dividend cuts.
Cisco hiked its dividend by14% and has increased its payout every year since it initiated a dividend in
2011, recording 31% annual growth over the last five years.
PPL raised its dividend by 4%, recording its 16th
increase in 17 years. The utility’s yield has shot up in
recent months as investors worry about PPL’s exposure in the UK (over half of its earnings) given some
of the political turmoil, especially in light of the new trade war talks. For now, the dividend continues to
look safe.
Waste Management continued chugging along and boosted its dividend by 9%. The company has raised
its payout each year since 2004.
Stocks to Consider Buying
Five current holdings look interesting to me today: Crown Castle International (CCI), Kimberly-Clark
(KMB), National Retail Properties (NNN), Dominion Energy (D), and Exxon Mobil (XOM).
In addition, after selling our shares of Omega Healthcare (OHI) and Thomson Reuters (TRI), I plan to
initiate positions in Duke Energy (DUK), WEC Energy (WEC), W.P. Carey (WPC), Public Storage
(PSA), and United Parcel Services (UPS). Each of these new positions will represent about 2% of our
portfolio’s overall value.
Crown Castle International (CCI): Founded in 1994, Crown Castle owns, operates, and leases more
than 40,000 cell towers and over 60,000 route miles of fiber supporting small cells and fiber solutions
across every major U.S. market. This nationwide portfolio of communications infrastructure is leased out
to wireless carriers, which need Crown Castle’s infrastructure to provide wireless services to consumers
and businesses. Tenants deploy communications equipment, coaxial cables, and antennas at the top of
Crown Castle’s towers that transmit signals between the tower and mobile devices. Most towers have the
capacity for at least four tenants. The big four wireless carriers account for 90% of Crown Castle’s site
rental revenue, and the company is completely focused on the U.S. wireless market, where over 70% of
its towers are located in the top 100 largest markets. Over 80% of the company’s revenue is recurring,
and most of its site rental revenue results from long-term leases with initial five to 15-year terms and five
to 10-year renewal periods thereafter.
Competitive Advantages
Despite its customer concentration, Crown Castle’s business model is attractive for a number of reasons,
beginning with its predictability. The company has an average remaining customer contract term of six
years and approximately $18 billion remaining in contracted lease payments (compared to $3.7 billion in
2017 site rental revenue), providing excellent cash flow visibility. Crown Castle’s leases also have built-
in price escalators, which are expected to continue adding around 3% to the company’s annual earnings
growth. In addition to annual rent escalators, tower economics are also attractive because very little cost
is involved to add additional tenants. An investor presentation by Crown Castle last year highlighted that
the company enjoys a 96% incremental margin when it adds an additional tenant to one of its existing
towers, for example. As data growth continues accelerating, it seems reasonable that demand for Crown
Castle’s wireless infrastructure will also rise over time as carriers invest in their networks to handle
increasing traffic. My investment thesis on Crown Castle can be seen by clicking here.
Simply Safe Dividends March 2018 - 22 -
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Dividend Review
Dividend Safety Score: 61 Dividend Growth Score: 38 Dividend Yield: 4.02%
Crown Castle only began paying dividends in 2014 but has since increased its payout by a compound
annual growth rate of approximately 9%. Management expects to grow its dividend by 7-8% annually
going forward. Based on management’s 2018 guidance, Crown Castle’s AFFO payout ratio will be
approximately 76% next year. This is a very reasonable level for a REIT, especially one that benefits
from a substantial amount of recurring revenue and that maintains an investment grade credit rating.
Recent News
No update from last month. Crown Castle reported earnings on January 24. Organic adjusted funds from
operations (AFFO) increased 7%, and site rental revenues recorded 6% growth. The company closed its
$7.1 billion acquisition of Lightower in November 2017. This deal essentially combines Crown Castle’s
leading small cell platform with one of the best metro fiber footprints in the industry, which meaningfully
expands the company’s capabilities to deliver small cells nationally at scale for its wireless carrier
customers. Acquiring Lightower better positions Crown Castle for growth in small cells and is expected
to be immediately accretive to AFFO per share. Lightower is expected to increase Crown Castle’s long-
term dividend growth rate target from 6-7% to 7-8%.
Valuation
CCI’s forward P/AFFO ratio was 18.9 and its dividend yield was 4.02% as of 3/4/18.
Kimberly-Clark (KMB): Kimberly-Clark has been in business since 1928 and has grown into one of the
largest global manufacturers of various tissue and hygiene products. Some of the company’s key products
are disposable diapers, training pants, baby wipes, incontinence care products, tissues, toilet paper, paper
towels, napkins, and more. Kimberly-Clark’s major brands include Huggies, Pull-Ups, Kleenex,
Cottonelle, Kotex, Scott, and Depend. Products are primarily sold to supermarkets, mass merchandisers
(Wal-Mart is a 10%+ customer), drugstores, and other retail outlets.
By segment, Personal Care (diapers, training pants, wipes, feminine and incontinence care) accounts for
approximately half of the company's sales and operating profits. Consumer Tissue (facial tissue,
bathroom tissue, paper towels) contributes another third of Kimberly-Clark's mix, and K-C Professional
(facial tissue, bathroom tissue, paper towels for away-from-home use, safety products) generates the
remainder. North America accounts for 65% of profits, followed by Asia / Latin America (28%).
Competitive Advantages
Kimberly-Clark gains advantages from its size, strong brands, and product innovation. As one of the
largest players in most of its markets, the company’s manufacturing scale allows it to produce products at
a lower cost than most of its rivals. These extra profits can be invested in advertising, which Kimberly-
Clark spends more than $600 million on each year to defend its shelf space and keep its products popular
with consumers. Breaking the company’s distribution channels would be very difficult for new entrants,
and Kimberly-Clark has the financial resources necessary to invest in R&D or marketing if a new product
trend emerges. Finally, the company’s strong exposure to emerging and developing markets is worth
highlighting. Demand for many of Kimberly-Clark’s products tracks population growth, so the company
is reasonably well positioned to combat potentially stagnant growth in developed markets. Our full
investment thesis on Kimberly-Clark can be seen by clicking here.
Simply Safe Dividends March 2018 - 23 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Dividend Review
Dividend Safety Score: 88 Dividend Growth Score: 54 Dividend Yield: 3.55%
Kimberly-Clark appears to pay one of the safest dividends in the market, supported by the company’s
healthy free cash flow payout ratio near 65%, excellent cash flow generation, recession-resistant business
(sales dipped just 2% in fiscal year 2009), stable profitability, and investment-grade rated debt.
Kimberly-Clark is a dividend aristocrat that has raised its dividend for 46 consecutive years. The
company’s dividend increased 6.5% per year over the last 20 years and by 4.3% annually during the last
three years. Until earnings growth picks up, the company will likely continue raising its dividend by 3-
6% per year.
Recent News
No update from last month. Kimberly-Clark reported results on January 23. Market conditions remain
challenging over the short-term, but management expects organic sales to return to growth this year, with
margins expanding and adjusted earnings per share to record double-digit growth. The company
increased its dividend 3.1% and announced a major new restructuring program expected to generate $1.5
billion in cost savings through 2021. While Kimberly-Clark has experienced its fair share of headwinds, I
continue to believe the company’s emerging markets reach positions it well for the long-term.
Valuation
KMB’s forward P/E ratio was 16.1 and its dividend yield was 3.55% as of 3/4/18. The stock’s yield
remains above its five-year average:
National Retail Properties (NNN): National Retail was formed in 1984 and is a real estate investment
trust (REIT) with more than 2,700 properties in over 48 states. The company’s retail properties are leased
to more than 400 tenants across 37 industry classifications, such as convenience stores and restaurants,
providing nice diversification. Furthermore, National Retail only originates single-tenant triple-net leases,
which shift property operating expenses such as maintenance, taxes, and utilities to the tenant. In other
Simply Safe Dividends March 2018 - 24 -
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words, the rental revenue received by National Retail has substantially fewer expenses and more stable
net cash flow than other REITs with a smaller mix of triple-net leases.
Competitive Advantages
National Retail’s main advantages come from its conservative management team, high quality property
locations, and diversification. By spreading its properties across nearly 40 different industries and
hundreds of tenants, National Retail diversifies away a significant amount of fundamental risk. Its largest
tenant is less than 6% of annual rent, and convenience stores are its largest exposure at about 18% of
annual rent, followed by full-service restaurants (12%). National Retail’s well-placed retail locations
allow it to enjoy an occupancy rate in excess of 99%, and its occupancy rate has never dipped below
96.4% since 2003 (much better than the broader REIT industry). The company intentionally owns single-
tenant properties, which prevent tenants from pooling their bargaining power together to try and reduce
their rent. Consumer-focused retailers also face more switching costs than an office or industrial
customer because they are more location-driven; they don’t want to risk disrupting their established
customer base to save a bit on rent, resulting in stronger renewal rates. Finally, National Retail maintains
one of the lowest leverage ratios relative to other REITs, providing it with flexibility to continue growing
even if rates rise. Our full investment thesis on National Retail Properties can be seen by clicking here.
Dividend Review
Dividend Safety Score: 94 Dividend Growth Score: 18 Dividend Yield: 5.04%
National Retail Properties has increased its dividend for 28 consecutive years, recording 3.1% annual
growth over the last five years. Based on 2018 guidance, the REIT’s AFFO payout ratio is expected to be
a reasonable 71% this year. The company will likely continue raising its dividend by 2-4% per year, and
its dividend should remain safe thanks to its BBB+ investment grade credit rating from S&P, quality
property locations, and impressive track record. NNN last raised its dividend by 4.4% in July 2017.
Recent News
National Retail Properties reported earnings on February 13. Adjusted funds from operations (AFFO) per
share grew 2%, and portfolio occupancy remained very strong at 99.1%. The company continued finding
growth opportunities, investing $257 million in property investments at an initial cash yield of 6.9%.
Here is what National Retail’s CEO Jay Whitehurst said about the quarter:
Valuation
NNN’s forward P/AFFO ratio was 14.1 and its dividend yield was 5.04% as of 3/4/18.
Simply Safe Dividends March 2018 - 25 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Dominion Energy (D): Dominion was founded in 1909 and is one of the largest producers and
transporters of energy in the country. The diversified utility company has a portfolio of more than 26,000
megawatts of electric generation, 66,000 miles of natural gas transmission, gathering, storage, and
distribution pipeline, and 64,000 miles of electric transmission and distribution lines. It operates one of
the biggest natural gas storage systems in the U.S. and serves more than 6 million customers.
Competitive Advantages
Dominion Energy has significantly shifted its portfolio in recent years to reduce its exposure to
commodity prices and focus more on businesses with faster growth, stronger competitive advantages,
better profitability, and lower risk. Today, over 90% of the company’s sales are from regulated
operations, which provide solid cash flow visibility. The company’s electric and gas regulated utility
businesses operate in regions with healthy population growth and constructive regulators who have
historically provided Dominion with favorable rates of returns on its investment. Management is
investing heavily in natural gas, including massive projects such as the Cove Point LNG export terminal
and the Atlantic Coast Pipeline. These projects are expected to generate substantial cash flow (backed by
long-term contracts with customers) as they come online over the next few years, helping Dominion
Energy generate mid to high-single-digit annual earnings growth. Dominion also acts as the general
partner and sponsor of its midstream MLP, Dominion Midstream Partners (DM), which provides low-
cost funding for the company’s expansion plans. Our full investment thesis on Dominion Energy can be
seen by clicking here.
Dividend Review
Dividend Safety Score: 75 Dividend Growth Score: 37 Dividend Yield: 4.61%
Dominion Energy’s dividend payment appears to be quite safe with decent growth prospects. The
company has paid consecutive dividends for close to 90 years and increased its payout for 14 straight
years. Management targets a regulated payout ratio at up to 75%, which is conservative for a utility, and
Dominion has several billion dollars of liquidity available (compared to total dividend payments of $1.7
billion last year). Management expects the company to achieve at least 10% annual dividend growth
through 2020 as its large projects begin generating significant cash flow.
Simply Safe Dividends March 2018 - 26 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Recent News
No update from last month. As fate would have it, a lot has changed since we initiated a position in the
company in late 2017. Most notably, Dominion made a $14.6 billion dollar bid to acquire SCANA
(SCG). The utilities sector has also dropped on rate-related headwinds. Please review the introductory
comments made in our thesis here for more information. While I generally do not like large acquisitions
and prefer to give the acquiring company more time to digest a deal, Dominion’s selloff and high yield
make the stock look interesting to me today.
Valuation
D’s forward P/E ratio was 17.9 and its dividend yield was 4.61% as of 3/4/18. The stock’s dividend yield
remains at a multi-year high:
Exxon Mobil (XOM): Exxon Mobil was founded in 1870 and is one of the world’s oldest oil companies.
It’s also the world’s largest publicly traded integrated oil conglomerate, with nearly 30,000 oil & gas
wells on six continents. The company operates in three distinct business segments: upstream oil & gas
production, downstream refining, and specialty chemicals.
Competitive Advantages
Exxon Mobil’s greatest strengths are its scale, diversification, and conservative management team. If
Exxon were its own nation, its total liquids production would have made it one of the world’s 10 largest
oil producers. Such scale helps Exxon achieve lower costs, which is essential in a commodity market.
The company’s integrated business model also provides some cash flow diversification, helping it ride
out energy cycles with somewhat less volatility than most of its rivals. Exxon’s management team has a
long track record of excellent capital allocation, which has helped the company enjoy higher returns on
capital than all of its major peers. Our investment thesis on Exxon Mobil can be seen by clicking here.
Dividend Review
Dividend Safety Score: 71 Dividend Growth Score: 26 Dividend Yield: 4.08%
Simply Safe Dividends March 2018 - 27 -
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Exxon has paid an uninterrupted quarterly dividend since 1882 and has increased its payout for more than
30 consecutive years. While Exxon’s dividend grew nearly 9% annually over the past decade, payout
growth has slowed in recent years thanks to the crash in oil prices. The company is still able to
implement low-single digit dividend increases for now, and Exxon’s cash flow more than covered its net
investments and dividends in 2017. If energy prices remain depressed, Exxon will arguably be the last
company still standing and paying dividends.
Recent News
Exxon reported earnings on February 2. Adjusted earnings declined 2%, but management noted that its
full year cash flow from operations and asset sales exceeded dividends and net investments.
Valuation
XOM’s forward P/E ratio was 16.6 and its dividend yield was 4.08% as of 3/4/18. While it’s hard to
make a compelling valuation case form any energy stocks if oil prices remain below $50 or $60 a barrel,
Exxon is one of the very few energy stocks I am comfortable owning in a diversified income portfolio,
and its historically high yield makes it a more compelling investment opportunity to consider today.
Duke Energy (DUK): Duke Energy’s history dates back to the early 1900s, and the company is largest
electric utility in the country today, serving approximately 7.5 million electric customers and 1.6 million
gas customers across the Southeast and Midwest regions of the U.S. Regulated electric utilities account
for 89% of Duke Energy’s earnings, but the company also has a fast-growing gas infrastructure and
utilities business (8%) and a commercial portfolio of renewables (3%).
Competitive Advantages
As a regulated utility, Duke Energy enjoys very predictable earnings. The company has earned a stable
and healthy return on equity between 9% and 11% in each of its regions over the last few years, for
example. These returns seem likely to remain stable over the coming years, in part because the rates
charged to Duke Energy’s customers largely remain well below the nationwide average. Going forward,
Duke Energy has more than $35 billion of projects planned through 2021 which are expected to drive 4%
Simply Safe Dividends March 2018 - 28 -
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to 6% annual earnings growth (and a similar rate of dividend growth). Our full investment thesis on Duke
Energy can be seen by clicking here.
Dividend Review
Dividend Safety Score: 80 Dividend Growth Score: 37 Dividend Yield: 4.72%
Duke Energy has paid uninterrupted dividends for more than 90 years. The company expects to deliver
4% to 6% annual dividend growth going forward with a reasonable payout ratio between 70% and 75%.
Recent News
Duke Energy reported earnings on February 20. Most importantly, management reaffirmed the
company’s 4% to 6% expected growth rate through 2021 and extending the growth rate through 2022.
Tax reform will cause 2018 earnings growth to fall below that range, but it should not jeopardize the
firm’s long-term outlook or dividend growth.
Valuation
DUK’s forward P/E ratio was 16.0 and its dividend yield was 4.72% as of 3/4/18.
WEC Energy (WEC): WEC is one of the nation’s largest electric and natural gas utilities. Today WEC
provides service to 2.9 million natural gas customers and 1.6 million electric customers located
throughout Wisconsin, Minnesota, Michigan, and parts of Illinois. The company also owns 60% of
American Transmission Company, an electric transmission company, and has a nonregulated renewable
energy business. However, over 99% of its earnings are from regulated activities, and the company’s
home market of Wisconsin still accounts for around 70% of WEC’s business.
Competitive Advantages
Regulated utilities are usually some of the most dependable businesses in the country. WEC is
particularly impressive from a reliability perspective because it is the only regulated utility to beat
guidance every year for more than a decade. The company’s track record largely reflects management’s
discipline and conservatism with how they run the business. WEC’s utilities all maintain “A” credit
Simply Safe Dividends March 2018 - 29 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
ratings, and the company maintains constructive relationships with regulators in regions with favorable
demographics. Our full investment thesis on WEC can be seen by clicking here.
Dividend Review
Dividend Safety Score: 85 Dividend Growth Score: 37 Dividend Yield: 3.72%
WEC has raised its dividend for 15 consecutive years and remains in great shape to continue that trend.
The company’s increasing diversification by state jurisdiction and fuel type, solid investment grade credit
rating, conservative target payout ratio of 65-70%, and lack of need to raise equity capital are all
strengths that should serve the business and its shareholders well. WEC’s capital spending plan is
expected to deliver 5% to 7% annual earnings per share growth over the next five years, and the
company’s dividend should rise at similar pace.
Recent News
WEC reported earnings on January 31. Adjusted earnings per share grew 6%. Management introduced
2018 earnings guidance in line with the company’s long-term goal of growing earnings at a rate of 5% to
7% per year.
Valuation
WEC’s forward P/E ratio was 18.0 and its dividend yield was 3.72% as of 3/4/18.
W.P. Carey (WPC): W.P. Carey is a triple net lease REIT that owns 890 properties located in 19
countries around the world. W.P. Carey’s portfolio is broadly diversified across tenants (over 200, none
greater than 6% of rent), industries (29), property types (industrial, office, retail, storage), and
geographies (35% of sales are outside of the U.S., primarily in Western and Northern Europe).
Competitive Advantages
W.P Carey is far more diversified by property type and industry than most of its peers. Management
takes a disciplined approach to growth, which has earned the company an investment grade credit rating
and helped W.P. Carey achieve an occupancy rate of at least 96% each year for more than a decade. With
close to 70% of its rent comes from leases linked to CPI, W.P. Carey also has a built-in hedge against
Simply Safe Dividends March 2018 - 30 -
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inflation, a differentiating factor among net lease REITs. Our full investment thesis on W.P. Carey can be
seen by clicking here.
Dividend Review
Dividend Safety Score: 61 Dividend Growth Score: 14 Dividend Yield: 6.72%
W.P. Carey has increased its dividend every year since going public in 1998. With a highly stable and
conservative payout ratio below the industry average, a relatively low cost of capital, a diversified
property portfolio, and a strong balance sheet (the company has an investment grade credit rating), W.P.
Carey seems like a safe bet for dependable income and moderate growth in the years ahead.
Recent News
W.P. Carey reported earnings on February 23. Adjusted funds from operations (AFFO) per share grew
7%, and same-store rent grew 1.7% in 2017.
Valuation
WPC’s forward P/AFFO ratio was 11.1 and its dividend yield was 6.72% as of 3/4/18.
Public Storage (PSA): Public Storage was founded in 1972 and is America’s largest self-storage REIT,
owning over 2,500 storage rental properties in 38 states and seven European countries. The company also
owns a 42% stake in PS Business Parks (PSB), which leases out commercial space to small and mid-size
businesses. U.S. self-storage operations account for approximately 86% of company-wide net operating
income, followed by commercial properties (6%), ancillary businesses (6% – reinsurance policies, locks
and cardboard boxes), and European self-storage (3%).
Competitive Advantages
Public Storage operates in a very competitive industry that has low barriers to entry and is hard to
differentiate in. The company’s main advantages are its sheer size (leverage costs to achieve better
profitability), focus on major metropolitan areas (better demographics), and well-recognized brand. As
long as people continue experiencing major life events such as an unexpected move or divorce, there will
be demand for self-storage warehouses. In fact, the self-storage industry’s free cash flow per share fell by
Simply Safe Dividends March 2018 - 31 -
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less than 5% during the financial crisis, according to a 2013 report by Bank of America Merrill Lynch.
Our full investment thesis on Public Storage can be seen by clicking here.
Dividend Review
Dividend Safety Score: 91 Dividend Growth Score: 59 Dividend Yield: 4.10%
Public Storage has paid uninterrupted dividends since 1981 while increase its payout each year since
2010. The business generates excellent cash flow, enjoys an “A” credit rating, and maintains a reasonable
AFFO payout ratio near 80%. Even if industry supply remains a headwind the next few years, the
company’s payout should remain on solid ground.
Recent News
Public Storage reported earnings on February 20. Same-store revenue grew 2.1%, and core funds from
operations per share increased 3.8%. The company’s growth rate has significantly decelerated in recent
years as new supply has entered many of its markets. This uncertainty has weighed on the stock, causing
its yield to reach a multiyear high. The public storage industry is still expected to continue growing over
the long term, thanks largely to America’s aging demographics. Between 2012 and 2060, America’s
population of those over age 65 is expected to grow by nearly 50 million, according to U.S. Census
Bureau projections. However, no one can predict the industry’s balance in the meantime.
Valuation
PSA’s forward P/AFFO ratio was 19.7 and its dividend yield was 4.10% as of 3/4/18.
United Parcel Services (UPS): Founded in 1907, UPS is the world’s largest package delivery company.
Thanks to a global fleet of 112,000 vehicles and 581 aircraft, UPS delivers 20 million packages and
documents each day to around 10 million customers located in more than 220 countries. While the
domestic business continues to generate the majority of profits, the company continues to expand
overseas and diversify into supply chain and freight.
Simply Safe Dividends March 2018 - 32 -
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Competitive Advantages
Few companies can afford to invest in all of the hard assets required to efficiently run a global delivery
service business. UPS benefits from running denser delivery routes due to the sheer volume of packages
it handles, which reduces its per package costs. Furthermore, new or smaller rivals lack the brand
recognition enjoyed by UPS, which is important because customers expect their packages to be reliably
delivered in a time-sensitive manner. These are all reasons why the industry is heavily concentrated with
a small handful of operators dominating the space. Our full investment thesis on UPS can be seen by
clicking here.
Dividend Review
Dividend Safety Score: 71 Dividend Growth Score: 54 Dividend Yield: 3.45%
UPS has a long history of rewarding shareowners with generous cash dividends. The company has paid a
cash dividend every year since 1969 and has more than quadrupled its dividend since it went public at the
end of 1999. With a payout ratio near 50%, consistent cash flow generation, and a strong investment
grade credit rating, the company’s dividend remains on solid ground. Management boosted the payout by
9.6% in February 2018.
Recent News
UPS reported earnings on February 1. Sales grew 11%, and management expects 5% to 6% revenue
growth in 2018 with some margin pressure due to new facility startup costs (to support higher package
volumes) and some accounting changes. Investors remain nervous about Amazon’s interest in providing
its own delivery service. The company’s outlook for higher capital expenditures to support growth has
also weighed on the stock. I expect continued e-commerce growth around the world to continue
supporting UPS’s long-term earnings outlook and ability to achieve profitable growth. Delivery remains
a very large global market with high barriers to entry and room for multiple players.
Valuation
UPS’s forward P/E ratio was 14.5 and its dividend yield was 3.45% as of 3/4/18.
Simply Safe Dividends March 2018 - 33 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Stocks to Consider Selling
I plan to sell out of our positions in Omega Healthcare (OHI) and Thomson Reuters (TRI) when the
market opens on Monday, March 5. Omega’s outlook continues weakening as the healthcare landscape
evolves. Although OHI’s dividend is expected to remain safe this year, it is expected to be frozen at its
current level. With many higher quality dividend stocks selling off in recent months, more attractive
businesses with lower risk profiles and safer payouts are available. You can read my note on OHI here.
Thomson Reuters’ payout remains safe as well, but I don’t expect any growth going forward. Earlier this
year the company announced an agreement to sell a 55% stake in its Financial & Risk segment, which
provides financial terminals and accounted for around half of its profits. The deal is fairly complicated,
but Thomson’s ongoing earnings power will drop, its effective leverage will be higher, and most of the
cash received is going to share repurchases and acquisitions. With the stock only offering a 3.5% yield
with no dividend growth and strategic uncertainty, I would rather move on to other ideas.
In light of its ongoing challenges discussed last month, Wells Fargo (WFC) remains under review for
potential sale in the coming weeks and months. I think we can find a higher quality company in the
financials sector that is better positioned for rising interest rates and long-term growth without so much
hair.
Simply Safe Dividends March 2018 - 34 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Conservative Retirees Portfolio – Portfolio Actions
.
Data as of 3/4/18
How to Use the Table: Stocks in the “Possible Buying Opportunities” list appear to have relatively attractive valuations and/or more timely fundamental momentum. As such, they
could prove to be the best available investment opportunities to put new cash to work in. Stocks in the “Long-term Holds” list are still expected to be solid long-term holdings, but
they do not appear to have as attractive valuations or fundamental momentum at the moment, suggesting there might be a better opportunity in the future to add more.
Investors looking for stocks with very safe current income and low volatility should look for stocks with dividend “Safety Scores” of at least 50 and “Low” or “Very Low” price
volatility. Investors interested in longer-term income growth should look for stocks with dividend “Growth Scores” of at least 70. Note that scores of 50 are average, 75 or higher is excellent, and 25 or lower is considered weaker.
= stock is under review for potential sale in the coming weeks and months = stock is to be sold on March 5
Simply Safe Dividends March 2018 - 35 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Conservative Retirees Portfolio – Performance and Dividend Income
Monthly Return Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio -0.34% 1.73% 0.92% 0.97% 1.99% 2.61% 0.95% 0.73% -4.66%
S&P 500 0.64% 2.06% 0.29% 2.01% 2.36% 3.06% 1.21% 5.64% -3.64%
SPHD ETF 0.34% 0.66% -0.42% 2.44% 0.73% 3.69% -0.13% 0.25% -6.77%
Portfolio Value $126,467.07 $128,651.02 $129,840.55 $131,103.28 $133,717.14 $137,203.13 $138,508.89 $139,517.23 $133,012.85
Since Inception
Cumulative Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 26.47% 28.65% 29.84% 31.10% 33.72% 37.20% 38.51% 39.52% 33.01%
S&P 500 20.31% 22.78% 23.14% 25.62% 28.58% 32.51% 34.11% 41.67% 36.52%
SPHD ETF 34.55% 35.44% 34.87% 38.16% 39.17% 44.31% 44.12% 44.49% 34.71%
Annualized Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 12.21% 12.60% 12.55% 12.57% 13.01% 13.74% 13.70% 13.51% 11.13%
S&P 500 9.49% 10.15% 9.88% 10.48% 11.16% 12.14% 12.26% 14.18% 12.20%
SPHD ETF 15.67% 15.36% 14.51% 15.18% 14.93% 16.10% 15.50% 15.04% 11.65%
33.0%
36.5%
34.7%
-20%
-10%
0%
10%
20%
30%
40%
50%
Cumulative Total Return
Conservative Retirees Portfolio
S&P 500 (SPY)
High Dividend ETF (SPHD)
$1,936
$3,960 $4,283
$822
$1,856
$4,711 $4,307
$937
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2015 2016 2017 YTD 2018
Dividends Receivable Conservative Retirees Portfolio High Dividend ETF (SPHD)
Portfolio’s Trailing 12-month Dividend Growth Rate: 6.5%
Simply Safe Dividends March 2018 - 36 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Conservative Retirees Portfolio – Payment Schedule
*Average EPS and FCF payout ratios exclude outliers caused by one-time events in order to reflect a more representative figure.
How to Use the Table
The “Payment Schedule” table displays the dividend information you need to know about each holding.
Dividend Yield: the company’s indicated annual dividend divided by its stock price.
EPS Payout Ratio: the percentage of GAAP earnings paid out as a dividend over the last 12 months.
FCF Payout Ratio: the percentage of free cash flow paid out as a dividend over the last 12 months.
Dividend Amount: the dollar per share amount of dividends paid out at each pay period.
Payment Cycle: the months the dividend is paid out. Useful for creating monthly income streams.
Next Ex-Div Date: to receive the next dividend payment, you need to own shares before this date.
Next Pay Date: the date at which the dividend amount is actually distributed to shareholders.
Data as of 3/4/18
Simply Safe Dividends March 2018 - 37 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Long-term Dividend Growth Portfolio Update
TJX Companies reported strong
earnings results on February 28.
Same-store sales grew 4% (over last
year’s 3% increase), an impressive
figure given the dynamic brick-and-
mortar retail environment.
Overall revenue grew 16%, and
adjusted earnings per share rose 16%
as well. Management’s confidence in
the business resulted in a 25%
increase to TJX’s dividend, marking
its 22nd
consecutive year of growth.
Our worst performing stocks were
Lowe’s (-15%), Parker-Hannifin (-
11%), and Chubb (-9%).
Lowe’s reported earnings at the end of
February that disappointed investors.
Same-store sales grew 4% in the
quarter, and adjusted earnings rose
10% for the year.
While those are good results on a
standalone basis, Lowe’s numbers
weren’t quite as strong as Home
Depot’s, and expectations were high
coming into the report (Lowe’s had
been one of our best performers).
I continue to like Lowe’s for the long
term and remain happy to hold the
business.
No new news was out on Parker-
Hannifin, but parts of its business are
sensitive to oil prices, which fell close
to 4% in February. PH next reports
earnings on March 7.
Chubb didn’t have any new events
either. The company last reported
earnings on January 30. Core
operating income grew 17%, and the
firm’s P&C combined ratio remained
conservative at 90.7%.
Portfolio Statistics Dividend Yield: 1.6% Fwd P/E Ratio: 20.1 Beta: 0.95 Dividend Safety: 86 Dividend Growth: 84 1-yr Sales Growth: 8.4% 1-yr EPS Growth: 20.5%
Performance Update 2/28/18 Feb. All
Portfolio -4.4% 54.4% S&P 500 -3.6% 37.9% VIG ETF -4.0% 36.7%
Dividend Increases: 67 Dividend Decreases: 0
Portfolio Objective Outperform the S&P 500 by at least 1% per year over any five-year rolling time horizon and generate annual dividend growth of at least 12% per year.
Return Drivers Total return is expected to be composed of:
1.5% - 2.5% dividend yield 8% - 10% earnings growth
Investment Philosophy We invest in companies with enduring competitive advantages, big markets, and relatively low payout ratios. We believe these stocks are best positioned for long-term earnings and dividend growth.
Portfolio Turnover When we initiate a new position, we expect to hold it for at least 3-5 years. We only sell if fundamentals structurally change or the valuation reaches excessive levels.
Performance Update
Our Long-term Dividend Growth
portfolio lost 4.4% in February,
slightly trailing the S&P 500 (-
3.6%) and performing in line with
Vanguard’s Dividend Appreciation
ETF (VIG, -4.0%).
Since inception in June 2015, our
portfolio has returned 54.4%,
outperforming the S&P 500’s
37.9% return and VIG’s 36.7%
gain.
The portfolio’s 17.3% annualized
return since inception won’t
continue, but our outlook for
dividend growth remains strong. In
fact, our dividend income has grown
16.6% over the trailing 12-month
period.
Our strongest stocks during the
month of February were Exponent
(+5%), Broadridge Financial (+4%),
and TJX Companies (+3%).
Exponent released earnings results
on February 1. Total revenues grew
15%, and adjusted earnings per
share rose 23%. The company
recently raised its dividend by 24%,
and management expects mid-single
digit revenue growth in 2018.
Broadridge reported earnings on
February 8. Revenue rose 13%,
adjusted earnings per share doubled,
and management raised guidance
for fiscal 2018. Broadridge is also
benefiting from U.S. tax reform.
Simply Safe Dividends March 2018 - 38 -
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Dividend Events
Three holdings announced new dividend increases during the last month. Our portfolio has enjoyed a
total of 67 payout raises since inception in June 2015. We have not experienced any dividend cuts.
TJX Companies, Texas Roadhouse, and FLIR raised their payouts by 25%, 19%, and 7%, respectively.
Stocks to Consider Buying
Three stocks look like timely opportunities for long-term investors to consider: Hormel (HRL),
Medtronic (MDT), and Lowe’s. Most of our other holdings continue trading at relatively high valuation
multiples.
Hormel (HRL): Hormel has been in operation for 125 years and is a multinational manufacturer and
marketer of consumer-branded food and meat products. Some of the company’s well-known brands
include Skippy peanut butter, SPAM meat, Dinty Moore stew, Muscle Milk protein drinks, Wholly
Guacamole dips, Jennie-O turkey, and numerous Hormel-branded products.
Around half of HRL’s products are perishable (fresh meats, frozen items, refrigerated meals, sausages,
hams, guacamole, and bacon), 19% are poultry (Jennie-O turkey), 18% are shelf-stable (canned luncheon
meats, microwaveable meals, stews, chilies, hash, tortillas, and peanut butter), and 10% are
miscellaneous (nutritional food products and supplements, sugar, dessert mixes, and drink mixes).
Competitive Advantages
As one of the largest consumer-branded food and meat manufacturers, Hormel’s key to success is
favorably altering customers’ perceptions of its products to gain loyalty and market share. The company
routinely spends around $150 million on advertising each year, an amount nearly five times greater than
Hormel’s spending on R&D.
With many of its brands dating back over 50 years (e.g. SPAM and Dinty Moore were introduced in the
1930s) and supported by billions of advertising dollars over the years, consumers know and trust
Hormel’s products. As a result, more than 35 of Hormel’s brands have #1 or #2 market share positions in
their category. As long as consumers need to eat, Hormel’s well-known brands will be there for them.
Beyond brand recognition, retailer relationships, and shelf space market share, Hormel also benefits from
economies of scale. As one of the larger players in the market, Hormel is able to achieve lower
production costs than smaller rivals and squeezes more value out of each advertising dollar it spends by
extending well-known brands into adjacent product categories. Extensive regulations by the U.S.
Department of Agriculture also disadvantage smaller competitors.
You can review my full thesis on Hormel by clicking here. The stock’s P/E multiple has significantly
contracted from my initial review, making the investment opportunity more attractive today.
Dividend Review
Dividend Safety Score: 98 Dividend Growth Score: 71 Dividend Yield: 2.30%
Hormel has one of the safest dividend payments in the market. The company raised its dividend by 10%
in 2017, marking its 52nd
consecutive year of dividend increases. Hormel’s dividend has compounded by
15.3% annually over the last decade.
Simply Safe Dividends March 2018 - 39 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Long-term dividend growth shows no signs of slowing down. Hormel’s payout ratio sits near 40%, its
balance sheet is very healthy, demand for its products is recession-resistant, and free cash flow generation
has been excellent.
Recent News
Hormel reported earnings on February 22. Organic sales grew 1%, earnings per share rose 27%, and cash
flow from operations grew 56%. Management raised fiscal 2018 earnings guidance moderately and
expects a $100 million to $140 million full year cash flow benefit from the new tax law. The company
previously announced its largest acquisition ever on October 31, an $850 million deal to buy Columbus, a
premium deli meat and salami company. The acquisition enhances Hormel’s scale in the deli and should
improve growth opportunities.
Hormel had been struggling along with most other packaged food companies, but for different reasons.
Specifically, the company faced record-high input costs for its two primary raw materials, pork bellies
and beef trim. Hormel’s Jennie-O Turkey Store also saw its profit fall thanks mostly to lower turkey
commodity prices, which are near a seven-year low.
I continue to believe these are temporary headwinds that will eventually reverse course as supply and
demand conditions normalize and management’s strategic acquisitions and new product lines gain
traction.
Valuation
HRL’s forward P/E ratio was 17.9 and its dividend yield was 2.30% as of 3/4/18.
Medtronic (MDT): Medtronic was founded in 1949 and has grown into one of the world’s largest
medical equipment device companies, helping treat over 40 medical conditions and 70 million patients
each year. The company’s diverse portfolio of products is organized into four main business units
(cardiac & vascular, minimally invasive therapy, restorative therapies, diabetes). Products include
Simply Safe Dividends March 2018 - 40 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
everything from pacemakers to blood vessel sealing technology to insulin management pumps. The
business is very global with close to half of total sales coming from outside of the U.S., including a
meaningful portion (about 15%) from emerging markets.
Competitive Advantages
Medtronic’s success over the decades has largely stemmed from its unrelenting focus on continually
innovating new medical products to meet needs of a fast-growing and aging global population. The
company invests heavily in R&D each year, resulting in over 4,600 patents and a constantly growing
development pipeline, which covers everything from surgical robotics systems to vessel sealing
instruments. Given the price-sensitive nature of the healthcare industry, developing successful new
technologies and medical devices is essential to maintaining market share and healthy profitability. A lot
of Medtronic’s medical devices also significantly impact patients’ quality of life and must be of
extremely high quality. The company’s specialized products can offer superior performance in many
instances, allowing it to maintain strong market share and profitability. In addition, thanks to a
disciplined and well executed acquisition strategy, such as its $50 billion acquisition of Covidien,
Medtronic has been able to extend its sales reach into new promising treatment areas, as well as faster-
growing emerging markets. Our full investment thesis on Medtronic is available here.
Dividend Review
Dividend Safety Score: 98 Dividend Growth Score: 73 Dividend Yield: 2.35%
Medtronic is a dividend aristocrat that has paid higher dividends for 40 consecutive years. With a
conservative free cash flow payout ratio near 50%, consistent cash flow generation (recession resistant
business, too), and a very strong investment grade credit rating, Medtronic’s dividend is extremely
secure. The company’s payout has compounded by around 15% annually over the past two decades and
has reasonable potential to continue rising at a double-digit clip going forward.
Recent News
Medtronic reported earnings on February 20. Organic sales grew 7%, and non-GAAP earnings increased
12%. Emerging market sales (15% of company revenue) continue to be a key driver of overall growth
and were up 12%. Management reiterated full-year revenue and EPS guidance. The company seems to be
doing a good job working through a few short-term issues (sensor supply constraint, IT system
disruption, hurricane damage in Puerto Rico), but none of these factors affect Medtronic’s long-term
outlook.
Valuation
MDT’s forward P/E ratio was 15.6 and its dividend yield was 2.35% as of 3/4/18.
Simply Safe Dividends March 2018 - 41 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Lowe’s (LOW): Founded in 1946 in North Wilkesboro, North Carolina, Lowe’s is America’s second
largest home improvement retailer, behind Home Depot (HD). It operates more than 2,100 stores in the
U.S., Canada, and Mexico. The company’s stores are famous for being a one-stop shop for both do-it-
yourself (DIY) customers, as well as professional contractors, generally offering more than 35,000
products, including both well-known national and exclusive brands.
Competitive Advantages
The key to Lowe’s steady growth has been its strong focus on strong customer service, which combined
with its extensive base of conveniently located stores, economies of scale, brand recognition, and massive
distribution channels creates a wide moat in an otherwise highly commoditized retail sector. Smaller
competitors are unable to match the broad assortment of inventory and in-store product presentations that
Lowe’s can afford. They also have much less bargaining power with suppliers, making their products less
price-competitive. Consumers have few reasons not to head to Lowe’s or Home Depot for their home
improvement needs. Lowe’s has also been improving its competitive positioning by investing more in
technology, product presentation, and its online omni-channel sales platform. Through the use of
technology and helpful in-store displays and service, customers have even fewer reasons to try out
competitors’ stores, and the home improvement niche has proven to be fairly Amazon-proof. Our full
investment thesis on Lowe’s is available here.
Dividend Review
Dividend Safety Score: 93 Dividend Growth Score: 94 Dividend Yield: 1.92%
Lowe’s has increased its dividend for 54 consecutive years, recording 17.6% compound annual payout
growth over the last three decades. With a healthy payout ratio near 40%, a solid investment grade credit
rating, and very consistent cash flow generation, Lowe’s dividend is very secure. Given the company’s
plans for margin expansion, its low payout ratio, and moderating store expansion spending in the future,
Lowe’s dividend could continue growing at a double-digit rate for many years to come.
Simply Safe Dividends March 2018 - 42 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Recent News
Lowe’s reported earnings at the end of February that disappointed investors. Same-store sales grew 4% in
the quarter, and adjusted earnings rose 10% for the year. While those are good results on a standalone
basis, Lowe’s numbers weren’t quite as strong as Home Depot’s, and expectations were high coming into
the report (Lowe’s had been one of our best performers). I continue to like Lowe’s for the long term and
remain happy to hold the business.
Valuation
LOW’s forward P/E ratio was 15.5 and its dividend yield was 1.92% as of 3/4/18.
Stocks to Consider Selling None.
Simply Safe Dividends March 2018 - 43 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Long-term Dividend Growth Portfolio – Portfolio Actions
.
Data as of 3/4/18
How to Use the Table: Stocks in the “Possible Buying Opportunities” list appear to have relatively attractive valuations and/or more timely fundamental momentum. As such, they
could prove to be the best available investment opportunities to put new cash to work in. Stocks in the “Long-term Holds” list are still expected to be solid long-term holdings, but
they do not appear to have as attractive valuations or fundamental momentum at the moment, suggesting there might be a better opportunity in the future to add more.
Investors looking for stocks with very safe current income and low volatility should look for stocks with dividend “Safety Scores” of at least 50 and “Low” or “Very Low” price
volatility. Investors interested in longer-term income growth should look for stocks with dividend “Growth Scores” of at least 70. Note that scores of 50 are average, 75 or higher is excellent, and 25 or lower is considered weaker.
Simply Safe Dividends March 2018 - 44 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Long-term Dividend Growth Portfolio – Performance and Dividend Income
Monthly Return Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 2.31% 0.18% -0.29% 4.71% 3.76% 4.44% -0.21% 4.12% -4.36%
S&P 500 0.64% 2.06% 0.29% 2.01% 2.36% 3.06% 1.21% 5.64% -3.64%
VIG ETF 0.28% 0.73% -0.36% 2.38% 2.10% 4.48% 1.44% 5.02% -4.03%
Portfolio Value $137,054.39 $137,305.77 $136,912.22 $143,362.83 $148,756.32 $155,367.92 $155,045.76 $161,439.02 $154,393.32
Since Inception
Cumulative Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 37.05% 37.31% 36.91% 43.36% 48.76% 55.37% 55.05% 61.44% 54.39%
S&P 500 21.54% 24.04% 24.40% 26.91% 29.90% 33.87% 35.49% 43.12% 37.92%
VIG ETF 22.00% 22.90% 22.45% 25.36% 27.99% 33.73% 35.66% 42.47% 36.72%
Annualized Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018
Portfolio 16.53% 15.93% 15.13% 16.88% 18.02% 19.45% 18.69% 19.82% 17.27%
S&P 500 9.93% 10.56% 10.29% 10.87% 11.53% 12.48% 12.60% 14.49% 12.52%
VIG ETF 10.18% 10.13% 9.54% 10.32% 10.88% 12.48% 12.70% 14.34% 12.20%
54.4%
37.9%
36.7%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Cumulative Total Return
LT Dividend Growth Portfolio
S&P 500 (SPY)
Dividend Growth ETF (VIG)
$850
$1,949
$2,249
$278
$1,149
$2,286 $2,433
$0 $-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2015 2016 2017 YTD 2018
Dividends Receivable LT Dividend Growth Portfolio Dividend Growth ETF (VIG)
Portfolio’s Trailing 12-month Dividend Growth Rate: 16.6%
Simply Safe Dividends March 2018 - 45 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Long-term Dividend Growth Portfolio – Payment Schedule
*Average EPS and FCF payout ratios exclude outliers caused by one-time events in order to reflect a more representative figure.
How to Use the Table
The “Payment Schedule” table displays the dividend information you need to know about each holding.
Dividend Yield: the company’s indicated annual dividend divided by its stock price.
EPS Payout Ratio: the percentage of GAAP earnings paid out as a dividend over the last 12 months.
FCF Payout Ratio: the percentage of free cash flow paid out as a dividend over the last 12 months.
Dividend Amount: the dollar per share amount of dividends paid out at each pay period.
Payment Cycle: the months the dividend is paid out. Useful for creating monthly income streams.
Next Ex-Div Date: to receive the next dividend payment, you need to own shares before this date.
Next Pay Date: the date at which the dividend amount is actually distributed to shareholders.
Data as of 3/4/18
Simply Safe Dividends March 2018 - 46 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Idea Generation – Safe Dividend Stocks The dividend stocks on this list are characterized by low price volatility, dividend yields in excess of 3%, and very strong Dividend Safety Scores. These companies are good bets to continue delivering predictable income with less price volatility. We calculate how safe a dividend payment is by analyzing balance sheets, profitability trends, payout ratios, industry cyclicality, earnings growth, and more. Click on the blue-colored ticker symbols to pull up each company in our Stock Analyzer.
Ticker Name P/E
Ratio Dividend
Yield Safety Score
Growth Score
Price Volatility
EPS Payout
5yr Div CAGR
AEP American Electric Power Company 17.1 3.8% 80 9 Very Low 63% 5%
D Dominion Energy 21.4 4.6% 75 37 Very Low 87% 8%
DLR Digital Realty Trust, Inc. 17.0 3.8% 82 52 Very Low 63% 5%
DUK Duke Energy Corporation 25.0 4.7% 80 37 Very Low 71% 3%
ED Consolidated Edison Inc 18.6 3.8% 94 7 Very Low 69% 3%
FRT Federal Realty Investment Trust 16.6 3.4% 74 53 Very Low 56% 7%
GIS General Mills, Inc. 18.3 3.8% 85 45 Low 70% 10%
K Kellogg Company 30.1 3.2% 91 8 Very Low 93% 4%
KMB Kimberly-Clark Corporation 18.5 3.6% 88 54 Low 63% 6%
KO Coca-Cola Company (The) 42.0 3.6% 87 47 Low 140% 8%
MAA Mid-America Apartment Communities 12.9 4.3% 92 58 Very Low 52% 6%
MO Altria Group 7.8 4.2% 85 46 Low 80% 8%
NNN National Retail Properties 14.9 5.0% 94 18 Very Low 73% 4%
O Realty Income Corporation 16.2 5.3% 65 27 Very Low 82% 7%
PG Procter & Gamble Company (The) 14.0 3.5% 99 45 Low 48% 5%
PNW Pinnacle West Capital Corporation 16.6 3.6% 92 22 Very Low 57% 5%
PSA Public Storage 20.7 4.1% 91 59 Very Low 85% 13%
SPG Simon Property Group, Inc. 16.1 5.0% 74 44 Low 74% 12%
T AT&T Inc. 17.5 5.5% 78 11 Very Low 94% 2%
TGT Target Corporation 15.8 3.3% 70 45 Low 51% 16%
VTR Ventas, Inc. 8.7 6.3% 70 34 Very Low 54% 5%
VZ Verizon Communications Inc. 12.4 4.9% 73 16 Low 60% 3%
WEC Wisconsin Energy Corporation 19.5 #N/A 85 37 Very Low 68% 12%
Simply Safe Dividends March 2018 - 47 -
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more.
COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Idea Generation – High Growth Dividend Stocks The dividend stocks on this list are characterized by moderate price volatility, dividend yields in excess of 1.5%, and very strong Dividend Growth Scores. These companies are extremely well positioned to grow their dividends quickly in coming years. We calculate how fast a dividend payment can grow by analyzing payout ratios, sales and earnings growth, and more. Click on the blue-colored ticker symbols to pull up each company in our Stock Analyzer.
Ticker Name P/E
Ratio Dividend
Yield Safety Score
Growth Score
Price Volatility
EPS Payout
3yr Div CAGR
AMT American Tower Corporation (REIT) 20.8 2.1% 76 88 Low 39% 21%
BR Broadridge Financial Solutions, Inc. 36.0 1.4% 83 90 Average 48% 16%
CMCSA Comcast Corporation 17.5 2.1% 91 89 Average 29% 12%
CMI Cummins Inc. 16.2 2.7% 98 92 High 42% 14%
CNI Canadian National Railway Company 19.4 1.9% 94 96 High 32% 18%
CVS CVS Health Corporation 14.0 3.0% 81 0 Average 41% 22%
GD General Dynamics Corporation 21.2 1.5% 98 74 Low 31% 11%
HD Home Depot, Inc. (The) 24.8 2.3% 93 92 High 47% 22%
HON Honeywell International Inc. 22.4 2.0% 99 86 Average 40% 14%
HRL Hormel Foods Corporation 20.7 2.3% 98 71 Low 43% 19%
IFF International Flavors & Fragrances, Inc. 26.4 2.0% 81 88 High 50% 16%
ITW Illinois Tool Works Inc. 24.3 2.0% 94 86 High 42% 17%
LMT Lockheed Martin Corporation 27.5 2.3% 85 67 Low 59% 11%
LOW Lowe's Companies, Inc. 20.4 1.9% 93 94 High 36% 24%
LYB LyondellBasell Industries NV 11.5 3.4% 70 94 High 37% 10%
MDT Medtronic, Inc. 21.5 2.3% 98 73 Average 49% 15%
ROK Rockwell Automation, Inc. 28.1 1.9% 85 89 High 49% 9%
SBUX Starbucks Corporation 28.9 2.1% 72 73 Low 66% 24%
SNA Snap-On Incorporated 15.8 2.1% 99 99 High 29% 17%
TEL TE Connectivity Ltd. 21.6 1.6% 84 86 High 33% 13%
TJX TJX Companies, Inc. (The) 22.6 1.5% 90 90 Low 32% 22%
TWX Time Warner Inc. 17.8 1.7% 85 80 Average 38% 8%
TXN Texas Instruments Incorporated 25.3 2.3% 97 90 High 50% 20%
Simply Safe Dividends March 2018 - 48 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Idea Generation – High Yield Stocks The dividend stocks on this list are characterized by moderate-to-low price volatility, dividend yields in excess of 4%, and close to average Dividend Safety Scores. High yield stocks often carry higher business risk or personal tax liabilities (e.g. MLP’s). We do our best to filter out the riskiest ideas by using our proprietary scoring system, but you should always closely analyze these types of stocks. Click on the blue-colored ticker symbols to pull up each company in our Stock Analyzer. I also suggest bookmarking this article: High Dividend Stocks
Ticker Name P/E
Ratio Dividend
Yield Safety Score
Growth Score
Price Volatility
EPS Payout
5yr Div CAGR
BIP Brookfield Infrastructure Partners LP 13.1 4.6% 65 64 Average 60% 12%
DUK Duke Energy Corporation 25.0 4.7% 80 37 Very Low 71% 3%
ENB Enbridge Inc 21.2 6.6% 55 54 Low 125% 16%
EPD Enterprise Products Partners L.P. 20.1 6.8% 64 38 Average 133% 6%
EQM EQT Midstream Partners, LP 12.0 6.5% 67 57 Average 58% 41%
PM Philip Morris International Inc 23.6 4.0% 70 20 Average 92% 5%
PSA Public Storage 20.7 4.1% 91 59 Very Low 85% 13%
HCP HCP, Inc. 9.6 6.8% 55 4 Very Low 77% -6%
IRM Iron Mountain Incorporated 11.7 7.4% 52 22 Average 81% 16%
MMP Magellan Midstream Partners L.P. 17.1 5.8% 61 67 Low 78% 14%
NNN National Retail Properties 14.9 5.0% 94 18 Very Low 73% 4%
O Realty Income Corporation 16.2 5.3% 65 27 Very Low 82% 7%
SEP Spectra Energy Partners, LP 11.7 7.6% 53 49 Low 64% 8%
SKT Tanger Factory Outlet Centers, Inc. 11.5 6.0% 70 27 Very Low 69% 10%
SO Southern Company (The) 81.9 5.2% 67 18 Very Low 422% 3%
SPG Simon Property Group, Inc. 16.1 5.0% 74 44 Low 74% 12%
T AT&T Inc. 17.5 5.5% 78 11 Very Low 94% 2%
TCP TC PipeLines, LP 15.9 8.1% 48 31 Average 88% 5%
VTR Ventas, Inc. 8.7 6.3% 70 34 Very Low 54% 5%
VZ Verizon Communications Inc. 12.4 4.9% 73 16 Low 60% 3%
WPC W.P. Carey Inc. 13.0 6.7% 61 14 Average 86% 10%
XOM Exxon Mobil Corporation 24.6 4.1% 71 26 Average 100% 7%
Simply Safe Dividends March 2018 - 49 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Idea Generation – Dividend Increases Dividend increases are a signal of management’s confidence in the company’s future. Historically speaking, consistent dividend growers have been among the best long-term performers in the market. The following table contains some of the notable dividend increases that were announced over the last month. Click on the blue-colored ticker symbols to pull up each company in our Stock Analyzer.
Ticker Name Dividend Increase
P/E Ratio
Dividend Yield
Safety Score
Growth Score
Price Volatility
EPS Payout
5yr Div CAGR
ABBV AbbVie Inc. 35% 28.0 3.3% 67 86 Very High 62% N/A
TROW T. Rowe Price Group, Inc. 23% 18.1 2.5% 98 75 High 37% 11%
HD Home Depot, Inc. (The) 16% 24.8 2.3% 93 92 High 47% 22%
GLW Corning Incorporated 16% 12.3 2.5% 84 79 High 32% 14%
DHR Danaher Corporation 14% 28.5 0.7% 75 98 Average 19% 41%
CLX Clorox Company (The) 14% 24.1 2.9% 86 59 Very Low 60% 6%
TD Toronto Dominion Bank (The) 12% 14.5 3.4% 92 65 Average 45% 10%
ETN Eaton Corporation, PLC 10% 12.5 3.0% 89 65 Very High 38% 10%
EOG EOG Resources, Inc. 10% 5072.5 0.7% 82 52 Average 3350% 15%
UPS United Parcel Service, Inc. 10% 25.8 3.5% 71 54 Average 56% 8%
UNP Union Pacific Corporation 10% 22.7 2.3% 92 80 Average 43% 15%
WM Waste Management, Inc. 9% 27.6 2.2% 90 66 Low 62% 4%
GPC Genuine Parts Company 7% 20.3 3.2% 81 64 High 60% 6%
MO Altria Group 6% 7.8 4.2% 85 46 Low 80% 8%
XEL Xcel Energy Inc. 6% 18.4 3.5% 77 24 Very Low 61% 6%
CME CME Group Inc. 6% 37.7 1.7% 90 55 Low 54% 8%
KO Coca-Cola Company (The) 5% 42.0 3.6% 87 47 Low 140% 8%
ADM Archer-Daniels-Midland Company 5% 19.9 3.2% 91 29 High 60% 13%
BNS Bank of Nova Scotia (The) 4% 12.6 4.2% 88 15 High 47% 7%
MPW Medical Properties Trust, Inc. 4% 11.3 8.0% 38 30 Average 86% 4%
ORI Old Republic International 3% 14.7 3.9% 75 38 Very High 49% 1%
SEP Spectra Energy Partners, LP 2% 11.7 7.6% 53 49 Low 64% 8%
WGL WGL Holdings Inc 1% 23.5 2.5% 83 35 Low 43% 5%
SHW Sherwin-Williams Company (The) 1% 34.3 0.9% 70 98 High 30% 17%
Simply Safe Dividends March 2018 - 50 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
Idea Generation – Ex-Dividend Dates To receive the next dividend payment from a stock, you must own shares before the company’s ex-dividend date. The following table contains large cap dividend stocks with dividend yields in excess of 2% and upcoming ex-dividend dates. Click on the blue-colored ticker symbols to pull up each company in our Stock Analyzer.
Ticker P/E
Ratio Dividend
Yield Safety Score
Growth Score
Price Volatility
EPS Payout Ratio
5yr Div CAGR Next Ex-Div Date
PEG 46.3 3.8% 66 8 Very Low 57% -2% 03/07/2018
GPC 20.3 3.2% 81 64 High 60% 6% 03/08/2018
KMB 18.5 3.6% 88 54 Low 63% 6% 03/08/2018
MGA 9.4 2.5% 82 81 Very High 19% 14% 03/08/2018
OMC 15.1 3.2% 92 69 High 44% 13% 03/08/2018
VFC 31.2 2.5% 78 73 Low 71% 18% 03/08/2018
RCI 24.1 3.4% 70 33 Average 78% 4% 03/09/2018
AEE 21.5 3.4% 71 10 Very Low 70% 2% 03/13/2018
PSA 20.7 4.1% 91 59 Very Low 85% 13% 03/13/2018
EXR 20.2 3.7% 68 43 Very Low 74% 30% 03/14/2018
GRMN 22.0 3.4% 61 44 Low 76% 3% 03/14/2018
KO 42.0 3.6% 87 47 Low 140% 8% 03/14/2018
MO 7.8 4.5% 85 46 Low 80% 8% 03/14/2018
MRK 51.8 3.5% 98 14 Low 49% 2% 03/14/2018
QSR 39.7 3.1% 64 85 N/A 51% 81% 03/14/2018
TROW 18.1 2.5% 98 75 High 37% 11% 03/14/2018
XEL 18.4 3.5% 77 24 Very Low 61% 6% 03/14/2018
CCI 24.0 4.0% 61 38 Very Low 79% N/A 03/15/2018
GILD 9.0 2.9% 90 65 High 23% N/A 03/15/2018
DTE 18.4 3.5% 83 37 Very Low 60% 7% 03/16/2018
HBAN 19.0 2.8% 66 83 High 39% 17% 03/16/2018
CINF 24.7 2.8% 75 41 Average 66% 4% 03/20/2018
AVB 14.6 3.8% 96 37 Very Low 53% 8% 03/28/2018
ESS 14.8 3.3% 93 58 Low 46% 10% 03/28/2018
APD 11.7 2.8% 89 76 High 27% 8% 03/29/2018
CAH 20.1 2.7% 95 45 Average 53% 15% 03/29/2018
VTR 8.7 6.3% 70 34 Very Low 54% 5% 03/29/2018
Simply Safe Dividends March 2018 - 51 -
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COPYRIGHT © 2015-2018 Simply Safe Dividends LLC
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quality and performance of the content, and any market loss incurred, is with you. In no event shall the
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in an action or contract, tort or otherwise, arising from, out of or in connection with the content or the use
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Simply Safe Dividends is not a licensed financial adviser, and nothing presented herein is, or is intended
to constitute, specific investment advice. It is for educational and information purposes only. Nothing in
this newsletter should be construed as a recommendation to follow any investment strategy or allocation.
Any forward looking statements or forecasts are based on assumptions and actual results are expected to
vary from any such statements or forecasts. No reliance should be placed on any such statements or
forecasts when making any investment decision.
Statistics and information within this newsletter are thoroughly researched and believed to be correct.
However, discrepancies can occur. While Simply Safe Dividends has used reasonable efforts to obtain
information from reliable sources, we make no representations or warranties as to the accuracy, reliability
or completeness of third-party information presented herein. Investors should recheck important data and
do their own research before making stock purchases. No guarantee of investment performance is being
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This copyrighted material is for the sole use of the individual who purchased it. Redistribution is strictly
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As of the time this newsletter was published, Brian Bollinger was long each of the stocks held in the Top
20 Dividend Stocks, Conservative Retirees, and Long-term Dividend Growth portfolios.