On Same-Sex Couples’ Money Matters, Confusion Reigns

The movement to legalize same-sex marriage in the U.S. has progressed with remarkable speed in the year since the Supreme Court struck down the Defense of Marriage Act’s denial of federal benefits to lawfully married same-sex couples.

A recent ruling by the Court of Appeals for the 10th Circuit in Denver declared that same-sex couples had a “fundamental right” to marry. That ruling struck down Utah’s ban on same-sex marriage, as did one the same day in Indiana.

Other federal appeals court decisions — not all necessarily pro-same-sex-marriage — are expected this year.

But a year after the DOMA decision, lesbian, gay, bisexual and transgender investors are still struggling to understand changing laws and are concerned about the financial and legal implications involved, according to new research by Wells Fargo.

Eighty-three percent of those surveyed said they did not fully understand how federal and state laws applied, including 67% of respondents who were currently in legal same-sex marriages.

Despite the confusion, just 47% who were in same-sex marriages or partnerships had sought guidance to help them figure out how recent court rulings and laws affected them personally.

Versta Research conducted an online survey on behalf of Wells Fargo from April 8 to 25 of 875 LGBT investors nationwide. Qualified respondents were non-students, ages 25 to 75, who were the primary or joint financial decision-maker in the household with household investable assets of at least $25,000.

Conversations About Money

The survey showed that LGBT couples had a strong focus on the financial benefits and risks of marriage, but many of these couples were not having conversations about money.

Just 37% of survey participants who were in same-sex partnerships said new marriage laws had prompted new conversations about money.

Twenty-one percent reported that they rarely or never talked about money, while 25% said they talked about money “a lot.”

And 38% admitted that discussions about money had led to friction in their relationships.

More important, researchers said, less than a third of recently married LGBT respondents had reviewed key components of their overall financial health for any changes or adjustments after getting married, including emergency savings, a written retirement savings or investment strategy, a plan or strategy to reduce debt and a careful budget to manage spending.

“So much has changed in the year since the DOMA rulings, and today same-sex couples can legally marry in 19 states and the District of Columbia,” Katherine Dean, managing director of wealth planning at Wells Fargo Private Bank, said in a statement.

“These changes, however, don’t appear to be spurring on conversations about financial issues like saving, investing, and preparing for retirement. When the laws change in a relatively short amount of time, however, there are typically more questions than answers. As an industry, it’s incumbent upon us to provide the kind of information LGBT couples need to make sound decisions so they can achieve their financial goals.”

Seeking Advice

With recent changes in laws affecting same-sex relationships, LGBT investors said they would value help on the following:

The survey found that needs varied among LGBT investors depending on their marital status.

Most of those surveyed preferred to work with professionals who understood the unique needs of the LGBT community.

Sixty-two percent of respondents felt the financial considerations and needs of same-sex couples were different from those of heterosexual couples, and only 49% said they would feel comfortable walking into their local bank and talking about financial issues that affect them as an LGBT person.

“Every legislative action that affects domestic partnerships has the potential to impact the financial situations and investment goals of LGBT investors,” Dean said.

“As financial issues become increasingly complex, LGBT investors see the merits of working with financial professionals specifically trained to understand the unique needs of LGBT couples.”

The Wells Fargo study showed these preferences:

LGBT investors gave mediocre grades to their primary banks or financial institutions with which they did the most business.

The average grade for being LGBT-friendly was a B; for being knowledgeable about new laws impacting LGBT customers, a C+; and for addressing the needs of LGBT customers, a C+.

Other studies have revealed that LGBT investors want to address specific issues with advisors, while being treated like other clients.

Commitment and Beyond

Sixty-one percent of LGBT investors surveyed said they wanted to be married now or sometime in the future.

But of this group, only 54% said commitment and love were the most important reasons to get married (vs. 80% in the U.S. overall).

Thirty-six percent cited financial and legal rights as the most important reasons to get married (compared with 8% in the U.S. overall).

LGBT investors believed these rights and benefits to be most important:

Accredited Domestic Partnership Advisor Program

Wells Fargo, as well as other financial services firms, today uses the Accredited Domestic Partnership Advisor program to educate advisors about the unique needs and financial considerations of same-sex couples and domestic partners.

Financial advisors who earn this designation are equipped to work with domestic LGBT clients to develop a thoughtful approach to help identify and work toward their financial goals, the firm said.

Today, Wells Fargo Advisors has more than 100 ADPA-certified financial advisors nationwide, more than any other firm in the country, according to the statement.

Top 10 Dow Dividend Stocks for June

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The frequency of new highs for the Dow and S&P 500 would make one think that the market is off to the races in 2014, when, in fact, the Dow is ahead by 2.2%, the S&P by 6.2%, the Nasdaq by 4.6% and the Russell 2000 by just 2.1%.

This performance falls well short of investors’ hopes and expectations coming into the new year. So, now that we are closing in on the halfway point, the stutter-start for the market that has characterized the past several months is beginning to give way to the notion that a very good second half of the year is shaping up. Investors should expect back-end-loaded returns for risk-on assets, and that forecast is just now taking hold, with vast numbers of fund managers on the wrong side of the investing landscape by holding too much cash, too much long bond exposure and too many short positions via indices or individual stocks.

End-of-the-quarter window-dressing began in earnest this month, as the wrong-way portfolio managers were provoked into making drastic changes in their asset mix, jettisoning long-dated fixed income, covering shorts and putting those assets (plus uninvested cash) to work in rapid fashion. No professional wants to put out a report card in early July that reveals bad bets and being underweighted in sectors that are leading the market to new highs. For this reason, window-dressing by itself should keep a firm bid under stocks and might well take the S&P up to the extreme high end of the long-term channel uptrend of 2000 by month-end.

With this backdrop of fresh technical highs, professional money realigning to risk-on assets, a low level of investor enthusiasm, rising economic conditions for global markets, persistently low interest rates, strengthening corporate balance sheets, diminished geopolitical risk, highly accommodative central bank policies and history’s greatest number of people entering retirement, the investment case for strategic high-yield assets is very strong for the balance of 2014.

In order to take advantage of this inflow of capital into assets with yield, look no further than the 10 highest-yielding stocks in the Dow Jones Industrial Average. These blue-chip names pay out sizable yields ranging from 3% to 5.2%, and all of them stand to benefit from the market's appetite for income.

Now that we have an idea of what the market will favor during the second half of 2014, let's take a look at the top 10 Dow dividend stocks by yield for June. (Note: All yields and returns are as of 6/26.)

Top Dividend Stock #10: Intel (INTC) Dividend Yield: 2.92% YTD Performance: 18.59% 52-Week Return: 27.22%

The recent price appreciation in shares of Intel (INTC) has pushed its dividend yield down from 3.34% last month to just 2.92% at current levels, and the stock has fallen four spots on our list for June.

After a weak start to the year, INTC has rallied nearly 15% over just the past month. Almost half of that gain came on June 13, after the company announced that it had raised its guidance for revenue and gross profit margin for the quarter and the remainder of the year.

The shares climbed roughly 7% that day and continued upward to make a new 52-week high of $31 on Thursday. Intel cited its expectation for "strong demand for business PCs" as the reason for raising their outlook.

Intel is now expecting to grow revenue to up to $14 billion this year, which is much higher than the previously forecast $12.5 billion to $13.5 billion range. Even after the recent run-up, INTC shares still trade at a reasonable valuation of 16.6 times earnings and, with the 90-cent annual payout, there could be more upside potential in 2014 for both dividend and growth investors.

Top Dividend Stock #9: Merck (MRK)

Dividend Yield: 3.01% YTD Performance: 16.94% 52-Week Return: 24.53%

After a pullback in early May, Merck (MRK) is now challenging its 52-week high at $59.84, trading within just 52 cents of that level last Friday. The trade-off, though, is that the stock's yield is now flirting with the 3% mark.

Merck recently announced its intention to buy Idenix Pharmaceuticals (IDIX) in a deal worth approximately $4 billion. MRK hopes the buyout will allow them to enter the hepatitis C market, where rival Gilead Sciences (GILD) currently dominates with its popular treatment, Sovaldi.

The stock was up on the news, but the valuation is stretched at these levels. At 38.2 times earnings, MRK trades at nearly double the industry average of 19. Still, investors have been rewarding the shares lately, knowing that they have a $1.76 annual payout to look forward to despite its nearly overbought condition.

Top Dividend Stock #8: Cisco (CSCO) Dividend Yield: 3.10% YTD Performance: 9.90% 52-Week Return: 0.69%

Cisco Systems (CSCO) carries several traits that make it an attractive holding at this time. First, the stock is up over 10% year to date, which beats many of the other dividend-paying stocks on our list. It first popped higher when the company announced a dividend increase from $0.17 per share to $0.19 per share, and the yield now sits just above 3%.

Second, the shares are highly undervalued compared to the industry average of almost 41. CSCO has a P/E ratio less than half of that at 16.65 versus peers like VMware (VMW) and Juniper Networks (JNPR), which carry P/E ratios of 40.71 and 26.7, respectively.

Finally, analysts are forecasting that earnings growth will begin to move higher over the coming years, with a long-term projected growth rate of 9.1% per year. Despite the fact that it has outperformed the major indices in 2014, Cisco's dividend yield remains comfortably above 3%. Additionally, a low payout ratio of about 41% gives management the option of raising that dividend in the future.

Top Dividend Stock #7: McDonald's (MCD) Dividend Yield: 3.19% YTD Performance: 4.62% 52-Week Return: 4.40%

McDonald's (MCD) is the biggest restaurant chain in the world, with over 35,000 stores around the globe that serve almost 70 million people per day, and it has one of the most recognizable logos on Earth — the golden arches. The stock has actually performed fairly well in recent months, rising approximately 8.5% since it bottomed out back in February.

A good deal of that upside move came as investors started to pile into dividend-paying blue-chips earlier this year. With a current annual payout of $3.24 per share, the stock yields 3.19% at current prices, and the payout ratio of 56.3% suggest there is room for dividend increases down the road.

When the company reported revenue of $6.7 billion and EPS of $1.21 last quarter, investors pushed the stock over the $100 level, and the shares now sit about two bucks below their 52-week high of $103.78. Even at these elevated levels, MCD makes for a much better value investment than some of its peers.

For instance, MCD has a P/E ratio of just 18.4 compared to competitor Burger King's (BKW) 37.6 multiple and Wendy's (WEN) 37.7 multiple. These metrics, along with the MCD's stable and dependable dividend, make for a great income-generating play on a reliable name.

Top Dividend Stock #6: Procter & Gamble (PG) Dividend Yield: 3.27% YTD Performance: -3.43% 52-Week Return: 1.54%

Procter & Gamble (PG) is one of only a handful of companies that can call itself a Dividend Aristocrat — companies that have steadily increased their dividend payouts for 25 consecutive years. PG has actually gone above and beyond that requirement, having raised its dividend every year for a whopping 58 consecutive years.

The stock got a nice boost after its last increase, which brought the dividend up from 60.15 cents to 64.36 cents per share. The shares pushed up to six-month highs at the $83 level upon the announcement, but they have since come back down and now trade just under $79.

The increased payout and the recent setback in the share price have bumped PG up two places on our list for the second month in a row, and the new payout now accounts for a very decent yield of 3.2%. Also, in its latest earnings report, the company announced earnings per share of $1.04, which was 5% higher than a year earlier. That puts its P/E ratio at 21.4, which isn't great, but it's slightly lower than the industry average.

Top Dividend Stock #5: Chevron (CVX) Dividend Yield: 3.29% YTD Performance: 4.81% 52-Week Return: 10.08%

Chevron (CVX) continued to push up to new highs last week along with the rest of the market, trading to a 52-week high of $133.57 on Monday. The move comes amid accelerated turmoil in the Middle East that pushed the price of WTI crude up to just under $108 per barrel recently.

However, out of all of the U.S. oil companies with segments in the area, CVX is the most insulated from the consequences of the insurgency, as it operates entirely in the Kurdish-controlled area of the country.

CVX has a number of other things going for it as well. Those include a P/E ratio of 12.66 that's slightly below average for the group, a long-term growth forecast of almost 7% and a very nice 3.29% dividend yield, all of which surpass the corresponding numbers for rival Exxon (XOM).

Top Dividend Stock #4: General Electric (GE) Dividend Yield: 3.35% YTD Performance: -6.21% 52-Week Return: 12.54%

General Electric (GE) is a diversified technology, industrial and financial services conglomerate that makes everything from light bulbs to jet engines. After a rough start to the year, the stock has been rebounding since the beginning of February, and it is up about 7% from that point. However, GE's future prospects may be even brighter.

Adding further potential upside value to the stock, the EPA recently proposed new regulations that will require power plants to cut carbon dioxide emissions by 30% by the year 2030. The rules will force some plants that use energy-producing turbines that currently run on coal to switch to natural gas, which could greatly expand the customer base for GE's state-of-the-art gas turbines.

In addition to innovation, GE also excels at returning value to its shareholders. After cutting its dividend in the wake of the 2008-2009 financial crisis, the company has raised its payout for each of the last four years.

Most recently, GE announced a payout for the third quarter of $0.22 to be paid on July 25. The distribution makes for a 3.35% yield at current levels, and investors who count on dividends for income can look forward to increased payouts in the future, as GE sports a payout ratio of just 52.4%.

Top Dividend Stock #3: Pfizer (PFE) Dividend Yield: 3.52% YTD Performance: -3.40% 52-Week Return: 3.97%

Pfizer (PFE), the worldwide biopharmaceutical company, failed to secure a deal to buy out AstraZeneca PLC (AZN) last month, offering three different bids before giving up hope of acquiring the London-based biopharmaceutical company. Despite that disappointing news, PFE remains at No. 3 on our list again this month, and it carries one of the lowest payout ratios in the Dow at just 46.2%.

The low payout ratio means that the company will be able to increase its dividend payments in the future without the risk of incurring debt or having to pull from its cash reserves. Additionally, it gives investors something to look forward to. If PFE announces an increased payout, shares could soar on the news.

PFE reported solid first-quarter earnings results, as the EPS reading of $0.57 per share beat analyst estimates of $0.55 per share by 3.6%, as well as revenue that came in at $11.4 billion. At current levels, PFE trades pretty much in line with its peers, with a P/E ratio of 18 vs. the 19 industry average. That reasonable valuation, together with its 3.5% dividend yield, easily sets it apart from the pack and makes PFE a solid long-term dividend investment.

Top Dividend Stock #2: Verizon (VZ) Dividend Yield: 4.33% YTD Performance: -0.36% 52-Week Return: -0.16%

Verizon (VZ) has been essentially flat in 2014. But it got a bit of a boost when Warren Buffett announced that he had purchased approximately $500 million worth of VZ shares during the first quarter.

Several other billionaire hedge fund managers, including John Paulson of Paulson & Co. and Dan Loeb of Third Point Management, also added VZ to their stable of holdings recently. Part of the reason for all of the attention VZ has been receiving lately has to do with its ability to grow earnings per share in the first quarter.

According to a press release, "Verizon reported $1.15 in EPS in first-quarter 2014, compared with 68 cents per share in first-quarter 2013." That accounts for an increase of just under 70%. The biggest contributors to that growth were its wireless and TV segments, and the company brought in total revenue of $20.9 billion during the quarter.

VZ will release its next quarterly report in mid-July, and many dividend investors will be anxious to see if it can continue to grow at this accelerated pace. It is also likely that VZ will announce an increase in its dividend in the near future — it tends to do so once a year — as it is coming up on its fourth $0.53 quarterly payout. The next ex-div date will fall on July 8, so you can start collecting that 4.3% yield in no time at all.

Top Dividend Stock #1: AT&T (T) Dividend Yield: 5.24% YTD Performance: 0.28% 52-Week Return: 2.29%

AT&T (T) is the largest telecommunications provider in the United States and, when Amazon.com (AMZN) announced its new Fire smartphone last week, they chose to make AT&T the exclusive carrier. However, T stock failed to make a move on the news, as it is largely expected that the new addition to the smartphone space will not provide the same kind of boost to the company's bottom line as the iPhone did when it was first released on AT&T's network in the mid-2000s.

Part of the problem is that when the iPhone came out exclusively for AT&T, it was the first of its kind to hit the market. Now that smartphones have been around for almost a decade, T and AMZN are faced with the challenge of getting customers to replace their current smartphone for a brand-new one with much less name recognition than either the Apple (AAPL) iPhone or one of the Google (GOOG) Android models.

However, it seems as though T anticipated that this would be the case. At present, AT&T earns the majority of its revenue from its wireless segment, but just last month the company announced that it would buy satellite TV provider DirecTV (DTV) in a deal valued at approximately $67 billion. The acquisition will help T compete with companies like Comcast (CMCSA) and will allow it to meet the needs of customers who want phone, Internet and TV all from one provider.

While the stock will not likely see a run-up in its share price as a direct result of either deal, T pays a handsome 5.24% dividend yield, which makes it great for a long-term portfolio. Also, the stock trades at just 10.2 times earnings, an attractive valuation versus the 18.3 average for its peer group.

Bryan Perry is the editor of Cash Machine, a newsletter focused on high-yield income investing with the goal of maintaining a blended total yield of 10% across two portfolios. Bryan is also the editor of Extreme Income, which uses the power of historically cheap money to create a leveraged "baby hedge fund" strategy that paves the way to massive profits and 4x greater income.

Benefit From Mobile Gaming Growth With This Stock

Glu Mobile (GLUU) is off to a solid start in 2014 with impressive results, driven by strong execution and the popularity of its games such as Deer Hunter and Eternity Warriors.

Glu Mobile has a huge opportunity to expand its business further as the mobile market is continuously expanding and more people are seen playing games on their smartphones and tablets. Also, Glu Mobile gets most of its revenue from its partner Apple's app store that should grow in the future as Apple is bringing in various new devices that will help Glu in a big way. Let's take a close look at its recent results and see why the company can be a good buy for the long run.

A comparatively good performance

Glu Mobile's core fundamentals such as revenue and operating profit were quite impressive in the quarter. The company posted revenue of $47 million, an increase of 90% year-over-year, beating analysts' estimates of $39.5 million for the quarter. Also, the company was able to register a net operating income of $5.8 million, up from a net loss of $2.2 million in the corresponding period last year.

Also, the company is expected to perform well in the market going forward as it is a leading developer and publisher of free-to-play games for smartphones and tablets.

Strong pipeline

Glu Mobile's games such as Deer Hunter and Eternity Warriors are gaining traction in the market. Besides, Glu Mobile is focused to bring in various top grossing games on these platforms. Glu Mobile has electrifying games such as Contract Killer 3, Hercules, and Tap Sports: Baseball, on the way.

Glu Mobile is also expected to benefit from its action shooter game RoboCop that it had launched earlier this year. RoboCop has been very impressive and performed well after its launch. It accounted about $3.5 million in revenue. Glu is looking to keep this momentum in action shooter games going with its upcoming James Bond title, which is again very exciting and will drive its growth going forward.

Apple prospects

However, Glu Mobile has a big challenge ahead as Apple has made 17-plus age ratings a universal standard for any shooter app on the App Store worldwide that could dampen its market share. This change could also adversely impact download volumes of some of Glu's biggest franchises, according to management. Hence, this is a point that Glu investors need to watch going forward.

Nevertheless, Glu Mobile is expected to benefit going forward as Apple is planning to launch two new iPhones this year, one with a 4.7 inch screen and another with a 5.5 inch screen. A bigger form factor should enable Apple to appease those consumers who had stayed away from the company's phones due to the lack of a big screen.

Hence, Apple is expected to take away a significant market share from leading Android players such as Samsung and LG with a larger device. This will also result in an increase in the reach of the Apple app store, which accounts for a majority of Glu Mobile's revenue.

An important acquisition

Apart from this, Glu's acquisition of the Deer Hunter intellectual property from Atari back in 2012 has played a key role in the company's growth so far. Encouraged by the performance of this acquisition, Glu is acquiring PlayFirst, which has popular intellectual properties such as Diner Dash, Cooking Dash, Wedding Dash, and Hotel Dash that should increase its profitability going forward. These games have been downloaded over 750 million times in the last decade, spread across several platforms. So, Glu's growth can receive a big boost as a result of this acquisition.

Conclusion

With shares gaining more than 60% in the last one year, Glu's current outlook indicates potential growth and its shares could be soaring going forward. Also, its revenue in the current fiscal year is expected to increase a whopping 40%, and the company is also expected to turn in an annual profit on a non-GAAP basis. So, even after a solid run, Glu Mobile is still a good investment.

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General Dynamics (GD) Dividend Stock Analysis

Linked here is a detailed quantitative analysis of General Dynamics (GD). Below are some highlights from the above linked analysis: Company Description: General Dynamics is the world's fourth largest military contractor and also one of the world's biggest makers of corporate jets.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number GD is trading at a premium to all four valuations above. The stock is trading at a 49.9% premium to its calculated fair value of $71.45. GD did not earn any Stars in this section. Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% GD earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1979 and has increased its dividend payments for 23 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA (20-year Treasury bond). Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA The NPV MMA Diff. of the $741 is below the $1,200 target I look for in a stock that has increased dividends as long as GD has. If GD grows its dividend at 10.0% per year, it will take 6 years to equal a MMA yielding an estimated 20-year average rate of 3.68%. Memberships and Peers: GD is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index. The company's peer group includes: The Boeing Co. (BA) with a 2.4% yield, Lockheed Martin Corporation (LMT) with a 3.2% yield and Textron Inc. (TXT) with a 0.2% yield. Conclusion: GD did not earn any Stars in the Fair Value section, earned two Stars in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of two Stars. This quantitatively ranks GD as a 2-Star Weak stock. Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $90.95 before GD's NPV MMA Differential increased to the $1,200 minimum that I look for in a stock with 23 years of consecutive dividend increases. At that price the stock would yield 2.7%. Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $1,200 NPV MMA Differential, the calculated rate is 11.5%. This dividend growth rate is above the 10.0% used in this analysis, thus providing no margin of safety. GD has a risk rating of 1.75 which classifies it as a Medium risk stock. GD, with its diversified offerings, is in one of the best positions to survive defense spending cuts. The company's Aerospace business continues to enjoy a significant backlog for large-cabin aircraft, and should remain strong over the next several years. There is an opportunity to see margins expand as production becomes increasingly efficient. The recent $1.1 trillion Omnibus bill passed earlier this year is seen as a positive for defense companies. It provides the Pentagon with nearly $93 billion to buy weapons and another $63 billion for R&D. However, the defense sector will continue to face reduced spending (compared to historical rates) from the Pentagon. The company has a pristine balance sheet with low free cash flow payout and debt to total capital. GD keeps its yield competitive through annual dividend increases, with the most recent increase of 10.7% coming in March 2014. GD is currently trading above its calculated fair value price of $71.45. This is a solid company and I will continue to look for opportunities to add to my position. Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information. Full Disclosure: At the time of this writing, I was long in GD (4.6% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here. Related Articles: - Abbvie Inc. (ABBV) Dividend Stock Analysis - Emerson Electric Co. (EMR) Dividend Stock Analysis - Cincinnati Financial Corp. (CINF) Dividend Stock Analysis - AT&T Inc. (T) Dividend Stock Analysis - More Stock Analysis

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Health care spending is rising

Health care spending rose at the fastest pace in 10 years last quarter, a development that could foreshadow higher costs for consumers this year.

Expenses for health care rose at a 5.6% annual rate in the fourth quarter, the Bureau of Economic Analysis said last week. The jump triggered a sharp upward revision in the government's estimate of consumer spending overall and accounted for nearly a quarter of the economy's 2.6% annualized growth in the last three months of 2013.

Driving the increase was an $8 billion rise in hospital revenue--more than the previous four quarters combined, according to the Census Bureau and RBS Americas. RBS economist Omair Sharif says the increase in hospitals' income was puzzling because the number of inpatient days dipped 1% during the fourth quarter.

The increase is a marked change from slow-growing rates of health care prices and spending in recent years. Many unemployed Americans went without health insurance or limited their spending during the recession and sluggish recovery, says Dan Mendelson, CEO of consulting firm Avalere Health.

Also, the 2010 Affordable Care Act gave incentives to hospitals to become more efficient and limit patient readmissions. Insurance companies increasingly have shifted costs to patients through high-deductible plans and other measures, prompting Americans to limit visits to doctors and hospitals, he says.

But those trends may be leveling off and long-term upward pressures on health care costs, such as the growth of expensive high-tech treatments, are re-emerging, Mendelson says.

Meanwhile, the economy is picking up. Since late 2011, employers have added 2.6 million jobs and the unemployment rate has fallen from 8.5% to 6.7%.

"The improved economy could result in individuals having the resources to spend on healthcare services," American Hospital Association spokeswoman Jennifer Schleman says of the fourth-quarter jump in hospital revenue.

The Affordable Care Act's mandate for Americans to have! health coverage this year or pay a penalty will fuel further spending increases this year, says George Miller, a fellow at the Altarum Institute's Center for Sustainable Health Spending. The Centers for Medicare and Medicaid Services expect health spending to rise 6.1% this year, up from about 4% in 2013, as an estimated 11 million Americans gain health insurance.

What consumers pay for health carealso may edge higher. Annual medical inflation has drifted down since the recession and was at a 50-year-low of 0.9% in January, according to Capital Economics. But the decline was partly due to the expiration of a large number of drug patents in 2011 and 2012, causing expensive branded drugs to be replaced by cheaper generics.

With fewer patents expiring the next two years, "most of this fall in drug inflation will be reversed," says Paul Dales of Capital Economics.

Dales counts that among the factors that should push annual health care inflation to 2.5% during the next two years and nudge overall inflation, excluding food and energy costs, above the Federal Reserve's 2% target as early as next year. That could prompt the Fed to raise interest rates sooner than expected in 2015, he says.

Not everyone believes higher health care spending and prices are coming. Larry Van Horn, executive director of health affairs at Vanderbilt University's Owen Graduate School of Management, says the shift of the cost burden to patients will continue to drive down medical expenditures.

"I think we have a long way to go," he says.

Lululemon’s Savior? The Guy Who Caused It to Sink

Lululemon Athletica’s (LULU) founder Dennis “Chip” Wilson has lost that Zen feeling since being ousted as the head of the yoga retailer–and might be taking steps to retake control.

Bloomberg News

Over the weekend, the Wall Street Journal reported that Wilson was working with Goldman Sachs (GS) as he tries to figure out what’s the best way to either retake control of Lululemon or sell his stake in the company.

Sterne Agee’s Sam Poser and Ben Shamsian worries that Wilson’s history of making insulting comments could make his return difficult:

If the reports are accurate, a strategic acquisition by a large apparel company is unlikely. Given the domestic and international growth objectives and fixed cost structure, the free cash flow is not large enough to allow for significant balance sheet leverage by private equity. Based on his comments from last November which we contend damaged the LULU brand, we believe potential partners may be warded off by Mr. Wilson’s volatility. We do not believe that Mr. Wilson will detach himself from LULU, which leaves us on the sidelines.

Shares of Lululemon have gained 3.5% to $41.64 at 11:31 today.

Inflation Trend and the Weather

With current food prices rising and the possibility of the return of El Nino looming, MoneyShow's Jim Jubak weighs the possible repercussions, and who's likely to feel the impact the worst.

Food commodity prices are soaring. The Federal Reserve may not care since the core inflation number it watches takes food and energy prices out of the calculation. But commodity traders do. And so does your wallet, I'll bet.

Ahead of today's meeting of the Federal Reserve's interest-rate-setting Open Market Committee, the Bureau of Labor Statistics yesterday, March 18, reported a miniscule 0.1% increase in the core inflation rate in February. On an annual basis, core inflation is up just 1.6%. That's well short of the Fed's 2.5% target. The very low rate of inflation is one more reason to think that the Fed will hold its course at today's meeting with another $10 billion reduction in what was once a program to buy $85 billion a month in Treasuries and mortgage-backed securities and a pledge to keep short-term rates at their current low 0%-0.25% range deep into 2015.

But for those of us who live in the real world—as opposed to the Fed's world, where energy and food prices don't count in calculating inflation—the inflation trend is a little ominous. Food prices climbed 0.5% in February, the fastest monthly increase since September 2011. Prices for meat, poultry, eggs, and fish climbed 1.2% in the month.

The price increases don't stop with those food items. Coffee prices are up 70% thanks to unseasonably dry weather in Brazil. An epidemic of pig virus has sent pork prices up 40%. Wheat is up on the crisis in the Ukraine and on extreme cold in the United States. Dairy prices are up on rising demand from China.

And current weather may not be the end of the problem. Last week, Australia's Bureau of Meteorology became the third major national weather forecaster to issue an alert for El Nino. This cyclical weather pattern results from a warming of ocean surface temperatures in the Pacific that triggers drought and floods in areas that can include the wheat growing regions of Australia, Canada, the United States, India, and Argentina. El Nino last developed in 2009 and the last strong pattern—in 1997-1998—caused billions of damage to US crops. A strong El Nino pattern could produce drought in 2015 that would drive down production of cocoa and palm oil in West Africa, Indonesia, and Malaysia, and reduce harvests of wheat, sugar, cotton, and rubber.

It's too early to be certain that the El Nino pattern will arrive this year and next or that it will be strong enough to have a major effect on the prices of food commodities.

But the current increases in food commodity prices have been enough to push net long positions among commodity traders to the highest level in four and a half years.

If those traders are right, and food commodity prices are headed much higher, it would be bad news for consumers and for consumer companies such as McDonald's (MCD) and PepsiCo (PEP) that have to pay higher prices.

And it would be good news for food commodity producers such as the Fonterra Dairy Cooperative Group ((AU:FSF) (NZ:FSF) in Sydney and Auckland, respectively), and for companies, such as Deere (DE), that sell equipment to farmers.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did own shares of Fonterra as of the end of December. For a full list of the stocks in the fund see the fund's portfolio here.

Former NAPFA chairman Spangler gets 16 years for fraud, must pay $19.8M in restitution

Mark Spangler in 2002 Kathleen King

Mark F. Spangler, an ex-chairman of the National Association of Personal Financial Advisors, has been sentenced to 16 years in prison on 32 criminal counts that include money laundering, investment adviser fraud and wire fraud.

Mr. Spangler, 58, received his sentence in the U.S. District Court in Seattle on Thursday. In addition to serving time in prison, he faces three years of supervised release and must pay $19.8 million in restitution, according to a statement from the Federal Bureau of Investigation.

The disgraced financial adviser — who was chairman of the fee-only adviser organization NAPFA from 1996 to 1998 — was convicted last November.

“[Mr. Spangler] risked his clients' retirement funds, money for their children's education, for charitable giving and for their livelihood on risky startup ventures — the very investments they told him they wanted to avoid,” U.S. Attorney Jenny A. Durkan noted in the FBI statement.

“He now has a long time to think about all the harm he has done.”

In an e-mailed statement attributed to NAPFA national board chair Linda Leitz, NAPFA spokeswoman Laura Fisher wrote, “While this illegal activity happened several years after Mark Spangler was chairman, the situation is very unfortunate for all involved.”

The scheme involving Mr. Spangler goes back to April 2003, according to the federal indictment. Between 2003 and 2011, he and his firm, The Spangler Group, allegedly moved some $46 million in client dollars into a pair of startup firms, Terahop Networks Inc., a now-defunct manufacturer of wireless devices, and Tamarac Inc., a portfolio management software firm.

Mr. Spangler was a founder of Terahop and a co-founder of Tamarac. Tamarac was purchased by Envestnet Inc. in 2012.

Envestnet | Tamarac did not provide comment.

Though clients' dollars were allegedly being put toward Terahop and Tamarac, Mr. Spangler indicated on their statements that their funds were invested in publicly traded securities, “which were generating a reasonable rate of return,” according to the indictment.

For instance, in 2011, Mr. Spangler allegedly pitched new investors, telling them that his investments were doing “extremely well,” and that “$10,000 invested in the fund in 2000 was worth more than $21,000 at the end of 2010 (including annual interest payments of 7%+).” This wasn't true, according to federal authorities.

Rather, while clients were told that they were in a fund that would invest in “debt and hybrid securities” which “may” be traded on public markets, their money was allegedly invested in Terahop, ! “which was generating no revenue and which [Mr. Spangler] shut down in April 2011,” according to the indictment.

Clients allegedly received phony quarterly account statements that inflated their account values. When some of them tried to liquidate their investments, Mr. Spangler allegedly used other investors' funds to pay the clients who wanted out, according to the indictment.

For instance, in 2009, when one client sought liquidation after finding out what her money was invested in, Mr. Spangler allegedly told her he wouldn't be able to provide her with the funds until “several quarters in the future,” according to the indictment. Eventually, Mr. Spangler used other clients' money to help cover a transfer back into the exiting client's account, according to the indictment.

Eventually, Mr. Spangler didn't have enough money to cover all of the liquidation requests and he had to put his investment firm into receivership, according to the FBI.

Mr. Spangler told his clients that their assets were valued at over $73 million. But the adviser eventually ran out of money and was only able to recover $28 million for the victims, leading to a loss of about $50 million, according to the FBI.

A related civil suit brought by the Securities and Exchange Commission is continuing.

A call to Mr. Spangler's attorney, John Carpenter, was not returned.

Top 5 Dividend Companies To Watch For 2015

By John Mylant, founder and CEO of OptionsWeekly.Org

NEW YORK (TheStreet) -- One of the biggest fears among financial market participants is rising interest rates, but I don't think they're all that bad.

Sure, I realize that as bond yields rise, they could hurt variable loan rates and possibly stifle economic growth. There is no doubt that some investors will struggle in the short term, as they have this summer with the recent spike in rates. Some have seen dividend returns go down, while others have seen mutual funds do the same.

But if investors hold out long enough, those assets will come back and things will get better. In the long haul, the only people who really will be hurt are those who are thinking short term and making their "paper loss" an actual one by selling their holdings. I'd like to see the bond markets develop and move on their own without intervention from the Federal Reserve. The "artificially low rates" that have been created by the central bank's quantitative easing programs have hurt many conservative investors. It has been particularly hard for retirees, who are getting miniscule returns. When you factor in inflation, sometimes even a bond investment can be a losing proposition. Higher rates will allow retirees to get a better return on their conservative investments without taking more risk. I realize that rising rates may mean short-term pain, but I believe the S&P 500 and the Dow Jones Industrial Average will be better off for them in the long run. There is a lot of cash sitting on the sidelines doing nothing, and I believe the holders of this cash would love to see interest rates go up so they can get back into the markets. Bonds have not been a viable alternative to investing in stocks for a long time, and higher interest rates could create better competition between bonds and stocks, leading to steadier market growth. I cannot say for sure, but if interest rates go up at the right pace we may see many "knee-jerk reactions" in the markets that will provide buying opportunities for bonds and stocks.

Top 5 Dividend Companies To Watch For 2015: 3M Company(MMM)

3M Company, together with subsidiaries, operates as a diversified technology company worldwide. The company?s Industrial and Transportation segment offers tapes, coated and non-woven abrasives, adhesives, specialty materials, filtration products, energy control products, closure systems for personal hygiene products, acoustic systems products, and components and products that are used in the manufacture, repair, and maintenance of automotive, marine, aircraft, and specialty vehicles. Its Health Care segment provides medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products, health information systems, and food safety products. The company?s Display and Graphics offers optical film solutions for LCD electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphics sheeting and systems; and mobile interactive solutions, includin g mobile display technology, visual systems products, and computer privacy filters. The company?s Consumer and Office segment provides office supply products, stationery products, construction and home improvement products, home care products, protective material products, certain consumer retail personal safety products, and consumer health care products. Its Safety, Security and Protection Services segment offers personal protection products, safety and security products, cleaning and protection products for commercial establishments, track and trace solutions, and roofing granules for asphalt shingles. The company?s Electro and Communications segment provides packaging and interconnection devices; fluids that are used in the manufacture of computer chips, and for cooling electronics and lubricating computer hard disk drives; high-temperature and display tapes; insulating materials, including tapes and resins; and related items. The company was founded in 1902 and is based in St. Paul, Minnesota.

Advisors' Opinion:

• [By Ben Levisohn]

  Textron (TXT) rose 19% to $37.29 this week after it agreed to buy Beechcraft for $1.4 billion. Allergan (AGN) advanced 12% to $107.73 after Restatis was protected from generic competition, and�Vertex Pharmaceuticals�(VRTX) finished up� 10% at $71.83 after a clinical study didn’t show what the biotech company had hoped it would but left open the possibility of future success. 3M (MMM) jumped 8.1% to $136.72 after increasing its dividend, share buyback and guidance–and it was upgraded by JPMorgan to boot.

• [By CFA Institute Contributors]

  3M Co. (MMM)

  3M is a diversified, mature company and a good illustration of how to tackle the equity risk premium and assumptions about terminal value. Damodaran joked that 12 September 2008 was his "last day of innocence" because it was the Friday before the U.S. Treasury department decided the fate of Lehman Brothers. The Monday after the investment bank collapsed, market premiums were drastically different than the week before. To capture this, Damodaran calculates a market implied equity risk premium derived from modifying a yield-to-maturity formula to account for the value of the S&P 500 using projected future cash flows. He argues that the conventional practice of using Ibboston data for the equity risk premium not only doesn't capture the dynamic premium investors require to invest in stocks over risk-free assets, but it also has such a high standard error as to make the data meaningless.

• [By Todd Campbell]

  If recent trends in employment and confidence continue, pent-up demand from consumers for dentistry could benefit a variety of other suppliers, too, including�Align Technology� (NASDAQ: ALGN  ) ,�3M (NYSE: MMM  ) , and�Danaher (NYSE: DHR  ) .

• [By Matt Thalman]

  On Thursday, 3M (NYSE: MMM  ) kicks things off before the opening bell and is expected to post earnings per share of $1.70. With the company's previously expected top-line growth of around 2% to 6%, it will be interesting to see if management can pull off that feat as major world economies are still struggling. With China's GDP growth continuing to slow, I'll be looking at how 3M performed in that market and see whether any headway is being made in Europe, as the whole EU remains flat on a GDP basis.

Top 5 Dividend Companies To Watch For 2015: Reynolds American Inc(RAI)

Reynolds American Inc. (RAI), through its subsidiaries, manufactures and sells cigarette and other tobacco products in the United States. It offers cigarettes under the brand names of CAMEL, PALL MALL, WINSTON, KOOL, DORAL, SALEM, MISTY, and CAPRI; and cigarettes and other tobacco products under the NATURAL AMERICAN SPIRIT brand name, as well as manages various licensed brands, including DUNHILL and STATE EXPRESS 555. The company also provides smokeless tobacco products, including moist snuff under GRIZZLY and KODIAK brand names; pasteurized tobacco under CAMEL Snus brand name; milled tobacco under the brand name of CAMEL Dissolvables; other tobacco products, such as little cigars under WINCHESTER and CAPTAIN BLACK brand names; and roll-your-own tobacco under the brand name of BUGLER. RAI sells its products primarily through distributors, wholesalers, and other direct customers, including retail chains, as well as distributes its cigarettes to public warehouses. The compan y was founded in 1875 and is headquartered in Winston-Salem, North Carolina.

Advisors' Opinion:

• [By Patricio Kehoe] >Lorillard Inc. (LO). In addition to the popularity of its brands, Phillip Morris benefits from scale advantages, combined with the historically strong brand loyalty among smokers, earning the firm strong pricing power. This advantage has allowed revenue to nearly double since 2006, leaving its current level of $77.4 billion.

  Regarding Taxes, Regulations and Margins

  Despite recent anti-tobacco laws passed by the European Union and the Food and Drug Administration (FDA) in the U.S, the company�� pricing power has helped maintain its margins. In 2012, for example, Phillip Morris hiked prices on its products in Russia, Germany, Belgium, Canada, France, Greece and Spain, among others. Although the necessary measure caused substantial volume declines in these countries, consumers rapidly became accustomed to the increased prices, and returned to their habitual product consumption. Given the success of this strategy, the firm is likely to rely on it in Japan for 2014, where taxes are expected to increase yet again by 8%, after the 40% spike in October 2010.

  Another profitable business opportunity may come from the company�� recent cross-licensing agreement with its parent firm Altria, regarding next-generation products. The deal will allow Phillip Morris to market Altria�� eCig products outside the U.S, while the parent firm commercializes the tobacco giant�� two heated tobacco products, Platform 1 and Platform 2, within the U.S. Platform 1 is meant to launch in 2014, and Platform 2 a year later, which should help the company branch out to changing consumer habits among smokers and generate further revenue. On another note, Phillip Morris��shareholder returns should not pass unseen by investors. Since 2008, the company has returned $59.1 billion to its investors via share repurchases ($27.9) and dividends ($24), and currently holds a steady dividend yield of 4.39%.

  Bottom Line

  With an EPS growth of 16.90%���well above the in

• [By WWW.DAILYFINANCE.COM]

  Ann Summa/Time Life Pictures/Getty ImagesThe Pets.com sock puppet has become synonymous with the dot-com bust. As an investor, you need to be smart about where you're putting your money to work. Investing your hard-earned cash in companies that won't use it well -- or in products that haven't proven themselves -- can quickly come around to bite you. Case in point? These 10 famous examples of investment gone horribly wrong: 1. DeLorean Motor Marty McFly's time-traveling adventures weren't the only juicy story featuring the futuristic DeLorean. The inventor of the car with cool side-opening doors from "Back to the Future was caught on tape during an FBI sting declaring the suitcase of cocaine he planned to sell was as "good as gold." The cocaine, worth $24 million, was John DeLorean's last-ditch attempt to save his floundering company from financial ruin. This (combined with charges of defrauding his partners) lost all trust he had with investors. The firm filed for bankruptcy in 1982. (An unrelated company using the same name services the 9,000 cars made.) 2. The Dutch Tulip Craze In the 1630s, the Dutch were flying high on the flowers recently introduced from Turkey. Tulip bulbs became a highly sought-after commodity, with one bulb going for the equivalent of an entire estate. Many investors got so excited that they sold everything they had to get in on the deal. But, like any craze, tulip mania came to an end. As more people started to grow tulips and prices began to lower, investors raced to sell, resulting in an economic depression that still serves as a warning today. 3. Charles Ponzi The famous swindler, whose name is now synonymous with scams, did his dirty dealings back in the 1920s. Cashing in on people's desire to get rich quick, Charles Ponzi wasn't the first to run a pyramid scheme, but he was the first to get so good at it people took notice. His racket involved enticing investors to buy discounted foreign postal reply coupons, which they coul

• [By Sue Chang and Saumya Vaishampayan]

  Lorillard Inc. (LO) �shares retreated 3.2% after four sessions of strong gains. The Financial Times reported earlier this week that Reynolds American Inc. (RAI) �is considering a takeover of Lorillard. Shares of Reynolds also slid 3.6%.

• [By Ben Levisohn]

  Merger activity has been good news for both acquirer and acquired, so why shouldn’t tobacco get in the game? It might be, as reports suggest that Reynolds American (RAI) could be making a play for Lorillard (LO).

Hot Supermarket Companies To Invest In Right Now: NextEra Energy Inc. (NEE)

NextEra Energy, Inc., through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. As of December 31, 2010, NextEra Energy had approximately 43,000 mega watts of generating capacity. The company involves in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves approximately 8.7 million people through approximately 4.5 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless carriers, Internet, and other telecommunications companies. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in May 2010. NextEra Energy, Inc. was founded in 1984 and is headquartered in Juno Beach, Florida.

Advisors' Opinion:

• [By David Dittman]

  NRG Energy Inc�� (NYSE: NRG) 2013 coal-fired share of generation was 28.8 percent, but it�� been actively adding renewable sources. Its stock was up 2.2 percent. NextEra Energy Inc (NYSE: NEE), owner/operator of the largest fleet of renewable generation in the US with just 1.7 percent of its output from coal, was up 2.8 percent.

• [By Richard Stavros]

  Among those companies that are winding down their spending programs, NextEra Energy Inc (NYSE: NEE) accounts for almost 30 percent of the projected $10 billion decline in annual spending from 2013 to 2015. Other larger-cap companies with projected 2015 budgets that are below their 2013 levels include: CenterPoint Energy Inc (NYSE: CNP), Dominion Resources Inc (NYSE: D), PPL Corp (NYSE: PPL), Public Service Enterprise Group Inc (NYSE: PEG), and Southern Company (NYSE: SO).

• [By David Dittman]

  Question: NextEra Energy Inc (NYSE: NEE) is starting to look like it should split being up around 90. What’s your opinion?

  Answer: A split would make the stock look cheaper for everyday retail investors, for sure. I’m not sure what management’s intentions are on this front. The company’s fourth-quarter and full-year 2013 conference call starts in less than an hour; I’ll review the transcript for any relevant commentary.
  NextEra is considering a spinout of certain renewable assets operating under long-term power purchase agreements into a “YieldCo” structure, similar to a move made by NRG Energy Inc (NYSE: NRG) in 2013.

Top 5 Dividend Companies To Watch For 2015: AvalonBay Communities Inc. (AVB)

AvalonBay Communities, Inc. engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. As of January 31, 2009, the company owned or held a direct or indirect ownership interest in 164 operating apartment communities comprising 45,728 apartment homes in 10 states and the District of Columbia. It also held a direct or indirect ownership interest in 14 communities under construction, as well as held rights to develop an additional 27 communities. The company?s markets are located in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Midwest, the Pacific Northwest, and the Northern and Southern California regions of the United States. AvalonBay Communities has elected to be taxed as a real estate investment trust and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 1978 and is based in Arlington, Virginia.

Advisors' Opinion:

• [By Amanda Alix]

  With 93% of the multifamily units breaking ground in the first quarter slated for rental, apartment REITs like AvalonBay Communities (NYSE: AVB  ) , Essex Property Trust Inc. (NYSE: ESS  ) and Equity Residential (NYSE: EQR  ) are looking like a great way to invest in the new "renter nation".

• [By Sean Williams]

  Another big factor to consider is that Equity Residential and AvalonBay Communities (NYSE: AVB  ) both recently combined to purchase Archstone. Under normal circumstances, residential-REITs like Equity Residential and AvalonBay would go into debt and build new communities, benefiting from the build-out years down the road. Archstone already has a well-established portfolio of rental properties, meaning the transition from purchase to profit is shortened dramatically. Equity Residential took a little over a 26% stake in the Archstone rental portfolio with AvalonBay picking up the remainder.

• [By Sean Williams]

  To get a better idea of how RealPage is doing, it's always best to look at occupancy rates for some of the nation's biggest residential-REITs. In AvalonBay Communities' (NYSE: AVB  ) most recent quarter, the company reported a 5% increase in revenue attributable to a 4.7% boost in prices in established communities, and a 0.3% uptick in occupancy. For Equity Residential (NYSE: EQR  ) it was much of the same, with revenue rising 5.4% in the fourth-quarter as occupancy rates rose 40 basis points to 95.4% from the year-ago period. Finally, Essex Property Trust (NYSE: ESS  ) delivered some of the strongest occupancy results of all, with 96.9% of its units occupied as of the end of January. The point is that with occupancy rates at their lowest levels in more than a decade, these residential REITs are driving growth by boosting prices because of rent scarcity.

Top 5 Dividend Companies To Watch For 2015: P.T. Telekomunikasi Indonesia Tbk.(TLK)

Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk provides telecommunication and network services worldwide. The company?s Fixed Wireline segment offers local, domestic long-distance, international telephone services, and other telecommunications services, including leased lines, telex, transponder, satellite, and very small aperture terminal (VSAT), as well as ancillary services. Its Fixed Wireless segment provides local and domestic long-distance code division multiple access-based telephone services, as well as other telecommunication services within a local area code. Perusahaan Perseroan?s Cellular segment offers mobile cellular telecommunication services. Its network services comprise satellite transponder leasing, satellite broadcasting, VSAT, audio distribution, and terrestrial and satellite-based leased lines. The company?s data and Internet services include short messaging service for fixed wire line, fixed wireless, and cellular phones, dial-up and broadband Internet access, virtual private network (VPN) frame relay, Internet protocol (IP) VPN, voice over IP for international calls, integrated services digital network connections, and other multimedia services. The company also provides information services, such as billing, directory assistance, and content services; and wireless application protocol, Web portal, ring back tones, voicemail, and building management services. In addition, it offers consultancy services, as well as constructs and maintains telecommunications facilities; interconnection services; telephone directory production services; and cable and pay television services. As of December 31, 2010, the company served 120.5 million customers, including 8.3 million fixed wireline telephone subscribers, 18.2 million fixed wireless telephone subscribers, and 94.0 million cellular telephone subscribers. Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk was founded in 1884 and is headquartered in Bandung, Indonesia.

Advisors' Opinion:

• [By GuruFocus]

  Telekomunikasi Indonesia (Persero) Tbk (TLK) Reached the 52-Week Low of $34.63

  The prices of Telekomunikasi Indonesia (Persero) Tbk (TLK) shares have declined to close to the 52-week low of $34.63, which is 33.3% off the 52-week high of $50.61. Telekomunikasi Indonesia (Persero) Tbk is owned by five Gurus we are tracking. Among them, two have added to their positions during the past quarter. Two reduced their positions.

Sunglasses-Wearing Bill Gross Says He’s a ‘Cool Dude,’ Forecasts 3%-5% Return

Bill Gross strode onto the stage at the Morningstar Investment Conference Wednesday wearing aviator sunglasses.

“When you’re 70 years old, you need props,” he told the audience in Chicago, before gazing at his own image on the massive screens flanking the stage and pronouncing himself “one cool dude.”

Gross, co-founder and chief investment officer of PIMCO, then raised the issue of the lambasting he has received in the press this year by recalling the tale of The Manchurian Candidate — the movie in which North Korean captors brainwash American soldiers into repeating endlessly their admiration for a heretofore disliked U.S. officer whenever they saw a red queen playing card. He jokingly said he was inviting reporters to a poker game at PIMCO, where he would produce a red queen and have them repeat “Bill Gross is the kindest, warmest, gentlest man…”

Tongue-in-cheek remonstrations of the press aside, Gross then launched into a defense of his Total Return bond fund, which he compared to a Mercedes “that delivers the ride you expect”: better returns than the index with less risk. And belying the perceptions of his negative press, that’s just what PTTRX has delivered this year, he said: higher returns than the index, before fees.

PIMCO can deliver that performance, he said, because of its belief in “template investing,” a belief shared by other great investors like GMO’s Jeremy Grantham and Berkshire’s Warren Buffett. Saying he might be “handing over the keys” to the PIMCO Mercedes, he said his template starts with a “world class, bottom-up research team” that helps build a portfolio that includes ‘Bonds Plus,’ which he called “Treasuries, but which are really corporate bonds in disguise” using interest rate futures and swaps to complement 6- to 12-month floating rate bonds.

The second part of the portfolio is bonds with intermediate maturities, including five-year Treasuries, “which have essentially delivered 30-year Treasury” returns that “roll down a positive yield curve, which is the essence of capitalism. The secret is patience.”

The third part of the portfolio template is to “employ volatility,” such as can be gained through buying 30-year mortgages despite their greater risk: “We’re willing to sleep less and perform more.”

Taken together, that template consistently adds “75 basis points in structural alpha each year.”

Moving onto the markets, Gross spent some time discussing the “New Neutral,” the PIMCO-coined term describing what the real policy rate is on fed funds by the Federal Reserve, which was the substance of his last monthly investment commentary. Since 1981, he said, “real policy rates have come down, down and now are negative.” The real rate has a “critical influence” on both stocks and bonds, but a real rate of 1% at the time of the financial crisis “broke the financial markets; cracked the economy.” However, at a 0% real rate, “bonds make sense” and “volatility is dampened.”

Now that the real rate is likely to be in negative territory, Gross says “we expect 3% to 4% returns from bonds; 4% to 5% from stocks,” and PIMCO expects “we’ll have a market where you can take measured risks.” Where will rates go in the future? Gross expects the U.K. will be “first to cut the real rate.”

He closed by thanking the audience for listening to his “late-in-life saga,” before proclaiming that “PIMCO is thriving in 2014. You’d be lucky to buy it; I have.”

---

Check out PIMCO’s Gross Cruises Into ‘New Neutral’ on ThinkAdvisor.

Time To Write Covered Call Options On BHP Billiton?

Related BHP Events Scheduled for Week of Jun. 16th to Jun. 20th Top 4 NYSE Stocks In The Industrial Metals & Minerals Industry With The Highest Revenue

Blue chip stocks in the natural resources sector, like BP (NYSE: BP) and Rio Tinto (NYSE: RIO), are ideal for writing covered call options.

That's when the owner of the stock sells options, but not the obligation, to buy it at a higher price in the future. In the natural resources sector, BHP Billiton (NYSE: BHP) is a solid choice for writing covered call options for a variety of factors.

There are many ways to profit from writing covered call options, but there are three primary methods:

The first is through the actual sale of the option. That is cash in the bank (or an addition to the left side of the brokerage account).

Related: Small Cap Food Stocks May Benefit From The 'Food Frenzy'

Next is from the collection of dividends during the period of the option. As BHP Billiton has a dividend yield of more than 3.5 percent, that is a nice check to get in the mail every three months (or added to the left side of the brokerage account).

The last is from the higher price of the stock if the option is exercised.

Options expert Dr. Joseph Louro, head of Investview (OTC: INVU), an investor education and financial technology entity, says that more than 70 percent of options are never exercised. And that makes selling covered call options on a company like BHP Billiton even more rewarding and even less risky.

BHP Billiton is up more than 10 percent for the last year of market action. However, it has been basically flat for 2014. BHP Billiton is also down for the last week and month of market action. Those are very appealing conditions for selling covered call options.

Posted-In: covered call covered call options Joseph Louro metals and mining mining natural resourcesEducation Long Ideas Dividends Options Markets Trading Ideas General Best of Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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How Congress could mess with your commute

Every day, 210 million trips are made across deficient bridges in the largest metropolitan areas, according to civil engineers. Unless Congress acts, federal funding for bridge and road repair will soon run short. NEW YORK (CNNMoney) Gridlock on Capitol Hill may mean more gridlock for you over the next year if you have to navigate potholes, congested roads, rundown rails or bad bridges.

That's because the federal Highway Trust Fund, which helps finance surface transportation projects, will run short of funds as soon as August. If Congress doesn't act, the Department of Transportation might start to delay payments to states.

That could result in "an immediate slowdown in highway construction this summer," according to a report from the Committee for a Responsible Federal Budget.

Lawmakers' herky-jerky style of financing transportation projects is nothing new.

The Highway Fund, which gets its money primarily from the federal gas tax, has been spending more than it takes in for the past decade. So Congress has periodically transferred money from general tax revenue into the fund -- a total of $54 billion so far.

It's expected to spend about $15 billion more than it takes in over the next year. And the Congressional Budget Office projects there will be a $167 billion shortfall over the next decade.

There's bipartisan support for improving transportation infrastructure since it's good for the economy. Better roads and rails mean less wasted time, safer travels and efficiency for trucks and freight trains delivering vital goods across the country.

And infrastructure improvement projects can mean hundreds of thousands of jobs.

So what's the hold up?

Lawmakers don't yet agree on how much money is needed or where to find it.

Lots of ideas have been thrown around. Among them: stopping mail delivery on Saturdays, boosting user fees and enticing big companies to bring back their foreign profits.

This week, two senators -- Chris Murphy, a Connecticut Democrat, and Bob Corker, a Tennessee Republican -- proposed raising the federal gas tax, which has been at the same level since 1993.

But neither Murphy nor Corker are up for re-election until 2018, said Greg Valliere, chief political strategist of Potomac Research Group, in a note Thursday. "If you happen to be up for re-election this fall, there's a very good chance [a gas tax increase] looks like a bad idea."

Indeed, there doesn't appear to be sufficient support for any of the proposals.

"The most likely outcome will be a short-term funding bill," Valliere said. "B! ut passage of even that modest fix may not come before the August break, jeopardizing many state highway projects."

Are your travels stymied by potholes, rundown transit systems, congested roads, or bridges needing repair? Send us a photo via twitpic or Instagram at #mysuckycommute. Or e-mail them to jeanne.sahadi@turner.com. We might include them in an upcoming CNNMoney gallery.

Top Sliver Stocks To Buy For 2015

Small cap �biopharmaceutical stock Receptos Inc (NASDAQ: RCPT) was one of the many hot biotech IPOs of last year and its also up 72.4% since the start of this year alone, meaning its time to take a closer look at this small cap stock with potential treatments for Relapsing Multiple Sclerosis (RMS) and Inflammatory Bowel Disease (IBD) along with the performance of biotech ETF benchmarks like the iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB) and SPDR S&P Biotech ETF (NYSEARCA: XBI).

What is Receptos Inc?

Receptos Inc is a small cap�biopharmaceutical company focused on discovering, developing and commercializing innovative therapeutics in immune disease.�The company�� lead asset, RPC1063, is being developed as an oral therapy for Relapsing Multiple Sclerosis (RMS) and Inflammatory Bowel Disease (IBD) with the goal of demonstrating clinically meaningful differentiation versus other available treatments, including a favorable safety profile. Receptos Inc is also developing RPC4046, an anti-interleukin-13 (IL-13) antibody for an allergic/immune-mediated orphan disease, eosinophilic esophagitis (EoE).

Top Sliver Stocks To Buy For 2015: TD Ameritrade Holding Corporation(AMTD)

TD Ameritrade Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The company?s offerings include TD Ameritrade for self-directed retail investors; TD Ameritrade Institutional, which provides brokerage and custody services to independent RIAs and their clients; thinkorswim that offers a suite of trading platforms serving self-directed and institutional traders, and money managers; and Investools, which provides investor education products and services for stock, option, foreign exchange, futures, mutual fund, and fixed-income investors. Its offerings also include Amerivest, an online advisory service that develops portfolios of exchange-traded funds to enable long-term investors pursue their financial goals; and TD Ameritrade Corporate Services, which provides self-directed brokerage services to employees and executives of corporations. In addition, the company offers various products and services, such as common and preferred stocks; exchange-traded funds; a range of option trades, including complex, multi-leg option strategies; futures trades in various commodities, stock indices, and currencies; and foreign exchange products. Further, it provides mutual funds; treasury, corporate, government agency, and municipal bonds; mortgage-backed securities and certificates of deposit; new issue securities; margin lending; and cash management services. Additionally, the company offers trustee, custodial, and other trust-related services to retirement plans; and cash sweep and deposit account products through third-party relationships. It provides its products and services through the Internet, network of retail branches, mobile trading applications, and interactive voice response and registered representatives via telephone. The company was founded in 1971 and is headquart ered in Omaha, Nebraska.

Advisors' Opinion:

• [By Ben Levisohn]

  Shares of E*Trade Financial have fallen 3.1% to $21.69 at 3:05 p.m.–and it’s not the only online broker getting hit today. Charles Schwab (SCHW) has declined 2.1% to $26.29, while TD Ameritrade (AMTD) has dropped 2.5% to $31.66 despite getting an upgrade from Bernstein Research. Interactive Brokers (IBKR), however, has gained 0.3% to $23.77.

• [By Dan Caplinger]

  The carnage of the market meltdown
  E*TRADE's past has been pretty ugly over the past several years, as the brokerage industry has suffered from the shell-shocked reaction that investors had following the financial crisis. Even as stock markets advanced, many investors remained on the sidelines, and that caused problems for players throughout the industry. As you can see below, peers Schwab (NYSE: SCHW  ) and TD AMERITRADE (NYSE: AMTD  ) have both joined E*TRADE in lagging behind the performance of the broader market since mid-2009.

• [By Maureen Farrell]

  By early afternoon, TD Ameritrade (AMTD) said roughly 5% of its daily trading volume came from Twitter.

  That's much lower than the volume during Facebook's IPO. Even with the glitches, roughly 22% of TD Ameritrade's volume came from trading in Facebook stock when it debuted on May 18, 2012.

Top Sliver Stocks To Buy For 2015: Kelly Services Inc.(KELYA)

Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries worldwide. The company offers trained employees who work in word processing, data entry, and as administrative support staff; staff for contact centers, technical support hotlines, and telemarketing units; substitute teachers; support staff for seminars, sales, and trade shows; technicians for the technology, aerospace, and pharmaceutical industries; maintenance workers, material handlers, and assemblers; and temporary and full-time placement services, as well as direct-hire placement and vendor on-site management services. It also provides scientific and clinical research workforce solutions; chefs, porters, and hospitality representatives; manual workers to semi-skilled professionals in trade, non-trade, and operational positions; engineering professionals for various disciplines, such as aeronautical, chemical, civil/structural, electrical/instrumentation, environmen tal, industrial, mechanical, petroleum, pharmaceutical, quality, and telecommunications; and employees for creative services positions. In addition, the company offers professionals for corporate finance departments, accounting firms, and financial institutions; talent management solutions; healthcare specialists and professionals for hospitals, ambulatory care centers, HMOs, and other health insurance companies; information technology specialists; legal professionals, such as attorneys, paralegals, contract administrators, compliance specialists, and legal administrators; and mid- to senior-level search and selection services, as well as consulting services. Further, it provides recruitment process and contingent workforce outsourcing, independent contractor solutions, payroll and business process outsourcing, career transition and organizational effectiveness, and executive search services. The company was founded in 1946 and is headquartered in Troy, Michigan.

Advisors' Opinion:

• [By James E. Brumley]

  Look out Kelly Services, Inc. (NASDAQ:KELYA), and step aside ManpowerGroup Inc. (NYSE:MAN). A young company called Staffing 360 Solutions Inc. (OTCBB:STAF) is coming up fast in your rear-view mirror, and is poised to dominate the fastest growing arena of the temporary staffing world.

• [By Dan Burrows]

  Staffing stocks like Manpower Group (MAN), Robert Half International (RHI) and Kelly Services (KELYA) have put up market-beating to market-crushing gains over the last year, boosted by accelerating strength in the job market.

Top 10 Railroad Companies To Invest In Right Now: Supertex Inc.(SUPX)

Supertex, Inc., together with its subsidiary, Supertex Limited, designs, develops, manufactures, and markets high voltage analog and mixed signal integrated circuits (IC) primarily in Asia, the United States, China, and Europe. The company offers high voltage analog multiplexer switches, pulsers, high-speed MOSFET drivers, and discrete high voltage MOSFETs and arrays for the medical electronics market. It also provides LED driver products, including linear regulators and switching regulators for general lighting in automotive, industrial, and consumer applications; and for backlighting in LCD TVs, monitors, and laptop screens. In addition, the company offers electroluminescent lamps for backlighting hand-held instruments, such as cell phone keypads, watches, monochrome flat screens, and MP3 players; and driver ICs for driving non-impact printers and plotters. Further, it provides high voltage amplifier ICs to drive optical micro-electro-mechanical systems (MEMS) for use in optical switching applications in the telecommunications market; high voltage electronic switch ICs for use in telephones; high voltage ICs for use as ring generators; and protection ICs for line cards. Additionally, the company offers ICs and DMOS devices primarily for various industrial applications. It markets and sells its products through direct sales personnel, independent sales representatives, and distributors primarily to original equipment manufacturers of electronic products. The company was founded in 1975 and is headquartered in Sunnyvale, California.

Advisors' Opinion:

• [By Lauren Pollock]

  Among the companies with shares expected to actively trade in Monday’s session are AutoNavi Holdings Ltd.(AMAP), Dick's Sporting Goods Inc.(DKS) and Supertex Inc.(SUPX)

Top Sliver Stocks To Buy For 2015: Altisource Residential Corp (RESI)

Altisource Residential Corporation is a development-stage company engaged in the acquisition and ownership of single-family rental assets. The Company�� primary sourcing strategy to acquire these assets includes purchase of sub-performing and non-performing mortgages, as well as single-family homes at or following the foreclosure sale (REO Properties (REO)).

The Company intends to pursue opportunities to acquire its single-family rental assets throughout the United States. The Company is managed by Altisource Asset Management Corporation (AAMC). On December 21, 2012, Altisource Residential Corporation�� spin-off from Altisource Portfolio Solutions S.A. (Altisource) was completed.

Advisors' Opinion:

• [By Amanda Alix]

  For Wall Street types, single-family foreclosures can be bought cheaply and in bulk, then fixed up and rented. Companies like the Blackstone Group (NYSE: BX  ) and Colony Financial (NYSE: CLNY  ) have been very active in this market, with the former purchasing 16,000 homes just last year, and the latter ramping up its own portfolio to approximately 7,000. This new industry has also spawned fresh entrants from the REIT field, Silver Bay Realty (NYSE: SBY  ) and Altisource Residential, (NYSE: RESI  ) two trusts that were spun off earlier this year from parent companies Two Harbors Investment (NYSE: TWO  ) and Altisource Portfolio Solutions (NASDAQ: ASPS  ) , specifically to take advantage of the boom in the foreclosure-to-rental market.

• [By Mark Holder]

  Altisource Residential (NYSE: RESI  ) (NYSE: RESI  ) (NYSE: RESI  ) purchases distressed mortgage loan portfolios with a strategy to work with borrowers to modify and refinance loans to either keep them in their homes or convert the unmodified loans into renovated rental properties.

Top Sliver Stocks To Buy For 2015: Emerald Oil Inc (EOX)

Emerald Oil, Inc. (Emerald) incorporated on May 31, 2011, is an independent oil and natural gas exploration and production company. The Company focuses on developing oil wells in the Williston Basin of North Dakota and Montana primarily targeting the Bakken and three forks shale oil formations. Emerald controls approximately 35,000 net acres in the Williston Basin. In February 2014, Emerald Oil Inc acquired core Bakken and Three Forks producing properties and undeveloped leasehold in McKenzie and Williams Counties, North Dakota.

Emerald holds positions in the Rocky Mountain oil and natural gas plays. It has approximately 14,500 net acres in the Sand Wash Basin in northwest Colorado prospective for oil in the Niobrara formation. It has approximately 33,500 net acres in central Montana prospective for oil in the Heath formation. The Company also has approximately 72,800 net acres in the Tiger Ridge Field located in Blaine, Hill, and Chouteau Counties, Montana, prospective for natural gas, and another approximate 1,700 net acres in the Denver-Julesburg (DJ) Basin in Weld County, Colorado, prospective for oil in the Niobrara formation.

Advisors' Opinion:

• [By John Udovich]

  Small cap Triangle Petroleum Corporation (NYSEMKT: TPLM), just like its peers Emerald Oil Inc (NYSEMKT: EOX) and Kodiak Oil & Gas Corp (NYSE: KOG), is focused on the Williston Basin�� Bakken and Three Forks formations and the company is scheduled to release second quarter fiscal year 2014 financial results after the close of trading�next Monday.�And the last time earnings were reported, shares jumped around 10% plus management gave some rosy commentary for investors. With that in mind, should investors in Triangle Petroleum Corporation be ready for another earnings report that excites the bulls?

Top Sliver Stocks To Buy For 2015: TTM Technologies Inc.(TTMI)

TTM Technologies, Inc., together with its subsidiaries, provides printed circuit board (PCB) products and backplane assemblies worldwide. Its PCB products include conventional, high density interconnect, flexible, and rigid-flex PCBs, as well as backplane assemblies and IC substrates. The company also offers various services, such as design for manufacturability support during new product introduction stages, PCB layout design, simulation and testing services, quick turnaround production, and drilling and routing services. Its customers include original equipment manufacturers and electronic manufacturing service companies that primarily serve the networking/communications, aerospace/defense, high-end computing, cell phone, and medical/industrial/instrumentation end markets of the electronics industry. TTM Technologies, Inc. was founded in 1978 and is headquartered in Santa Ana, California.

Advisors' Opinion:

• [By Brian Pacampara]

  What: Shares of printed circuit board specialist TTM Technologies (NASDAQ: TTMI  ) soared 17% today after its quarterly results topped Wall Street expectations.

Top Sliver Stocks To Buy For 2015: Spreadtrum Communications Inc.(SPRD)

Spreadtrum Communications, Inc., through its subsidiaries, operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. It offers a portfolio of integrated baseband processor solutions that support a range of wireless communications standards, including global system for mobile communication (GSM), general packet radio service (GPRS), enhanced data rates for GSM evolution (EDGE), time division synchronous code division multiple access (TD-SCDMA), and high speed packet access (HSPA), as well as offer an array of multimedia capabilities, such as MP3 digital audio playback, touch screen, JAVA acceleration, digital camera support, motion JPEG, MPEG4, AVS and H.264 digital video playback, and 64-channel polyphonic ringtone playback. The company also provides single-chip CMOS multi-mode RF transceivers that perform across various standards covering GSM/GP RS, EDGE, wideband code division multiple access, TD-SCDMA, and high speed uplink/downlink packet access. In addition, it designs, develops, and markets a CMMB-based channel demodulator and audio/video decoder processor solution for the mobile television market. The company sells its products directly, as well as through distributors to brand manufacturers, independent design houses, and original design manufacturers primarily in China, Hong Kong, and Macau. Spreadtrum Communications, Inc. was founded in 2001 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Brian Pacampara]

  What: Shares of Chinese smartphone chip maker Spreadtrum Communications (NASDAQ: SPRD  ) surged 17% today after Tsinghua University, through its subsidiary Tsinghua Unigroup, offered to acquire it for $1.4 billion.

Top Sliver Stocks To Buy For 2015: Global Digital Creations Holdings Ltd (GDC)

Global Digital Creations Holdings Limited is an investment holding company. Through its subsidiaries, the Company operates in three segments: computer graphics (CG) and production segment, which includes CG creation, production and exhibition of motion pictures and production of television series and movies, as well as property rental income; CG training courses segment, engaged in the provision of CG and animation training, and cultural park segment, engaged in the media entertainment and related commercial property development. The Company�� subsidiaries include GDC Holdings Limited, GDC Asset Management Limited, GDC China Limited, GDC Digital Cinema Network Limited, GDC Digital Cinema Network Limited, GDC International Limited and GDC Management Services Limited, among others. On September 6, 2011, it completed the disposal of interests in GDC Technology Limited and GDC Digital Cinema Network Limited. Advisors' Opinion:

• [By Barel Karsan]

  If you follow Genesis Land (GDC), your head may be spinning by now. It's almost every day now that the current board and the activists trying to take it over are claiming some sort of injustice permeated by the other side. (To watch this battle in real-time, sign up for filing notifications for GDC here.) But surely, behind all the "Our directors are superior to yours" puffery, there are some differences in how each group would run the company differently.