Published on Intelligent Income
Simply Safe Dividends
September 2021 1
September 2021
Published on 9/3/21
Intelligent Income
Quality dividend ideas for safe income and long-term growth
Monthly Recap
The S&P 500 logged another strong gain last month, increasing 3% in August to bring its year-to-date return to 21%. The U.S. stock market benchmark has enjoyed an effortless upward glide, increasing for seven straight months.
The S&P 500 has also not seen as much as a 5% pullback since October. That is only the fifth time in 20 years the market has gone 10-plus months without falling at least 5%, according to Ally Invest. The market has learned to live with the pandemic.
Corporate profits have lifted investor sentiment, too. With Q2 earnings in the books, nearly 90% of S&P 500 companies reported actual earnings above analyst estimates. And 67 companies ? the most since 2006 ? provided positive earnings guidance, per FactSet.
The spread of the Delta variant of Covid-19 and inflationary cost pressures have yet to cause alarm in the market. This calm is driven in part by expectations that government and central bank intervention will continue to backstop the economic recovery as policy makers prefer to err on the side of caution.
This conservative stance was on display in late August when investors focused on a high-profile speech by the Federal Reserve's Chairman Jerome Powell. The Fed's preferred inflation indicator rose 3.6% year-over-year in July ? its highest reading since 1991 and above the Fed's 2% average inflation target. Investors wondered
In This Issue
Portfolio Updates
? Performance........................4 ? Top 20 Stocks......................7
Altria raises dividend but is still under review for sale ? Conservative Retirees........14 Pfizer continues rallying; Verizon raised its dividend ? Long-term Growth............22 Broadridge, IFF hike dividends; Fidelity Nat'l falls
Idea Generation
? Safe Dividends..................29 ? Growth Dividends............30 ? High Yield Stocks.............31 ? Dividend Increases...........32 ? Ex-Dividend Dates............33
Resources
? Our Best Dividend Articles ? Dividend Safety Scores
Quote of the Month
"Never think that lack of variability is stability. Don't confuse lack of volatility with stability, ever." ? Nassim Taleb
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more. COPYRIGHT ? 2021 Simply Safe Dividends LLC
Simply Safe Dividends
September 2021 - 2 -
how much tolerance the Fed would have in continuing its monthly bond purchases and zerointerest-rate policy if high inflation persists.
Powell performed his usual verbal gymnastics routine, avoiding giving specific guidance while insisting inflation was likely to reverse on its own as pandemic-induced supply chain disruptions and inventory shortages work themselves out.
As expected, he also indicated that the Fed could begin to reduce, or taper, its pace of bond purchases as soon as this fall. The Fed's purchases of Treasury bonds and mortgage-backed securities help the economy by lowering long-term interest rates, making borrowing cheaper.
But Powell made it clear that tapering should not be taken as a signal regarding the timing of raising short-term interest rates, which he said face "a different and substantially more stringent test" with employment remaining below pre-pandemic levels.
In other words, not much has changed in recent months from a policy perspective despite the ongoing economic recovery, soaring corporate profits, and the strengthening labor market.
With easy-money policies looking likely to continue for the next year or longer, the party continues for now. Especially for many growth stocks that have seen their valuations balloon in a low-yield environment; their relatively more distant cash flows make these stocks more sensitive to changes in the discount rate used to value those cash flows.
The biggest question on many investors' minds is whether interest rates will finally jump if high inflation persists, and the Fed is forced to act to reign it in.
We should get an answer to the inflation debate within the next year or so. With the S&P 500 trading at a forward P/E multiple of around 21 ? its highest level in roughly 20 years ? whether interest rates will remain low and supportive of equity valuations and the economy is a key topic.
But as baseball great Yogi Berra said, it's tough to make predictions, especially about the future. When Simply Safe Dividends started in 2015, concerns abounded that stocks were overvalued.
Here are some headlines you would have seen that year:
? MarketWatch: "The stock market is overvalued any way you look at it" ? Business Insider: "History Suggests Stocks are Overvalued" ? The New York Times: "Part of the Problem: Stocks Are Expensive" ? Washington Post: "Janet Yellen on why stocks might be overvalued"
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more. COPYRIGHT ? 2021 Simply Safe Dividends LLC
Simply Safe Dividends
September 2021 - 3 -
The S&P 500 has compounded by more than 15% per year since then, well above its long-term average annual return of around 10%. As we discussed last month, we don't try to forecast where the economy will head or what interest rates will do. The market is too complex.
Instead, we take a conservative, long-term view when evaluating a company's prospects and try to hold durable businesses that are likely to grow in value over the years ? regardless of fluctuations in interest rates or economic activity.
By focusing on time-tested companies that have long operating histories, our portfolios also have less exposure to the high-flying growth stocks that have seen their valuation multiples swell the most. Even the S&P 500's forward P/E ratio has risen nearly 20% above its 5-year average.
In contrast, roughly two-thirds of the holdings in our Top 20 and Conservative Retirees portfolios have P/E ratios that are in line with or below their 5-year averages.
Should the current market environment of complacency reverse, I believe our conservative bent and focus on companies with Safe or Very Safe Dividend Safety Scores positions us to generate more defensive performance while also keeping us on track to deliver higher dividends each year.
Thank you for your support of Simply Safe Dividends.
Sincerely,
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more. COPYRIGHT ? 2021 Simply Safe Dividends LLC
Simply Safe Dividends
September 2021 - 4 -
Portfolio Performance Here is each portfolio's total return performance in August, 2021 year-to-date (YTD), over the trailing 12-month period (1 Year) and annualized since inception. Returns for the S&P 500 and relevant dividend ETFs are provided for comparison purposes.
Additional performance information for the portfolios, including their dividend growth track records, can be found in each portfolio's section of this newsletter.
Top 20 Dividend Stocks Portfolio S&P 500 Index (SPY) Schwab U.S. Dividend Equity ETF (SCHD)
Annualized
Inception August
Date
2021
2021 YTD
1 Year
Since Inception
6/12/15
2.35% 2.98% 2.09%
16.45% 23.48% 21.53% 40.83% 22.84% 51.04%
12.63% 15.22% 14.96%
Conservative Retirees Portfolio
6/17/15
S&P 500 Index (SPY)
S&P 500 High Dividend Low Volatility ETF (SPHD)
1.92% 2.98% 1.48%
17.54% 24.11% 21.53% 40.83% 20.59% 35.37%
11.30% 15.21% 9.55%
Long-term Dividend Growth Portfolio S&P 500 Index (SPY) Vanguard Dividend Appreciation ETF (VIG)
6/9/15
0.92% 2.98% 1.67%
17.38% 26.51% 21.53% 40.83% 15.95% 26.49%
15.68% 15.34% 14.35%
The amount of risk taken to achieve a certain return is equally important. The Sharpe ratio measures risk-adjusted returns by comparing a fund's returns to a fund's volatility (i.e. standard deviation). Higher ratios are better, indicating higher expected return per unit of risk.
Since inception in 2015, our portfolios have delivered comparable or higher risk-adjusted returns versus their benchmarks. The lower volatility of our Top 20 and Conservative Retirees portfolios suggests they could perform relatively well during future market downturns, too.
Average Monthly Return Monthly Standard Deviation Annualized Sharpe Ratio
SPY ETF 1.27%
4.20%
1.03
Top 20 1.05% 3.43% 1.04
SCHD ETF 1.26%
4.24%
1.01
Retirees 0.95% 3.40% 0.95
SPHD ETF 0.86%
4.53%
0.64
LT Growth 1.30%
4.18%
1.06
VIG ETF 1.18%
3.71%
1.08
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more. COPYRIGHT ? 2021 Simply Safe Dividends LLC
Simply Safe Dividends
September 2021 - 5 -
Dividend Events Broadridge Financial (+11.3%), Altria (+4.7%), International Flavors & Fragrances (+2.6%), and Verizon (+2.0%) announced dividend increases.
Increases Cuts
Dividend Events Since Inception
Top 20 Retirees Growth
130
167
150
1
2
2
Each portfolio continues meeting its goal of generating higher dividend income every year:
Since inception, our portfolios have delivered average annual dividend growth between 8% and 11% and increased their income each year
Long-term Dividend Growth Top 20 Dividend Stocks Conservative Retirees
$4.0
$3.3
$4.3 $3.7
$2.2 $1.9 $1.9 $1.6
$4.9 $3.9 $2.5
$5.1 $4.2
$2.8
$5.5 $4.5
$3.0
$5.9 $4.8 $3.5
$0.8
2015*
2016
2017
2018
2019
2020 Current Run Rate
* Portfolios were created in June 2015 with $100,000 each; dividend income shown in thousands and excludes special dividends
Portfolio Actions No trades were made in August, and none are planned for September.
Top 20: no trades were made. Altria remains under review for potential sale as regulators up the pressure on its core business. We'd prefer to own a business that has more in its control and a clearer path to growth. Altria's recent dividend raise has no impact on our long-term outlook. See here for more information.
Conservative Retirees: no trades were made.
Long-term Dividend Growth: no trades were made.
This information is for general informational use only and is not personal investment advice. See the disclaimer on the last page for more. COPYRIGHT ? 2021 Simply Safe Dividends LLC
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- further information on profit distribution for holders of
- mergedfile shalimar paints
- 2021 investor day verizon
- preliminary pricing supplement
- optimized equity dividend strategy series 10
- stock market news 10 20 18
- value line select dividend income growth
- verizon communications vz
- 4q17 results presentation bbva
- date 22 june 2018 subject 29 june 2018 estimated
Related searches
- taxes on retirement income calculator
- intelligent quotes for women
- how to ask intelligent questions
- intelligent quotes that make you think
- intelligent words and their definitions
- intelligent words to use everyday
- net income on income statement
- published research paper on education
- self published authors on amazon
- tax on annual income calculator
- what goes on an income statement
- federal tax on pension income 2019