Focuses on dividend and dividend growth stocks.
Some big picture blather, plus buys in PLOW and NXPI and an Altius update
Dividend Investor – Morningstar
I started to subscribe to the Dividend Investor newsletter in November 2007. At the time, I had been a subscriber to the Motley Fool Stock Advisor for a year, but as I had continued to do more research, I had decided that I wanted to shift my focus to dividend investing. I had enjoyed the Morningstar site in general before for their free content so I thought I would give the Dividend Investor newsletter a try.
Dividend Investor is one of a couple of newsletters that Morningstar offers and is edited by Josh Peters, one of their staff members. I believe it currently retails for around $149 for a year (though don’t quote me on that), but was $99 when I signed up for it (guess newsletters aren’t affected by the general deflationary trend in the economy!). The newsletter has two portfolios (Dividend Bulder and Dividend Harvest). The Dividend Builder focuses on lower yielding stocks that tend to grow their dividends over time, while the Harvest has higher yielding stocks with lower growth rates (generally yields are 8% or higher). The two portfolios combined probably have about 30 or so stocks with the Builder having a slightly higher number of stocks.
The newsletter is run as a real-money portfolio so new additions are only announced either when a stock is sold or enough money has accumulated via dividends to make a new purchase. There isn’t a lot of turnover as Josh tends to stick with a stock as long as the dividends continue to come in.
However, this “buy and hold” philosophy has led to some terrible picks over the past year or so. Now, granted, I did start to subscribe to this newsletter during the worst bear market of the last 60 years, so I plan to give the service sometime to play out and let the dividend compounding strategy work. When I first started to subscribe, Josh did have a high percentage (about 30%) in financials. Now, I suppose that over the past couple of decades, building a dividend strategy based partly on financials would have worked out okay. But this caused some serious pain during the last year. Josh has subsequently lessend his exposure to the financial sector by selling a number of his banks (BAC, LYG, etc). Also, he made some other picks that got killed such as over-leveraged REITs and a couple of specialty financial companies (go look at some charts for ALD and MMA.PK).
Dividend Investor’s Harvest portfolio has a number of MLPs in it, so if someone is interested in investing in these, I would recommend that they understand the intricacies and tax implications. A MLP guide is given out as part of the subscription which does a good job of explaining how MLPs function.
Each newsletter gives some updates on the Builder and Harvest portfolio, along with general market commentary, and some expanded reviews of companies already in the portfolio or companies Josh is considering adding. A watch list of future possible purchases is listed in each issue for some additional investment ideas. Also, Morningstar stock ratings (the one to five star system and economic moats) are included for each stock mentioned in the newsletter. These ratings are normally premium content that you can access via an additional subscription at Morningstar. Weekly Friday updates also go out via e-mail.
Overall, I like Morningstar with the free content it provides and also their approach to using intrinsic analysis, economic moats, and margins of safety. As previously stated, I probably started this subscription at the worst possible time so I plan to continue for a while. At the very least, it does provide some good ideas for high quality dividend paying companies (amongst some other less than great recs), which should provide a nice starting point for some future research. Overall, the two portfolios lost less than the S&P 500 last year, so you still would have come out better than buying an index fund. Hopefully, this newsletters’ picks will provide a consistent dividend stream over the long haul and some of the problems that plagued it during the last year won’t be repeated.
I have been following Josh for several years now and trust his pics. He had a rough time during the Stock decline 2009. He was heavily invested in Bank Stocks and other financial stocks. Since then he has done well with conservative investments that generally do well. I would strongly recommend his service.
The website is attractive and easy to navigate. Some of the data is not current.
My biggest complaint is that when I cancelled my subscription via the prescribed method, they never cancelled it and continued to charge my credit card. Repeated phone calls and emails did not deter them. I finally contacted VISA – who advised me to get a new credit card number (which I did).
This is the best investment publication I have ever subscribed to. Josh Peters is always interesting to read. He is also very consistent in sticking to his theme of dividend paying stocks with 1) likelihood of increasing dividends; 2) potential for decent capital gains.
One of the things I like best about Josh is that he is unassuming. That is very refreshing as far as industry newsletters go. Many of the others come across like hucksters, making outrageous promises and playing up only their wild successes and never their failures.
Josh will never tell you about a “sure thing” or foolproof investment. He does not swing for the fences, although he’ll take a home run if one comes along. He will always admit that he’s in a constant learning process, evaluating his failures as well as successes.
I am pleased with the stock selections I have made based on Josh’s advice. I believe that his investment philosophy will resonate with me for a lifetime.
The Morningstar Dividend Investor by Josh Peters is an ideal income newsletter in many ways. It appeals to me because it has no hype, the portfolios are real money, and all buys and sells are thoroughly discussed. I like the conservative and consistent philosophy demonstrated throughout. Each issue is full of information about the performance and prospects of the two portfolios, as well as analysis of prospective picks and warnings about sectors to be wary of. I especially like the estimates of fair value and buy prices for each stock which are constantly updated, and the weekly e-mail updates that supplement the monthly newsletter. In my opinion, this letter is far superior to the Motley Fool’s Income Investor and the 12% letter, which are the other income letters that I have read.