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Wednesday, July 22, 2015

ASK THE READERS - Should I buy VZ, IBM, MMM?


We started this series back in November as a way to add some fun to our buying process. We plan to continue doing these Ask the Reader post once a month (except when funds are limited) and will be maintaining the stocks purchased in a separate portfolio just to see how they perform. 

The three stocks we have chosen are stocks that are currently at the top of our watch list and thus stocks we would be comfortable buying regardless of the outcome.  But we thought it would be fun to get our readers input and see if collectively, we can all beat the market with this interactive portfolio. :) 

Below is a chart below of our ASK THE READER purchases to date: 



For each ASK THE READER post, we will select 3-4 current stocks on our watch list that we feel are worth buying.  But to add some fun into our buying process, we have decided to put our faith in our fellow bloggers and readers once a month. 

Please spend a few minutes to vote for ONE stock from the companies listed below.  Tell us why you like the stock that you picked. 

Thanks in advance for your STOCK PICK!








STOCK #1 - Verizon Communication Inc (VZ)
  • Sector: Communications
  • Market Cap: 189.45 Billion
  • Dividend Yield: 4.73% 
  • Consecutive years of dividend increase: 10 Years
  • Paying Dividends Since: 1984 (31yrs)
  • Payout Ratio: 91.49%
  • P/E Ratio: 19.27






STOCK #2 - International Business Machine (IBM)
  • Sector: IT
  • Market Cap: 157.9 Billion
  • Dividend Yield: 3.19% 
  • Consecutive years of dividend increase: 19 Years
  • Paying Dividends Since: 1916 (99yrs)
  • Payout Ratio: 32.7%
  • P/E Ratio: 13.97


STOCK #3 - 3M Company (MMM)
  • Sector: Health Care
  • Market Cap: 98.5 Billion
  • Dividend Yield: 2.63% 
  • Consecutive years of dividend increase: 56 Years
  • Paying Dividends Since: 1916 (99yrs)
  • Payout Ratio: 51.8%
  • P/E Ratio: 20.58

For this months ASK THE READERS selection, we selected 3 large companies with proven track record for paying dividends. 
**LET US KNOW WHICH STOCK YOU WOULD PICK AND WHY**

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13 comments:

  1. Dividend for StartersJuly 23, 2015 at 2:22 AM

    Hey AFFJ,

    I'd definitely pick IBM here.

    VZ does not have enough growth. In fact, sorted by 3 year DGR, VZ is at place #52 out of my 55 companies on my watch list. The yield looks OK, but main competitor AT&T looks a lot better.

    IBM beats MMM in terms of payout ratio, P/E ratio and yield.

    Will be looking forward to what other readers would pick.

    Best wishes, DfS

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    1. A Frugal Family's JourneyJuly 23, 2015 at 12:21 PM

      DFS - not diving to far into the details of each company, they data sure makes IBM the most attractive value of the three. And I agree, VZ and a nice high yield but very little growth. It may still be the safer bet here though.

      We'll update everyone on Friday night or Saturday morning as to which one ends up being the readers pick for the month of July. Best Wishes. AFFJ

      Delete
  2. Div4sonJuly 23, 2015 at 5:35 AM

    I have both 3M and Verizon in my portfolio and IBM has been on my watch list for a while.
    VZ is good for the yield but growth is slow. MMM seems to be always expensive, over the long term you will catch up. Out of the three options, I would go for IBM due to its better valuation. However, it is a tech company so it needs to reinvent themselves periodically. I think IBM actually has been pretty good at doing this.
    D4s

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    1. A Frugal Family's JourneyJuly 23, 2015 at 12:25 PM

      IBM looks to be taking an early lead here among our readers. The data (P/E ratio, payout ratio, and history, combined with a decent yield just above 3%) sure supports IBM as one of the better values here.

      Thanks for stopping by and leaving your thought and vote. AFFJ

      Delete
  3. Roadmap2RetireJuly 23, 2015 at 7:54 AM

    I would NOT pick IBM...I think there is a lot wrong with the company - and things have to change significantly including some major changes in management/executive before things can get better.

    Either VZ and 3M are great...and as others have mentioned - you get the high yield with VZ but low growth. With 3M - you get great exposure in a conglomerate, but its a company that always demands a premium on the investment. Also, isnt 3M officially classified as Industrials sector?

    Looking forward to see which one you pick.
    R2R

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    1. A Frugal Family's JourneyJuly 23, 2015 at 12:28 PM

      Always appreciate responses from the other side of the coin. Definitely helps present the overall picture to everyone. As you mentioned, IBM certainly has a tough road ahead with their management but it certainly appears the dividends are safe at these levels. Plus, with a low payout ratio, it seems continued increase is likely. With that said, I still appreciate your perspective.

      Thanks for stopping by and leaving us with your thoughts and vote. AFFJ

      Delete
  4. DividendsJuly 23, 2015 at 2:00 PM

    Hello AFFJ,
    I'd have to vote for MMM, based upon the fact that now it is smack in the middle of F/V estimates of S&P and M*.

    I second what R2R had to say. As a fellow IT pro x3 decades, IBM has and will continue to die a slow death.

    VZ is a good pick, but I'd prefer AT&T with the DirecTV deal coming due.

    Good luck with what you decide!

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    Replies
    1. A Frugal Family's JourneyJuly 24, 2015 at 6:09 AM

      Dividends, it's interesting that you said IBM will die a slow death because it certainly feels like that is what's happened these past few years. I think they do have challenges ahead of them but I'm not sure I'm as low on IBM as you and R2R seem to be. A turnaround can happen if leadership changes. Apple is a prime example of that. Meanwhile, with such a low payout ratio, the dividend appeared relatively safe.

      With the above said, I still value your opinion and thank you for your input and vote. I will put you down for MMM.

      Thanks again, AFFJ

      Delete
  5. Adam - IWTRSJuly 24, 2015 at 5:37 AM

    VZ just had a crossover of the 50dma over the 200dma on the negative side. I know charts only mean so much, but there are many who put all there faith into it. Just something to consider.

    MMM is my choice. Took a hard hit recently and long term you really cant go wrong.

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    1. A Frugal Family's JourneyJuly 24, 2015 at 6:14 AM

      Adam, although I don't put too much weight on the charts, I do consider the charts to help me predict which way the stock might be headed. VZ chart and high payout ratio does concern me a bit.

      Thanks for your pick. We don't own MMM, so it would be a welcome choice for our family's dividend stock portfolio. AFFJ

      Delete
  6. A Frugal Family's JourneyJuly 24, 2015 at 6:18 AM

    Current tally is: IBM - 2; VZ - 1; MMM - 3. I logged in a vote for both VZ and MMM from Roadmap2Retire since he didn't leave a top pick. Please keep your votes coming, I was hoping to hear from a few more and hopefully have a clear winner. :) AFFJ

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  7. UnknownJuly 26, 2015 at 2:46 AM

    AFFJ, none of these is in my portfolio, but one I would really like to have at some point. Valution is a bit high "always", but on the other hand we are talking about well diversified industrial/technology giant with huge dividend increase streak.
    Yes, I would go for MMM.

    ReplyDelete
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    1. A Frugal Family's JourneyJuly 29, 2015 at 9:07 PM

      Thanks for stopping by and providing us with your vote. We ended up buying MMM, even at current rates. Your selections helps to further validate our decision to do so.

      Thanks again for stopping by and commenting. AFFJ

      Delete