After U.S. Bancorp’s recent dividend cut, Wells Fargo (WFC: 27.87 -0.45 -1.59%) was the last major financial dividend payer left standing … until today. The company said it is slashing its payment by 85% from $0.34 to $0.05 a share. All told, the company expects to save $5 billion a year.
Wells Fargo, as you might know, has been one of Warren Buffett’s darling stocks, and one of the stronger banks out there (relative term these days, for sure). So this really can be viewed as the death knell for financial dividends.
Then again, there are some off-the-radar financials with (what appear to be) secure payments. If you’re a Dividend Superstars subscriber, you should have one good example in your portfolio right now.
As I’ve been pointing out in Money & Markets, there are also plenty of other places to find dividends even in this tough market. I’m not going to sit here and tell you that anything is certain right now. It’s not. The WFC news is just one more reminder of that.
But I steadfastly believe a diversified approach is remains the best strategy no matter what. That means a list of quality dividend stocks, select bonds, and a cash cushion in ultra-safe investments.
Nilus
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{ 6 comments… read them below or add one }
Hi Nilus:
I just subscribed to Dividend Superstars. I made a list of all of the stocks you recommended. When my income tax returns arrive, if they ever do, I plan on investing some of that money in your recommendations. Since I am starting off over 1 1/2 years behind the curve, could you give me the recommended percentage of each stock invested so I can scale my purchases?
Thanks.
Sharleen
I was in Wells Fargo twice in 2006 when they were having investment specialists or
mortgage specialists promoting information on B mortgages - speculative ventures for
Wells Bank or Banc that charged an interest premium to protect the bank(or banc)
I do not know for sure if these were subprime, but they sound like it.
Why then, Wells reputation for not being exposed to subprime? They appear to at
least have exposure in the CDS problem. The CDS exposure in US financial institutions
has been estimated to be as much as $ 62 trillion of which AIG and the bankrupt
Lehman were huge offenders as well as CITI
Hi, Sharleen. Thanks for subscribing! Every issue contains a “what to do now” column in the portfolio table. The number of shares are based on a model portfolio of $100,000. So to determine what percentage each should be in your portfolio, divide the total value you have to invest by $100K. That number becomes your multiplier for each recommendation. For example, if you had $10K to invest … you would have to multiply each share recommednation by 0.1 (divide by 10). Thus, a recommendation to buy 100 shares of XYZ in the model portfolio would mean you buy 10 shares.
If you had $500K to invest, you’d have to multiply each recommendation by 5 in the same way.
Make sense?
Also note that if you don’t feel you have enough money to cover all recommendations adequately, that’s okay too. Start with some of the core income positions, and maybe one or two from the total return section.
Thanks Nilus!
I didn’t know what your starting amount was.
Just got my Fed. tax return and paid off my car!! Now I can move on to more positive things…still waiting for the CA return which they are reluctant to give!
Sharleen
Hi Nilus,
I recently subscribed to your dividend superstars. Your first e-mail issue was accidently lost on my computer before I had a chance to read it. Can I get a replacement. Do you intend
mailing printed copies of “Superstars” the same as Money and Markets?
Nilus Mattive Reply:
March 12th, 2009 at 5:06 PM
Hi, David. Someone from our customer service group should be in touch with you shortly. Thanks for subscribing!