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Mature Company Stocks Are Not Bonds

Listen on: iTunes | Google Podcasts | Online Like many professional investors, I love companies that pay dividends. Dividends bring tangible and intangible benefits: Over the last hundred years, half of total stock returns came from dividends. In a world where earnings often represent the creative output of CFOs’ imaginations, dividends are paid out of cash flows, and thus are […]

Exxon Mobil Think Again

General Electric’s collapse should have served as a reminder that buying a company based solely on past reputation and dividend yield is a dangerous endeavor. GE is also a great example that dividends are not paid out of earnings, especially massaged-to-death non-GAAP earnings, but from free cash flows. GE’s non-GAAP earnings were double its dividend payment. This brings us to another American icon […]

Exxon Apostasy Continued…

A very interesting cover story article in BusinessWeek about Exxon Mobil (XOM).  I am usually skeptical of cover story articles, especially from BusinessWeek as in the past they’ve been contrarian indicators. This time they are onto something (ok, that is maybe because I agree with them). As I’ve written in the past, Exxon is a […]

Exxon Apostasy

A basic property of religion is that the believer takes a leap of faith: to believe without expecting proof. Often you find this characteristic of religion in other, more unexpected places–like the stock market. It takes a while for a company to develop a “religious” following: Only a few high-quality, well-respected companies with long track […]