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Thread: Income Investing on Margin

  1. Default Income Investing on Margin

    I was pondering some yields that I witnessed earlier today on my ride home from work and the dilema I face for being impetuous and buying into the sell-off and the fact I am now 90% invested. I'd love to have a piece of some of the following yields:

    FRO - 38%

    NAT - 26%

    PGH - 31%

    PWE - 27%

    FDG - 13.5%

    PFE - 8.5%

    ...and the list goes on.

    There are hosts of stocks sporting extremely high yields and, for me, not enough money to buy them all. My first question is do you believe the dividends are safe in the cases mentioned above? Second, would it be prudent to buy these on margin to earn the income?

  2. Default

    I have been looking at all the fat yields as well. ACAS has been a big winner for me but for short trades. I feel that most of these companies will either cut the dividend next quarter or the share price will increase enough to make the yield shrink. Either way it is not worth waiting for the dividend. If they cut then you are back to nothing, and if the stock does run up then you just take the capital gain. But for that short term trade using the margin would be fine. Just make sure you stay on track and don't hold too long. IKR is worth looking at if you want yield...not big like the ones you mentioned, but should be secure.

  3. Default

    My favorite dividend play is WWE. It's yielding over 9.4% now. YTD the stock price is up a few cents. They have a great balance sheet. The only negative on the stock is the last 2 qtrs their spending has gotten a little too high. TV ratings are up. I guess people are staying home, getting drunk and watching wrestlers hit each other with chairs.

  4. Default

    Anyone have historical evidence that portends a dividend cut in the shippers? That is the main obstacle in my mind keeping me from pulling the trigger. Well, that and the fear of being on margin in this environment.

  5. Default

    It looks like on Dec 13th, Mar 13th, & Jul 11th they paid a dividend of 87 cents.

    I'm not familiar with this company but based on a cursory glance at their profile it looks intriguing. It seems to be classified as a REIT. I wonder how long they can afford to pay out this massive yield.

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