Market Wrap-Up for Sept.27 (DFS, MKC, V, MA, GS, MON, CVX, more)

As we head into the last two days of the third quarter, some investors were wondering when the usual quarter-end buying would finally hit, and today was the day, thanks in part to some optimism just the latest Spain bailout proposal could be the catalyst for an economic rebound. Everyone knows my feeling on how one bailout continues to lead to the next, and so on. Many of these plans are just about adding more debt in an effort to borrow one’s way to prosperity. When will we see results is anyone’s guess.

Shifting back to our market story here in the U.S., credit card issuer Discover Financial Services (DFS) gained nicely following the company’s earnings results. The gains also lead to rallies for other credit card-related plays such as Mastercard (MA) and Visa (V). The stock continues to hit new all-time highs, so today’s good news certainly helped attract money managers looking to pad their third quarter portfolios with winning ideas. On the flip side, spice maker McCormick & Co. (MKC) saw a bit of profit-taking following this morning’s earnings results.

Meanwhile, Wall Street analyst upgrades pushed other stocks higher. These names were led by Monsanto (MON) and Time Warner Cable (TWC). Other winners from today included Chevron (CVX), AvalonBay Communities (AVB), BHP Billiton (BHP), and Goldman Sachs (GS).

Protecting the Golden Goose

I recently read an analysis of this past weekend’s Eagles/Cardinals NFL football game in which the writer counted an astonishing 20 hits on Eagles quarterback Michael Vick (including five sacks). To put that number in perspective, most NFL quarterbacks are hit well under 10 times per game. In just this one game, Vick was hit by opposing players at a rate over three times higher than the league average.

Now let’s compare this dreadful stat to the great Miami Dolphins teams of the 1980′s. In a single 16-game season (1988), Dolphins quarterback Dan Marino was sacked only six times. I don’t have the exact stats available, but I’d venture to guess that Marino probably took less total hits in that entire season than Michael Vick did in a single game last weekend.

As a matter of fact, Dan Marino had many years where he was the least-sacked quarterback in the league. The Dolphins realized early on that any success the franchise would have would come courtesy of Dan Marino’s passing arm, and it was job #1 to make sure he was protected at all costs. Thus, the team built a phenomenal offensive line around Marino, ensuring the safety of their “Golden Goose.”

In that vein, I think we should all seek to identify the proverbial “golden goose” in our lives. Perhaps your job is to assist a key person that is closely linked to a company or business’s success. Or maybe you’re the golden goose yourself, and therefore need to build a team around you to fortify your current or future success. We may not conceptualize this idea early in our careers, when we have less personal responsibility (being single, without kids, living at home with parents, etc.). Once you get married, find your own place, and have children, however, the picture changes completely (or at least it should). All of a sudden, there could be a new sense of urgency about needing to get a particular job, or having to put out maximum effort to keep the job you simply can’t afford to lose.

For me, having kids really raised the stakes and made me realize I needed to put everything I had into my work. Not only did I want to provide my family with the best possible everyday living situation I could afford, even more importantly, I wanted to build the legacy I would eventually leave behind. My wife and I decided early in our marriage that she would stay home and take care of our children. That meant she would take up much of the duties on the home front, and allow me the bandwidth to focus on my career/business. My wife and I have not strayed from our initial pact, which has certainly helped me concentrate my efforts on generating as much income as possible.

Somewhere out there, everyone has their own “golden goose.” It’s our job to find and protect it, just like the Dolphins offensive line did for Dan Marino.

25 Years of Dividend-Increasing Stocks

We recently updated our list of dividend stocks that have been paying out dividends for 25 years or more. Be sure to check out the latest list of names here.

Dividends Really Matter

Financial blog recently took a look at the difference dividend payouts made in the overall return investors saw throughout the prior decades. Here are some of the highlights:

- The Nasdaq is down 28% since the end of 1999. Even the “blue chip” S&P 500 stocks are down 15% during that time frame…until you add back those “boring” dividends. With dividends included, the S&P 500′s 15% loss flips to a 6% gain.

- Without dividends, the S&P 500 index would have produced a loss for the 25 long years from August 1929 to August 1954. Then again, without dividends, the S&P 500 produced a 5% loss during the 13 years from September 1961 to September 1974. But with dividends included, the S&P’s loss became a 46% gain.

- Over the course of the last half-century, dividends have contributed more than half of the stock market’s total return — 56%, to be exact.

Of course, you can’t discuss the potency of dividend investing without making mention of how awesome compound returns are. I can’t stress enough the power of compound interest: you take a small amount of money and turn it into a large amount over time. Finding the right companies at the right price points which not only grow earnings, but also grow their dividend payouts as well!

New Watchlist Article Out Today

Be sure to check out our weekly Top 50 High-Yield Watchlist Names post that is out today, exclusively for Premium members. This list gives readers a good idea of what stocks we’re watching behind the scenes here for potential upgrades.

Go Beyond This Newsletter

We know many of you enjoy reading the daily newsletter, but remember that with our Premium service, the newsletter is just one small component of what we offer. Here are the “Big Three” benefits of our Premium service:

- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.

- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.

- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a “Dividend Capture” trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.

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Thanks for reading, and I’ll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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