3 Tips to Maximize the Returns of Your Dividend Portfolio

Here are three tips I use to maximize the returns of my dividend portfolio. You can adopt the tips to improve your returns.

saving, investing, and compounding

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The goal? To maximize returns while earning a growing dividend. Some investors think of dividends as a source of cash to pay their bills. That serves as a motivation for them to earn more dividends, until all bills are paid regularly. After which, they become financially independent.

That’s a fine way to think of dividend investing, but you can get to financial independence quicker. Here’s how. Read More

Is Express Scripts Priced at a Value?

Express Scripts Holding Company (NASDAQ:ESRX) has declined 12% year to date. So, it maybe a good time to see if it’s priced at a value.

Quality shares

Express Scripts has an investment-grade S&P credit rating of BBB+. Furthermore, its long-term earnings per share (EPS) growth has been wonderful. The company doesn’t pay a dividend, but it has been buying back its shares in recent quarters. It repurchased $1,132.5 million worth of shares in the third quarter.

Over time the pharmacy benefit manager has been consistently growing its profits, signified by its growing net income, earnings per share, and free cash flow, but it’d be even better if it can boost its revenues, which have stagnated at roughly $100 billion since 2013.

Although its EPS growth is expected to slow down to 8% next year (compared to this year’s estimated 16% growth), it’d still be pretty good growth.

Recent results

The following data compares the results of the first three quarters with that of the same period last year. Express Scripts generated revenues of $75,424 million, which was essentially flat compared to the previous year.

Yet, its gross profit and operating income were higher. Ultimately, the PBM managed to earn net income of $1,969 million, which was 15% higher. As a result, Express Scripts’s diluted EPS were $3.09, up 27%.

At the end of the quarter, the company had cash and cash equivalents of $2,304.7 million. Read More

Do Quality Shares Lead to Lower Returns for Your Portfolio?

Managing your own stock portfolio is not easy. One of the many important decisions is choosing between quality and returns. Is there a cost in investing in high-quality shares? Could buying them lead to lower returns?

There’s no simple answer. However, your rate of return on a stock depends largely on the valuation you paid and the growth rate of the company. Besides, there are other considerations outside of aiming for high returns.

Let’s explore the answers with examples, including Microsoft Corporation (NASDAQ:MSFT), The Coca-Cola Co (NYSE:KO).

Quality companies tend to trade at premiums

Some say you can get quality and returns too. The rationale being that when you buy quality companies, their steadily rising earnings will lead to steadily rising share prices. However, if you overpay for them, the expected returns will likely be unsatisfactory. Read More