Big Banks and Good Pizza Dear Mr. Berko: What are your thoughts on buying stock in some of the big "money center banks"? I wanted to buy 1,000 shares of Bank of America when it was selling for $5 a share back in 2011. Unfortunately, I got scared and didn't have enough …Read more. Cars and Loans Dear Mr. Berko: I bought 300 shares of General Motors at $26 over two years ago, even though you said it was a dumb investment. Auto sales have been taking off, and now I'm asking whether you think it would be a good investment to buy 600 shares of …Read more. Keynesian Economics Today Dear Mr. Berko: Could you explain the economics of John Maynard Keynes in simple English and how the Federal Reserve is using his ideas to strengthen the economy? I can't determine whether his policies work or whether his policies are inflationary …Read more. Foreign ETFs Dear Mr. Berko: I am 69 and expect to retire this summer with a good pension and a sizable rollover from my company 401(k) to an individual retirement account. My IRA is invested in a combination of blue chip stocks and "pale blues," as you call …Read more.more articles
Dear Mr. Berko: I want to take a modest gamble with about $21,000 and would like to buy some high-dividend-paying stocks that you think have a chance of maintaining or increasing their dividends as well as the value of the stock price. A broker who was recommended to me said that my idea of buying high-dividend stocks was suicide. He said that the dividends are high because the company is on its last legs and could easily collapse in price or even go out of business. He suggested that I invest in penny stocks that sell for under a dollar a share. He said I could buy 25,000 shares like CCTC at 12 cents a share for $3,000, and if the stock moves up 10 cents in a week or two weeks, I would clear $2,500 and almost double my money. He showed me many stocks that he bought for clients that have increased tenfold in value. Please advise me. — D.R., Mount Clemens, Mich.
Dear D.R.: Of course you know that the reason penny stocks sell for pennies is because pennies are what they are worth. I think that broker ought to petition the court to have himself legally declared as a cockroach. This cur is dangerous to your wealth. Penny stocks are for penny brains whose total sum of knowledge and expertise is worth a cooper.
Many folks claim they've made big scores in the penny stock market, and many have. However, those penny brains never tell you of the numerous huge losses they absorbed in order to earn bragging rights for just one score. And it's been my experience that penny-stock buyers enormously inflate the profits they brag about.
Meanwhile, the following three high-yielding stocks have a better-than-even chance of maintaining their high dividends, growing their businesses and improving their stock values.
Cellcom Israel (CEL — $33.05) is one of three cell phone companies in Israel, but seems to have technical superiority over the other two.
Winstream Communications (WIN — $10.41) is a specialty phone company that provides landline, Internet, long distance, network access and video service to 3.2 million customers in the very rural areas across 16 American states. This $3.1 billion revenue company has a 13 percent net profit margin, and its $1.00 dividend yields 9.6 percent.
Finally, Century Telephone (CTL-$34.76), with $7.1 billion in revenues, trades at just a buck above its $32 book value. CTL, which acquired Pacific Telecom (an AT&T spinoff) in 1997, is the fourth-largest phone company in the U.S. It boasts a blue chip balance sheet and sound finances. CTL has 10 years of consecutive earnings growth, and its 15 percent net profit margins allow it to pay a $2.90 dividend that yields 8.65 percent.
Put these three in your Meerschaum and enjoy an 8.5 percent or better average annual dividend return on your investment. Then sit back, smoke your pipe and wait for CEL, WIN and CTL to eventually rise in value.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at firstname.lastname@example.org. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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