Thursday, August 28, 2014

Dividends From Around the World

Dividend-paying stocks are often seen as a safe haven, while investing in foreign stocks is seen as a bit risky. But investors these days are able to combine those two strategies into one. A study from Henderson Global Investors shows that global dividends increased by 12 percent in the second quarter over the year-earlier period.

European companies paid out $153.4 billion in dividends last quarter, as compared with $98.5 billion for North American companies. European stocks averaged a 3.3 percent dividend yield at that point, as opposed to 2.0 percent in the U.S.

And those numbers have been growing recently. Worldwide dividends were $780 billion in 2010, but they have topped $1 trillion in 2012 and 2013.

Wednesday, August 27, 2014

The S&P's New Record

The S&P 500 Index closed above 2,000 for the first time ever yesterday. It had cleared 2,000 on Monday as well, but fell back below the mark before the end of the day. In the five years since the S&P bottomed out in 2009, the index has nearly tripled - it's up 195 percent over that time.

The Nasdaq is also closing in on a record. It's within 10 percent of the high it set back in March 2000. That has some pundits comparing the current market to the dot-com mania of the late 1990s.

But there's an important difference between the two eras. When the dot-com bubble peaked, the S&P 500 was trading at close to 30 times the annual earnings of its companies. Although valuations have been rising, they are still only about 19 times earnings right now.

Tuesday, August 26, 2014

The Housing Market Settling Down

We had a hiccup in the housing market last year: After home sales peaked in July 2013, they began to slow down as mortgage rates began to rise. But now we seem to be past that: July sales were up 2.4 percent from the June rate, meaning they were the highest in 10 months.

One positive side note on that growth is that there are fewer distressed and foreclosed homes making up the market. Distressed sales made up just 9 percent of all home sales in July, the lowest that figure has been since the National Association of Realtors began compiling those numbers back in October 2008.

Interestingly enough, home sizes seem to have peaked as well. In the third quarter of 2013, the median new home in the U.S. was 2,491 square feet, the highest on record. But in each of the last two quarters, median home size has been exactly the same, at 2,478 square feet.

Monday, August 25, 2014

Job Security

Americans are not nearly as worried about losing their jobs as they were during the recession, according to a new Gallup survey. In fact job security is the highest it's ever been in the history of this survey, which dates back to 1993.

The survey shows that 58 percent of Americans are completely satisfied with their job security. That number had been around 50 percent for the duration of the recession, and was at just 51 percent as recently as 2013. But even before the recession, American workers didn't feel this secure. The previous high for this particular question was 56 percent, recorded in 2007.

There was only one question on the job-satisfaction survey that came back worse this year than in 2013. Slightly fewer people reported that they were satisfied with the flexibility of hours their employer offered.

Friday, August 22, 2014

The Strong Side of Private

Publicly traded companies have been doing pretty well lately, but according to a new study from Sageworks, private companies are doing even better. For the 12 months ended on August 14, revenue growth at public companies averaged 2.6 percent. But revenue at private companies averaged a whopping 10.7 percent.

It's been like that for a few years now. Over the prior three 12-month periods, public company revenue growth rates were 4.5 percent, 3.4 percent,  and 2.7 percent. But those at private companies were 16.2 percent, 17.7 percent, and 10.6 percent.

But don't make the mistake of thinking that's the natural course of things, the private companies always out-earn public ones. During the recession, it was the opposite. For the 12 months ended August 14, 2010, public companies showed sales growth of 1.2 percent - while private companies' sales were dropping by 0.6 percent.

Thursday, August 21, 2014

The High Cost of Car Maintenance

It may seem like it’s horrifically expensive to keep your car in New Jersey, especially given our sky-high insurance rates. But rest assured, there are states that have it worse.  In a new survey from Bankrate, New Jersey came in as just the fourth most-expensive place to keep a car.
 
Considering insurance, repairs and gasoline, the average car owner in New Jersey spends $2,421 on his or her vehicle each year. But four states actually spend more: Wyoming, Louisiana, Florida and Mississippi. Only Louisiana and Washington D.C., charge higher auto insurance rates than our state’s average of $1,244.  But our average annual repair bill - $393 – is the highest in the nation.
 
The cheapest state in which to keep a car? Iowa, whose residents spend just $1,942 per year on each vehicle.

Wednesday, August 20, 2014

Better Than Google

Google's IPO, one of the most celebrated and successful initial public offerings in the history of the American stock market, took place ten years ago yesterday. Over those ten years, Google's stock has increased by 1,294 percent. If you had invested $10,000 in Google's IPO, you'd have about $140,000 today.

Incredibly, as the Wall Street Journal points out, there are ten stocks that have performed better than Google over those ten years. They are:

  • Keurig Green Mountain, up 7,729 percent
  • Monster Beverage, up 6,569 percent
  • Priceline, up 6,277 percent
  • Apple, up 4,419 percent
  • Alexion Pharmaceuticals, up 4,265 percent
  • Regneron Pharmaceuticals, up 4,167 percent
  • Netflix, up 2,840 percent
  • Intuitive Surgical, up 1,796 percent
  • Salesforce.com, up 1,687 percent
  • Western Digital, up 1,306 percent