Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
PODCAST 233 - FIRST 3 OF 200 STRONG HIGH DIVIDEND STOCKS - ALX, ARE and ARLP
Welcome to Safe Dividend Investing's Podcast 232.
Ian Duncan MacDonald has started to write another investment book on stocks traded on the New York Stock Exchange and the NASDAQ. It will be called “2025 Edition – America’s 200 Strongest High Dividend Stocks – Analyzed and Scored”. It will take several months to complete. It is being written for those investors who fear making investment decisions. Many of them fear losing savings, which they may have spent a lifetime accumulating.
Ian's books show investors an easy, safe way to pick financially strong companies who pay high dividends that will provide a generous, reliable, growing income while also increasing the value of their portfolio. Unlike mutual funds and other investment vehicles where investors have no control over their investment, self-directed investors who create a manageable portfolio of 20 stocks from the 200 analyzed and scored stocks will know exactly what they are invested in and why they chose each stock for their portfolio.
Ian is inviting those wanting to gain self-confidence in self directed investing to follow along in his podcasts over the next few months as he scores and analyzes the stocks for his new book. Today he is scoring and analyzing the first three strong stocks in the alphabetical listing of the 200 stocks. They are : Alexander's Inc (ALX), Alexandria Real Estate Equities Inc (ARE) and Alliance Resource Partners LP (ARLP).
For more information on self-directed investing go to my website www.informus.ca or listen to the previous 232 weekly podcasts. The first 160 podcasts are devoted to answering questions from investors just like you.
Ian Duncan MacDonald
imacd@informus.ca
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
Safe Dividend Investing
2 August 2025
Podcast 233
Greetings to listeners all around the world. Welcome to Safe Dividend Investing’s Podcast # 233, on August 2nd of 2025. My name is Ian Duncan MacDonald, I am an author of six investment books.
I have started to write a new investment book to be called “2025 Edition – America’s 200 Strongest High Dividend Stocks – Analyzed and Scored”. It will probably take several months to complete. It is being written for those investors who fear making investment decisions. They fear losing all what they may have spent a lifetime accumulating.
My books teach them an easy safe way to pick financially strong companies who pay high dividends that will give them a generous, reliable income while also growing their portfolio. They will know exactly what they are invested in and why they chose each stock.
There are about 12,000 stocks in North America to choose from. How do you narrow the selection down to the best. As a self-directed investor with a major financial institution you have free access to research tools that allow you start narrowing your search just as I am doing writing this book.
To identify the 200 stocks that go into the book. I fed the following criteria into the free selector software. I wanted stocks that:
(1) were listed on the New York Stock Exchanges and the NASDAQ.
(2) were common shares, preferred shares were excluded.
(3) had a dividend yield percent of 5 percent or more.
(4) had a share price of $5 or greater.
(5) had an Operating Margin of 3% or more.
(6) had a daily share trading volume exceeded 24,000 shares
(7) had shown a share price gain of at least 1% in the last year.
While the 200 that were selected may be considered strong high-dividend stocks, this does not necessarily mean that you would want to put all of them in your stock portfolio. Ten percent of these 200 or 20 stocks is a reasonable number for sufficient diversification and for an investor to manage in a portfolio. To help narrow the 200 down for the readers of this new book, I am going to score and analyze all 200 stocks.
I am inviting you over the next few months to follow along as I score and analyze the stocks. The objective is to turn you into a wise, self-directed investor who will feel confident in choosing the stocks for your portfolio because you have observed the process of scoring and analyzing stocks. You may want to go to stock data sources like Yahoo Finance and look closely at the data recorded for each stock. I personally use my bank’s free research data.
After selecting the 200 stocks the first thing I did was sort them alphabetically. The first three stocks listed were:
(1) Alexander’s Inc - stock symbol ALX
(2) Alexandria Real Estate Equities Inc – stock symbol ARE
(3) Alliance Resource Partners LP – stock symbol ARLP
The challenge in this learning exercise is if you could only choose one of these three stocks for your portfolio, which one would it be? You now know little about them and making a choice is impossible.
The first step in making your selection is to score each of the three stocks using my IDM stock scoring software requires. You can easily obtain this software by investing in one of my inexpensive investment books and then sending an email to imacd@informus.ca requesting your free copy of the software be emailed back to you.
If you do not want to use the software you can manually calculate the scores, I can either send you instructions on how to do it manually, free of charge, or if you go the 210th podcast of “Safe Dividend Investing” you can find the same instructions. The stock scoring software just makes calculating the stock scores faster and easier.
Nothing is good or bad, big or small, except by comparison. Thus, having 3 stocks to score gives insight into the reality that each stock has strengths and weaknesses. It is only by you making an informed judgment decision that you will be able to determine which stock would be best for your portfolio.
Since you are making that purchase decision you will know exactly why you chose that stock out of the 12,000 available in North America. You are not relying on blindly investing your money in stocks resident in a mutual fund chosen by someone whose hidden agendas and incentives may not be in your best interest,
The first data element to be added to the software’s stock scoring matrix is their share price. A high share price is an indication of strength. It is a stock in demand. The highest share price was for ALX at $258.76, the lowest was for ARLP at $26.41. ARE was $78.03.
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The second element was the share price 4 years ago in July of 2021. ALX was at $251.79; ARE was at $208.06 and ARLP was at. 7.85. The large decline from ARE’s $208.06 four years ago to its current $78.03 was noted as was the significant share price gain of ARLP from $7.85 to its current $26.41. ALX was the most stable of the three.
The third element is the book value of the shares. This is a financial evaluation calculated by accountants. ALX has a book value of $34.63. ARE has a book value of $103.88 and ARLP book value was $14.31.
I always like strong stocks whose book value is close to their current share price or even exceeding the share price which makes it a bargain. It is like paying for a Honda Civic and getting a Lexus. ARE is the Lexus of these three stocks with a book value about 50% higher than what it would cost you to buy the stock at its current price.
The fourth element and fifth element are how many investment analysts have given the stocks a “buy” and a “strong buy” recommendation. While at best I think an analyst is lucky to accurately predict future stock prices 50% of the time, I included analyst recommendations as an element in my scoring because analyst buy recommendations can motivate some investors to buy a stock and cause share prices to increase.
Interestingly ALX had 0 buy or strong buy recommendations. ARE and ARLP both had 2 buy recommendations each and there were no strong buys. I define a strong buy as an analyst’s predicted share price 50% higher than its current share price. Analysts are paying little attention to these three stocks.
The sixth element was the dividend yield percent. ALX was paying a dividend yield of 6.96%, ARE’s was 6.77% and ARLP was 50% higher than these two at 9.09%. Since dividends are paid out of profits, they are usually a good indicator of a company’s financial strength.
The seventh element was the operating margin. It reveals the amount of money left over after operating expenses are deducted from revenues. The higher the operating margin percentage, the stronger the stock. ALX’s operating margin at 34.48%, was almost three times greater than the 12.67% for ARE and the 11.97% for ARLP. Good managers are focused on increasing revenues with as little increase in expenses as possible to drive up their operating margins.
The eighth element was the stocks share trading volume. High trading volumes usually, but not always, indicate rising prices for a stock in high demand. ARE had 1,290,780 shares traded that day. Far behind was ARLP with 385,548 shares trade followed by ALX with only 13,000 traded shares.
The final element was the price to earnings ratio. It is not unusual to see hot speculative stocks with ratios of 300 to 1 or even in extreme cases 1,000 to 1.
I always think of price-to-earning as indicating how many months it would take of profits for me to get back the money I had invested in a stock. ARLP had the best Price-to-Earning’s ratio with 15.5x. ALX’s Price to Earnings ratio was 35.5x and ARE had an unusual negative of minus 590.8x.
Finally, when all these sub elements were entered into the scoring software and the scores for each element were added the total grand score for each of ALX and ARLP was 55. ARE had the highest score at was 61.
The IDM scoring software rates stocks between 0 and 100. The highest score I have ever calculated was an 86. The lowest was 3.
I personally avoid adding stocks to my portfolio that score under 50. (Most stocks score under 50). The higher the score, the stronger the stock appears to be, however there can be exceptions where the highest score may not always be your best choice for your portfolio. A score in the fifties might be paying a much higher dividend yield and be a better choice than a score of 70. That is why it is always recommended that you next do a check of historic share prices and dividend payouts going back, year by year, to 1999.
You are looking for a trend over the 25 years in which both the share prices and the dividend payouts are increasing. It would be unusual to see consecutive increases each year but over many years there should be an upward trend.
You are also looking for stocks in which the executives of the company believe in consistently sharing their profits with their shareholder/owners by paying dividends. Once such a dividend habit is established, they will control expenses and revenues to maintain dividend payments which tend to rise as share prices rise.
Many executives take pride in maintaining a high dividend yield percent, which means they must increase dividend payouts when their share prices increase. These increases keep those who depend on dividend income well ahead of inflation.
When I did a history check I found that ALX’s share price was listed at $80.43 in 1999 and was not paying a dividend. It did not pay its first dividend of $2.50 until 2010 by which time the share prices had climbed steadily each year to $408.31 and its dividend was $2.50. The climb continued until 2012 when it reached its highest share price ever of $453.99 with a dividend payout of $3.75.
In 2013 the share price fell to $302. and the dividend fell to $2.75. Share prices stayed above $300 until the Covid year of 2020 when the market crash brought the share price down to $267.20. The dividend payout had reached the height of $4.50 in 2018 has remained at $4.50 for the last 6 years even though its share price dropped to $189.98 in 2023 which was its lowest share price since 2003.
The final historical record to check is to do a Google search of the Alexander’s Inc, stock symbol ALX, along with the word’s “complaints” and “legals”. This search revealed that ALX was a real estate investment trust renting office and retail properties in New York. It was still feeling the impact of the 2020 Covid market crash on its shrinking revenues and indebtedness.
Doing a search of historical records for the next stock, Alexandria Real Estate Equities Inc, stock symbol ARE, showed in 1999 the share price was $30.68, and it was paying a dividend of $0.43. The share price and dividend payout rose steadily each year until in 2007 when the share price reached $100.27 and the dividend was $0.76. During the market crash in 2008 the share price fell to $97.53 while the dividend increased to $0.80.
In 2009 the share price fell to $34.25, and the dividend fell to $0.35. The dividend then rose steadily each year until 2021 when it reached its all-time high of $183.99 with a dividend payout of $1.12. The share price fell and paid no dividends in 2022 and 2023. In 2024 it again paid a record high dividend payout of $1.30 while the share price was at $116.56.
The Google search of ARE, along with the words “complaints” and “legals which revealed that it was a life science real estate investment trust headquartered in Pasadena, California. No significant complaints or legal actions were shown.
The final stock considered, Alliance Resources Partners, stock symbol ARLP was not listed on the New York Stock Exchange until the year 2000. The share price was then $3.71 and it paid a dividend of $0.13. The share price and dividend payout climbed steadily until it reached an all-time high of $49.54 in 2014 with a dividend payout of $0.63.
The share price and dividend payouts then fell until they reached a low of $3.12 in 2020 during the Covid market crash with no dividend payout that year. Since 2020 the share price increased each year and reached $23.94 in 2024 with its highest dividend payout ever of $0.70.
The Google search for this diversified energy company out of Boulder, Colorado revealed no negative information for ARLP.
Now it is time to decide. Suppose you had $50,000 to invest in one of these 3 stocks. Which one would you choose and why would you choose it? Now might be a good time to go to the written transcript that accompanies this podcast and review the information on each of the three stocks.
The perfect stock does not exist. Whatever stock you choose, you must accept that no one can accurately predict future share prices or dividend payouts. In making your buying decision you have only your own analytical thinking to guide you. None of the 3 stocks has a bad score.
While scoring stocks helps protect your investment, your safety is also increased when you initially invest equally in a portfolio of 20 strong stocks. With 20 stocks only 5% of what you have invested in your total portfolio would then ever be at risk. The impact upon your total portfolio of one bad stock would be negligible because your total portfolio can be generating between 6% and 8% in annual dividend income while also generating an annual capital gain of 9% or more.
Twenty stocks are manageable. Too many stocks can create too much work and turn investing into an unwelcome chore.
FOR MORE INFORMATION ON HOW THIS APPROACH TO INVESTING CAN GUIDE YOU TO A SAFE, PROFITABLE GROWING PORTFOLIO VISIT my website Until next week’s podcast this is Ian Duncan MacDonald encouraging you to become a successful, wise, self-directed investor.
Any questions and comments can be sent to imacd@informus.ca. or Telephone New York 929-800-2397 or Toronto 416-245-4994