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 237 - Which stock would you choose? EMN? DEA? or EIX? for your portfolio?
Welcome to Safe Dividend Investing's Podcast 237- (30 August 2025)
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 is being written for investors who fear making investing in individual stocks because they fear losing the savings, they may have spent a lifetime accumulating.
Ian's books always show investors an easy, safe way to pick financially strong companies who pay high dividends . Stocks that can 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 a sampling of financially strong, high dividend stocks from his new book. You may want to refer to the written transcript that accompanies each podcast.
Today he is scoring, comparing and analyzing;
(1) Easterly Government Properties Inc (stock symbol DEA )
(2) Eastman Chemical Company (stock symbol EMN )
(3) Edison International (stock symbol EIX )
For more information on self-directed investing go to my website www.informus.ca or listen to the previous 233 weekly podcasts. The first 160 podcasts are devoted to answering questions from investors just like you.
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
30 August 2025
Podcast 237
Greetings to listeners all around the world. Welcome to Safe Dividend Investing’s Podcast # 237, on August 30th of 2025. My name is Ian Duncan MacDonald and I am an author of six investment books.
I continue to work on my new investment book to be called “2025 Edition – America’s 200 Strongest High Dividend Stocks – Analyzed and Scored”. Like all my other investment books it is being written for those who fear investing in the stock market because they believe they could lose the savings that they may have spent a lifetime accumulating.
My objective is to show you how easy it is to identify financially strong companies that will provide a generous, reliable, growing, monthly dividend income but also grow the total value of your portfolio.
Self-directed investors are is unlike those who blindly entrust their life savings to so called “investment professionals” (whose hidden agendas and incentives may not be in an investor’s best interest). A self-directed investor not only saves thousands of dollars in investment fees, charges and commissions but they understand the strength of what they chose to carefully invest in.
As a self-directed investor you would gain free access to stock research tools available on the internet. These tools immediately allow you to narrow your search from the thousands available down the 20 financially strongest, paying high dividends.
This selection process is similar to what I am now going through in selecting the 200 financially strongest, high-dividend stocks for this new book. I began my search by entering the following criteria into my bank’s free stock selector program:
(1) The stocks listed on the New York Stock Exchanges or the NASDAQ.
(2) Only common shares are wanted. Preferred shares are excluded.
(3) The stocks must have a dividend yield percent of 5 percent or more.
(4) The share price must be $5 or greater.
(5) Their Operating Margin must be 3% or more.
The 200 stocks that have appeared offer readers a wide enough choice to select the 20 best for their portfolio. 20 is enough to give a portfolio a safe diversification, yet small enough for an investor to easily create and manage their portfolio.
This week I have chosen to review from the 200 selected stocks three stocks whose company name begins with the letter “E”. By scoring and analyzing these 3 stocks along with me, you can see how you could confidently build your strong portfolio of 20 stocks.
The three stocks selected for analysis this week are:
(1) Easterly Government Properties (stock symbol – DEA). It is a Washington, D.C., based, US commercial property company leasing to US government agencies.
(2) Eastman Chemical Company (stock symbol – EMN) is a Kingsport, Tennessee, based US specialty materials company supplying the pharma, chemical and construction industry.
(3) Edison International (stock symbol - EIX) is a Rosemead, California based US electric utility holding company.
To help investors to compare stocks. I freely supply my IDM stock scoring software, on request, to those who purchase any of my books from Amazon.com. Each books details how the scoring system works evens shows how to calculate scores manually without the software.
The first data element to be considered and scored is a stock’s current share price. A high share price is an indication of strength. It is a stock in demand.
The highest share price of the three was EMN at $65.68, the two lower were EIX at $55.50 and DEA at $21.94. (All amounts are in US dollars).
The second element is the stock’s share price 4 years ago. in August of 2021, EMN led a with a share price $109.90. However, over the last 4 years it has now lost almost 50% of its value. DEA who was then at $54.30 has had a similar loss. The EIX share price of $59.53 in 2021 was only a few dollars higher than its current $55.50.
A stock whose share price is growing is sign of strength. A shrinking share price is warning sign to consider.
The third element is the book value of the shares. Book value is the financial evaluation of company worth as calculated by accountants. EMN with a book value $50.20 had the highest book value but DEA’s book value of $30.59 was better because it was a third higher than its current share price. EIX had a book value of $40.46 which was about a third lower than its current price.
Strong stocks whose book value is close to their current share price or even exceeding the share price indicate the stock is strong. It can make the purchase of that stock seem like a real bargain with increased odds the share price will increase.
The fourth and fifth elements are how many investment analysts have given the stock a “buy” and a “strong buy” recommendation. My research indicates that analysts are only at best about 50% accurate in predicting future stock prices. However, their predictions are considered because they do motivate some speculators to buy or sell stock which can impact share prices.
EMN led this scoring element with 7 buy recommendations. EIX had 4 buy recommendations and DEA had none. There were no strong buy recommendations. I define a strong buy as an analyst’s predicted share price that is at least 50% higher than its current share price.
The sixth element was the dividend yield percent. DEA was highest, with a dividend yield of 8.20%. EMN’s dividend yield was 5.06% and EIX’s was 5.96%. Since dividends are paid out of profits, high dividends are usually a good indicator of a company’s financial strength. However, sometimes a weak company will pay an unusually high dividend to desperately hold onto or attract shareholders who do not consider all the information elements in choosing the stocks for their portfolio.
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. EIX’s operating margin of 26.77% was highest followed closely by DEA at 25.97%. EMN’s was at 12.94%.
To drive up their operating margins, good managers focus on increasing revenues by raising prices and adding new products while reducing expenses. It is wise to compare operating margins of other companies in the same industry to get an idea of what a normal operating margin for a company in that industry would be.
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. EIX traded 2,147,076 shares that day. EMN traded 1,414,320 shares traded, while DKL had only 518,996 shares traded. A sudden high volume of shares traded can indicate either high demand or rejection of that stock by investors. Further investigation may be required.
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 of profits it would take to earn back the money invested in buying a stock. The lower the ratio the better.
EIX had the best Price-to-Earning’s ratio at 8.24x. EMN’s Price to Earnings ratio was also good at 9.2x. DEA’s at 55.8x was highest.
When all these sub-elements were entered into the IDM scoring software the total grand score for EIX was 68, EMN’s was 65 and DEA’s was 56 .
The IDM scoring software grades stocks between 0 and 100. The highest score I have ever calculated was an 86. Few stocks score over 70. The lowest score was a 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, the highest score may not always be your best choice for a portfolio. A score in the fifties might be paying a much higher dividend yield and be a better income producing choice than a score of 70. That is why it is always recommended that you always take the further time to check historical share prices and dividend payouts going back, year by year, to 1999.
While you are looking for a healthy upward trend over the 25 years. It would be unusual to see consecutive increases each year. However, over several years you would want to see a healthy upward trend.
You also want to confirm that 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, you will often see these managers increasing dividend payouts at a much faster rate than the share prices which are controlled by speculators. While managers have limited influence on share price their dividend increases keep your income ahead of inflation.
When I did a price and dividend history check of the three stocks, I found that DEA was not listed on the stock exchange until 2015. Its share price debuted at $39.10 with a dividend payout of $0.53. Its share price climbed to $63.90 by 2020 while paying a dividend payout of $0.65. In 2024 the share price dropped to $33.00 while the dividend payout increased slightly to $0.66.
EMN’s share price in 1999 was $25.62 and its dividend payout was $0.22. By 2018 the share price had reached $97.69 and the dividend payout was $0.56. In 2024 it reached an all-time high of $110.57 and its dividend payout reached $0.81.
EIX’s share price in 1999 was $23.75 and its dividend payout was $0.27. By 2018 the share price had reached $77.62 and the dividend payout was $0.54. In 2024 it reached an all-time high of $85.42 with a record dividend payout of $0.78.
The final historical stock record to check is to do a Google search for each stock which includes their company name, their stock symbol and the words “complaints” and “legals”. It was interesting to read that DEA provides regional hospitals and clinics for the Drug Enforcement Agency and the FBI. Analysts believe that the election of Donald Trump has lowered the DEA share price significantly.
The Eastman Chemicals (EMN) search found that there sales in 2025 were lower than they had been in 2024. New tariffs introduced by Donald Trump were believed to be negatively impacting their share price.
The Edison International (EIX) search disclosed that they face securities fraud allegations in a class action lawsuit filed in February 2025 by shareholders. The legal action claims that Public Safety Power Shutoffs (PSPS) were misrepresented, leading to higher fire risks and increased legal exposure for the company.
The perfect stock does not exist. However, if you had to make a choice which one of these 3 stocks would you choose? By showing that you can make such a choice, you have demonstrated that you do have an ability to analyze stocks.
While scoring stocks helps protect your investment, the safety of your portfolio is also greatly increased when you invest equally in 20 strong stocks. With 20 stocks only 5% of what you have invested in any one stock would ever be at risk. Furthermore, because you would be generating between 6% and 8% in annual dividend income and also generating an annual portfolio capital gain, most years, of 9% or more, the odds of you ever realizing a significant loss in your total portfolio are highly unlikely.
By investing your dividends back into the 20 stocks in your portfolio you can expect to see your portfolio doubling within 5 years. This is because of the compounding benefit of earning new dividends from your re-invested dividends.
FOR MORE HELP IN IMPLEMENTING THIS SAFE APPROACH TO INVESTING VISIT my website www.informus.ca and listen to all 237 of my weekly Safe Dividend Investing podcasts.
Until next week’s podcast this is Ian Duncan MacDonald encouraging you to become a successful, wise, self-directed investor.