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Sanibel Captiva Investment Advisors President Pat Dorsey on safe havens that minimize risks yet still boost investors’ portfolios.
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Well we're gonna talk right now about the cost of safety.
Many of the traditional state safe havens are getting more expensive so pat Dorsey is back with ways.
You can get safety in your portfolio without the high prices.
First of all for -- to find safety.
Well most feel define safety and stuff that doesn't bounce around a whole lot -- -- -- -- get my money back.
So treasuries for example odds are good units and in default but the the question becomes if you're buying it and -- treasury and it one point 8%.
Sure you're gonna get your money back but after inflation you're gonna -- it lost money after ten years what about corporate bonds.
Well also Pepsi recently sold a thirty year bond at three point 6%.
Liz would you want to lock up your money for thirty years of three and a half percent.
No -- might be dead and thirty okay what are we are up but that's my point is that people are thinking about safety as does it bounce around a -- month to month not.
Will it help me achieve my goals -- I want the diamond studs next year not thirty years yeah exactly exactly.
Okay so if you look at that you look at things like Staples.
Consumer Staples tobacco high dividends everybody gets excited what better investments than what.
People out here right now watching feel are traditionally separate so -- I would say is big picture especially for chasing dividends right now.
Focus on dividend growth not current yield name people want it now right into the utilities telecoms have all gotten -- it.
Whereas if you don't focus on companies would.
Lower dividends have better growth.
Like take -- Morgan in Canada which -- on later on that's right about Francis has some live from Houston explicitly Williams Cos.
and these are both their ability and B is the ticker.
Both very similar that their regular see corporations not you know -- That owned pipelines each -- a three point seventy point 9%.
-- growing its dividend at about 0%.
Williams for the next three years will grow at 20%.
And I would argue that's a far better total return the utility at seventeen times earnings -- three and a half percent that grows at.
Basically inflation.
I want to remind our viewers to the rich -- was at Williams in a Fox Business exclusive because they were getting into nuclear power -- nonetheless they were getting some.
Deals when it came to that so their opportunities overall in those two names but what about technology you know when you look at dividends lately.
Technology has overtaken the traditional dividend payers.
And that's thanks to some big names out there do you like any tech names that are giving dividend -- also.
-- Cisco is a great example there you know.
John Chambers finally found that would include trained for dividends was.
And said we're gonna you know 375%.
-- you Cisco now yields about 3%.
And has a 15% free cash yield in other words free cash -- about it -- -- you pay port 15% which.
-- jumped out very fast from the chart but it's up about 20% over the past year Cisco -- -- everybody says.
John Chambers is either leaving the company doesn't have message of massive direction I saw -- wire all of London for the Olympics I thought that was pretty impressive they know what they're doing they've got government contracts to get.
And the two important things for the past year were first of all chambers walking down the long term revenue growth number from an achievable 15%.
That much more reasonable behind some of it is and then initiating this dividend returning capital to shareholders the other tech stock -- I think is very cheap right now Oracle has a.
Italy and dividend.
And I think that you know seeing Larry Ellison actually return capital to share Hosni meaningful fashion.
Would be final signal that the sort of macho idea on income Silicon Valley that you know declaring dividend is an admission of defeat know it's a declaration of victory.
Nothing that says I admit that -- company is no longer growth -- but -- -- I want and so profitable he give you money back.
Pat Dorsey thank you very much and by the -- -- numbers coming out after the bell also.
Stay in the Greek government hangout with us I will keep -- and Europe can keep an eye on the back.
-- -- -- the -- -- pat thank you pat Dorsey upset about Aptiva investment advisors president.
