Picks for Principal and Dividend Growth

Dear Mr. Berko: I am 66 and will retire next year with a $1,365 monthly pension and a 401(k) worth $349,000, which I rolled over to an individual retirement account. I have no debt and will maximize my Social Security by waiting until age 70 to take checks. I told my new stockbroker that I want to invest for dividend and principal growth, and he suggested Qualcomm, Maxim Integrated and Verizon. What do you think? — GD, Vancouver, Wash.
Dear GD: I think you have an expealidocious broker.
Qualcomm (QCOM-$65.71), founded in 1985, makes chips — and plenty of them — has excellent long-term appreciation potential and has an attractive, well-supported dividend, which yields 3.2 percent. QCOM is engaged in the commercialization of wireless communication technology. QCOM is the biggest mobile chipmaker in the world, and when its merger with Netherlands-based NXP Semiconductors is fully integrated, QCOM will become the biggest automotive chipmaker in the world. Revenues zoomed from $5.6 billion in 2004 to $23 billion in 2016, and share earnings grew from $1.09 to $4.30 in that time frame. By 2020, those revenues could grow to $28 billion, and share earnings could rise to $6.40. And QCOM’s dividend, which was 19 cents in 2004, increased in each of the past dozen years, all the way to $2.12. The consensus says that by 2020, the dividend could rise to $3.10, which would be a 5 percent yield on the current price. Analysts have a four-year price target between $90 and !
$110. Meanwhile, Market Edge, Thomson Reuters, Argus Research and S&P Capital IQ rate QCOM as a “buy.”
Maxim Integrated Products (MXIM-$40.46), founded in 1983, has 7,200 employees designing, producing and selling $2.3 billion worth of linear and mixed-signal integrated circuits. With its high-quality power management ICs for servers and communications equipment, the company expects to produce impressive results. When revenues broke the $1 billion mark in 2003, MXIM earned 91 cents a share and paid its first dividend of 8 cents. In 2017, Wall Street expects earnings of $1.95 a share, and the dividend, which has increased for 13 consecutive years, may be increased to $1.40. That would be a handsome 3.6 percent return on today’s price. The consensus is that the company will have continued earnings and dividend growth, with a $65 price target by 2020. Value Line, Susquehanna International Group, S&P Capital IQ and RBC Capital Markets have “buy” ratings on MXIM.
Verizon Communications (VZ-$52.67) is a boring pale blue chip telecommunications company that’s certainly less volatile than QCOM and MXIM. VZ’s revenues, earnings and dividends are not so sensitive to the economic cycle as those of QCOM and MXIM. VZ was created by the merger of Bell Atlantic and GTE in the summer of 2000, when the newly combined company traded in the mid-$50s. Revenues that year were $65 billion. Share earnings were $2.92. And the dividend was $1.54. Revenues for 2016 should come in at $127 billion, and earnings should come in at $3.95 a share. Meanwhile, the $2.31 dividend, which has been increased for 14 consecutive years, yields 4.34 percent. The Street’s five-year consensus puts the share price between $70 and $85 and predicts revenues of $139 billion, share earnings of $4.75 and a $2.60 dividend, which would yield 5.5 percent at today’s share price. Drexel Morgan, Value Line, Argus Research and Bank of America are recommending VZ. The company’s financ!
es, rated A++ by Moody’s, are in grand shape. Long-term debt is declining, and its cash position is growing. VZ’s board of directors seems dedicated to maintaining shareholder value and should continue to raise the dividend. Though many on the Street believe that VZ has significantly above-average appreciation potential, VZ’s price may be stagnant for a couple of years. The main culprit is Yahoo. The purchase of Yahoo will combine one of the largest portfolios of exclusive internet content with an impressive distributor of internet service. That’s good. But the Yahoo schnooks who’ll come over to VZ may not be able to work effectively within the VZ culture. They couldn’t even function well under the Yahoo culture. That’s not good! Still, VZ is a dandy long-term stock. I like your broker’s picks.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. 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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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.