Marathon Oil's Dividend Is Safe

Dividend investors know that it pays to follow how much of a company's money goes toward funding its payouts. A nice yield now won't matter much if the company can't keep making those payments going forward.

Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools:

  • The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than 1 means that the company is not bringing in enough money to cover its interest expenses.
  • The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome.
  • The FCF payout ratio, or dividends per share divided by free cash flow per share. Earnings alone don't always paint a complete picture of a business' health. The FCF payout ratio measures the percentage of free cash flow devoted toward paying the dividend. Again, a ratio greater 80% could be a red flag.

Each of these ratios reflect dividends paid in the trailing 12 months; yields are the expected forward yield. Let's examine Marathon Oil (NYSE: MRO  ) and three of its peers.

Company

Yield

Interest Coverage

EPS Payout Ratio

FCF Payout Ratio

Marathon Oil

1.9%*

44.0

22.9%

19.1%

ConocoPhillips (NYSE: COP  )

3.5%

13.0

27.8%

37.4%

Valero Energy (NYSE: VLO  )

0.8%

4.5

21.5%

6.1%

Chevron (NYSE: CVX  )

3.0%

952.7

28.0%

54.3%

Source: Capital IQ, a division of Standard & Poor's. *Based on expected $0.15 quarterly dividend following spinoff of refining division.

With an interest coverage ratio of 44.0, Marathon Oil covers every $1 in interest expenses with $44 in operating earnings. Given its EPS payout ratio and FCF payout ratio are below 25%, you shouldn't have to worry that Marathon Oil will need to cut its dividend anytime soon. The company has been doing well, and it recently spun off its refining division as Marathon Petroleum (NYSE: MPC  ) to make it a more easily valued business and to rid itself of its conglomerate discount. Investors should be aware that the two Marathon entities plan to divide their previous dividend, so Marathon Oil shareholders will get a smaller per-share dividend to reflect the portion that goes to Marathon Petroleum shareholders.

Another tool for better investing
Most investors don't keep tabs on their companies. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. We can help you keep tabs on your companies with My Watchlist, our free, personalized stock-tracking service.

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How to Make Investing a Family Affair

Bush family photoThere's nothing out of the ordinary about teens talking about video games. But what makes the conversation that Aaron Bush, 16, and his younger brother had during a dinner out with the family so amazing was how quickly the banter turned from which games were cooler to which gaming companies were succeeding and why.

That table talk was a result of years of family conversations about stocks and investing. Their induction into investing started when Aaron was just 10, says his mother, Joan. Aaron immediately latched on to the topic and began researching and learning everything he could.

Today, between high school homework and extracurricular activities, Aaron still keeps up with stocks -- and even influences the rest of the family's investment choices. "He can be rather convincing when he's researched a stock in depth," Joan says. "He's passed me up now, which is fine by me."

Tips On Having "The Talk" -- The Investing Talk, That Is

Joan says that Aaron seemed to have a natural bent toward investing, and "by accident I got him started early." Aaron is fascinated by the number-crunching side of investing. Her other son was less enamored with the balance sheets and income statements.

"In my case, I've found that one son thinks compounding and financial figures are fun. The other does not. Instead, he shows more interest when the learning relates to a company he likes or knows about," Joan says.

She says that using what already interests her boys helps them learn. "I've taken a totally different approach with my youngest son. I've guided him into investing in businesses we experience, like Apple (AAPL), Amazon (AMZN), Activision (ATVI), Ford (F), Pepsi (PEP) and Procter & Gamble (PG). For example, a couple of years ago, we chose Sysco (SYY) after seeing the trucks make deliveries every Wednesday morning at the middle and elementary schools the boys attended. Instead of getting mad when the Waste Management (WM) truck blocks us in the alley, we cheer because that trash is helping the stock."

After the family visited all of the Henry Ford sites in Dearborn, Mich., her younger son did a report on Henry Ford at school. "He was a Henry Ford fan and scolded us for having Toyotas in the garage. So when Ford gotten beaten down with the auto crisis, he eventually added it to his little portfolio."

Your Teen Can Teach You, Too

Joan's father was an investor, but he didn't explain much about his process and investing approach when she was a child. "I didn't start investing until I was in my 40s. I wanted my sons to start much younger. I think investing should be taught like any other life skill," she says.

But like every life skill, sometimes the teaching goes both ways. "In fifth grade, Aaron did a school project on investing that included explaining compounding, stocks, mutual funds, bonds, and so forth to his classmates. Even his teacher learned from him," Joan says. "The positive reactions from that presentation and the fun he had preparing it made him even more inspired to keep learning."

Make Learning About Investing a Family Affair

When Joan's father learned his daughter and grandsons were interested in stocks, he was inspired to make investing a three-generation family affair.

"He had the idea for the entire family to set up play portfolios. We all chose 10 stocks for a familywide contest," Joan says. "Aaron beat us all by choosing Apple. My husband lost by choosing companies that had the biggest ads in a magazine he was reading. It was hilarious. For my sons, this increased their confidence and quest to know more. My father later gave the boys some money to invest for college."

The Lasting Dividends of Investing Young

The family's investing education has become a legacy that Joan hopes will be passed along to future generations: "The main thing I've told my guys is that it's important to know how to invest well so they can take care of their families some day and teach their own kids. I remind them that they don't want to be like their dad and me who knew nothing and would be living much more comfortably if we had been educated in this area early!"

Have you had "the talk" with your teen? Do you talk finances at the family dinner table? What's worked in your household? Share your secrets in the comments area below.

Robyn Gearey does not own shares in any of the companies mentioned here. The Motley Fool owns shares of Ford, Waste Management, Apple, Activision Blizzard, and PepsiCo.

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Source: http://www.dailyfinance.com/2011/07/14/how-to-make-investing-a-family-affair/

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Serious Purchaser Credit score Credit card debt Sends Thousands of Americans To Credit card debt Relief

Client credit statistics today inform a difficult story and why the research is on for debt relief. The average credit card debt per home is at just below $16,000. The average curiosity fee is at 14.35% and nonetheless additional than 6 hundred million people sit keeping three or additional credit cards. Buyers in the United [...]

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DuPont's New Herbicide Is Suspected Of Killing Thousands Of Trees (DD)


imprelis

Newly approved and favored by landscapers for its environmental friendliness, the herbicide Imprelis is suspected in the deaths of thousands of eastern white pines and Norway spruce trees.

Imprelis is manufactured by DuPont and was approved for sale last October by the Environmental Protection Agency.

Intended to kill dandelion and clover, homeowners began complaining of the dead trees around Memorial Day, according to The New York Times.

For some landscapers, the die-off has been catastrophic. “It’s been devastating,” said Matt Coats, service manager for Underwood Nursery in Adrian, Mich. “We’ve made 1,000 applications and had 350 complaints of dead trees, and it’s climbing. I’ve done nothing for the last three weeks but deal with angry customers.”

No firm estimate exists on the extent of the tree die-off. But Bert Cregg, an associate professor of horticulture and forestry and an extension specialist with Michigan State University who has fielded many calls from landscapers and inspected affected trees, said the problem existed across the country. Many extension services have issued warnings, Dr. Cregg said. “This is going to be a large-scale problem, affecting hundreds of thousands of trees, if not more,” he said. Imprelis is used on athletic fields and cemeteries as well as on private lawns and golf courses, he noted.

DuPont will continue to sell the product, which is registered for use in all states save for California and New York, while the EPA investigates.

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The Art of Small Business Entrepreneurship


Are you an entrepreneur? If you’re reading this post or found it in a Google search, perhaps the answer should be obvious. Whether the business you plan to start or get into is large, small, or somewhere in between, the skills you will use to evaluate the market, competition and risks of the venture are, in part, skills belonging to an entrepreneur. If you fit into this category, you’ve come to the right place. So sit back and enjoy the links below.

Entrepreneurship Basics

Differences between big and small business? Is there a real difference between building a big versus small business? Maybe not, according to Liz Strauss who had the opportunity to visit with billionaire Clay Mathile and hear the story of his life as an entrepreneur. Check out some of Liz’s takeaways and ask yourself, is this any different than the way you would build your business? Successful and Outstanding Bloggers

How to get others to take ownership. It’s tough to get others who don’t own your business to behave as if they do. Let’s face it. Do you want your day-to-day business managed by people who view your company as just place to put in their time for 40 hours a week? Or do you want them to truly feel as if they have a vested interest in the place? Any entrepreneur can tell you about the benefits of managers who take ownership. Now, here’s how to accomplish it. Inc.com

Humble Beginnings

Why small entrepreneurs should hire their kids. Summer’s here and if you’ve got kids who are out of school and without a summer job and you also happen to own a business, here are some thoughts about bringing your progeny into the family enterprise. Some simple steps will allow both you and your children to get the most out of the experience and who knows! You may be launching them on the path of entrepreneurship too. WSJ

Starting with nothing. Becoming an entrepreneur doesn’t need to involve raising outside investment…at least in the beginning. Starting a business with no outside and limited internal funding is a time honored tradition among entrepreneurs creating businesses large and small. It’s called bootstrapping and here are some suggestions that can make it work for you. Open Forum

Basic Skills

What is your product or service for? You may not have thought about really asking or answering this question before but it is the most important question for an entrepreneur to answer about a product or service. Answering it also can help you answer other questions like, who are your target customers and how can you let them know you exist? Answering these questions incorrectly can result in problems but not as many as never asking them at all. Seth Godin’s Blog

The need for financial literacy. No matter how large or small your business, a firm understanding of financials is imperative for every entrepreneur. Sure your passion is in the core functions of your business, but there is no excuse for failing to understand the financial side of things. To this end, venture capital investor Brad Feld has decided to write a series of posts that will help all entrepreneurs gain a better understanding of the economic realities behind their businesses. Feld Thoughts

Self-development

What kind of business are you really in? Rex Hammock may have started in the publishing business but soon discovered that his business was truly about helping his customers to better meet their goals. Rex talks about “loyalty” as a “journey” with customers and clients and about understanding how helping your customers achieve their goals is your real business and the one that will help you achieve the greatest success. Chris Brogan

Principles of leadership. As an entrepreneur, you are a leader, whether you run a company with 100 employees or with just one. As an entrepreneur you have created a new product or service, a new brand, something new that has never been seen before. So what principles should you adopt to help you cope with the many pressures that also come along with entrepreneurship? Here are some basics from CEO Tony Schwartz. Fast Company

Customer Service & Startup

What are your customers really worth? Understanding the value your customers represent is the key to success for any entrepreneur. But the fact is that there are many ways customers are valuable to your business going beyond simply purchasing your products and services. If you want to learn more about how your customers and clients can shape your business, perhaps in ways you never expected, read on. Open Forum

To be or not to be. In a highly competitive economy with few resources at hand such as readily available financing or credit, one small business consultant asks the question, is this really the right time to become an entrepreneur? The answer (not surprisingly) is that it depends. Do you have a great idea, see a great opportunity or have the ability to stick it our long enough? There are always good reasons not to become an entrepreneur and to become one as well. But in the end, the decision comes down to you. The Frugal Entrepreneur

From Small Business TrendsThe Art of Small Business Entrepreneurship

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Financial debt Consolidation Your Creditors Want You To Fall short

If you are like hundreds of thousands of Americans, you almost certainly have an spectacular credit card debt on a single or a lot more of your credit cards. This is not strange the normal U.S. family owes roughly $10,000 in credit card credit card debt. When this is combined with a single or a [...]

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Debt Arrangement Scheme

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Financial debt occurs when money is owed to one or more creditors. Although a certain amount of debt can be manageable, and even a part of financial strategy, it can escalate (for example through growing interest) and the debtor can quickly lose control and soon owe more than they are capable of paying back. Debt can be a massive burden as creditors can take legal action to recover what they are owed if payments are not made on time, and this can result in bankruptcy.

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Get The Attorney Services You Need

Sometimes, discovering the right attorney and also the best attorney services isn’t easy. There are lots of issues that you need to consider. You need to think about the services you will need and what specific legal expertise do you need. Your state laws when getting attorney services are also on the list of major [...]

Source: http://www.legaldebthelponline.com/2011/07/13/get-the-attorney-services-you-need/

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