AI can hand you a confident, polished answer in seconds. So can a stock screener. But a number without context can lead you exactly where you don't want to go.

In Episode 63, Greg walks through what happened when we ran our McDonald's ($MCD) report through an AI model. It flagged a drop in return on invested capital as a sign of trouble. We saw a 12% return during a year the economy shut down and called it a win. Same number, opposite conclusions. The difference was knowing what drove it.

The same trap shows up in dividend screens. General Mills ($GIS), Campbell's ($CPB), Kraft Heinz ($KHC), Smucker's ($SJM), and Conagra ($CAG) all offer attractive yields, yet most of them lost money over a decade when the S&P 500 gained more than 300%. Look underneath and the story is clear: weak returns on capital and a habit of overpaying for growth. Verizon ($VZ) and AT&T ($T) tell a similar story, while Xcel Energy ($XEL) flips it, with low returns today but a real catalyst ahead.

We close with David Booth's book Stay Calm and its first rule: follow the science. Whether it comes from AI, a screener, or a headline, don't trust a number you can't explain.

TOPICS COVERED

[00:41] Introduction
[03:11] AI critiques our McDonald's ($MCD) report.
[07:59] Trust but verify: the limits of AI in investing
[11:34] Listener question: Are dividend opportunities fading?
[15:12] Food stocks: big yields, poor returns ($GIS, $CPB, $KHC, $SJM, $CAG)
[18:54] Verizon ($VZ), AT&T ($T), and Xcel Energy ($XEL)
[22:40] Turnarounds, value traps, and Nvidia ($NVDA)
[26:38] Book review: Stay Calm by David Booth
[30:32] How we're staying invested without overpaying
[31:38] Final takeaway: don't let AI drive you off a cliff

________

📖 Free Book: Dividend Growth: The Quiet Engine of Wealth

Dividend growth investing sounds simple, but doing it well for decades is not. That’s why we wrote Dividend Growth: The Quiet Engine of Wealth—a practical guide to building a framework you can stick with when things get uncomfortable. You can get a free copy here.

📰 Monthly Newsletter: Observations on the Market

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Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

This morning, a small kitchen-and-bath supplier nobody's ever heard of went up 200% before lunch. By the afternoon, it was already sliding back down. Meanwhile, one of the most boring yet beloved businesses in America just got cheaper than it's been in five years. In today’s market, it's easy to miss which one is the actual opportunity.

This month, Greg starts with FGI Industries ($FGI), a $9 million company that briefly saw a day's worth of trading change hands worth $1.5 billion. He walks through how a thin float and a wave of momentum trading turned an unremarkable quarter into a day trader's dream. He also gets into why chasing the inevitable crash back down, especially by shorting it, can be far riskier than it looks. It's a story with zero connection to cash flow.

From there, he makes the case that all assets and investments are built on cash flow, which sets the stage for a deep dive on the McDonald’s ($MCD) story. It's not a hamburger story. It's a royalty and rent story, with 95% of restaurants franchised, over 60% of revenue recurring, and returns on invested capital that have sat in the high teens since 2009. Greg breaks down the 10-year dividend model, why the stock is about as cheap as it's been in half a decade, and what would actually have to go wrong for the thesis to break.

Two companies, two completely different definitions of opportunity. One's a lottery ticket. The other's a cash flow machine that's been quietly compounding for decades.

TOPICS COVERED

[00:41] Introduction: flash money vs. slow and steady

[03:31] FGI Industries ($FGI): how a small-cap stock spiked 200% in a morning

[09:36] The hidden danger of shorting a low-float speculative stock

[13:03] Dividend yields are falling — is the strategy still viable?

[17:16] Why every asset ultimately depends on cash flow

[20:32] Introducing McDonald's ($MCD): not the story you think it is

[21:53] Franchise economics: royalties, rent, and McDonald's scale advantage

[30:39] Return on invested capital and 20 years of consistent dividend growth

[32:21] The 10-year dividend model: mapping out a potential double

[34:45] What could go wrong: GLP-1 drugs, shifting habits, rising input costs

[41:04] Valuation today and where we would start buying

[43:20] Final takeaway: discipline beats the illusion of easy money

________

📖 Free Book: Dividend Growth: The Quiet Engine of Wealth

Dividend growth investing sounds simple, but doing it well for decades is not. That’s why we wrote Dividend Growth: The Quiet Engine of Wealth—a practical guide to building a framework you can stick with when things get uncomfortable. You can get a free copy here.

📰 Monthly Newsletter: Observations on the Market

📧 Questions or comments: dcm.team@growmydollar.com

Send us Fan Mail

________

Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models

________

If you found this valuable, subscribing and leaving a review helps more investors find the show.

Instagram | Facebook | LinkedIn | X

________

Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.

A century-old tech company just took a gut punch from Wall Street. A century-old oil giant hasn't had an exciting headline in years. Ten years from now, which one do you actually want to own?

In this episode, Greg takes the long view on two very different dividend payers. The first is IBM ($IBM), a stock that ran from the low $200s to a high near $325 over the past year as its quantum computing story caught fire. It then dropped back to around $205 after disappointing contract delays spooked the market. Greg walks through why the selloff isn't the end of the story: IBM's debt has improved, revenue is growing again after years of stagnation, and at roughly 17 times earnings, he argues investors are no longer paying for the quantum computing option.

The second is Chevron ($CVX), a stock with none of IBM's drama and, in Greg's view, almost all of the certainty. Diversified across exploration, refining, and chemicals, with a dividend track record that held even when oil prices went negative in 2020, Chevron represents a different kind of long-term bet. It's not a call option on a breakthrough, but a compounding cash flow machine that is also a quiet beneficiary of AI.

Two very different companies, one shared idea: real wealth is built by holding through the boring years, not by chasing the exciting ones.

TOPICS COVERED

[00:41] Introduction: Two Long-Term Stories, Two Different Bets
[03:04] IBM ($IBM): From Story Stock to Speed Bump
[04:47] Inside IBM's Business: Software, Consulting, and Red Hat
[08:41] The Quantum Computing Bet Behind the Stock
[13:44] IBM's 10-Year Dividend Growth Math
[16:24] Chevron ($CVX): The Cash Flow Machine
[18:17] Chevron's Dividend Track Record and Financial Strength
[20:40] Diversification: Upstream, Downstream, and Chemicals
[21:15] Chevron as a Natural Gas and AI Play
[23:49] Why Chevron Over Exxon ($XOM)?
[25:45] Two Long Views, One Lesson in Patience
[28:02] Final Takeaway: It's All About the Waiting

________

📖 Free Book: Dividend Growth: The Quiet Engine of Wealth

Dividend growth investing sounds simple, but doing it well for decades is not. That’s why we wrote Dividend Growth: The Quiet Engine of Wealth—a practical guide to building a framework you can stick with when things get uncomfortable. You can get a free copy here.

📰 Monthly Newsletter: Observations on the Market

📧 Questions or comments: dcm.team@growmydollar.com

Send us Fan Mail

________

Resources:

📅 Schedule a meeting: Financial Planning & Portfolio Management
📊 Getting into the weeds: DCM Investment Reports & Models

________

If you found this valuable, subscribing and leaving a review helps more investors find the show.

Instagram | Facebook | LinkedIn | X

________

Disclaimer: Past performance does not guarantee future results. Every investor should consider whether an investment strategy is right for them and all the risks involved. Stocks, including dividend stocks, are volatile and can lose money. Denewiler Capital Management may or may not have positions in the publicly traded companies mentioned herein.