February Portfolio Highlights

February was a busy month!  Many companies issued earnings that were slightly below analysts estimates.  Personally, I like to see the overboard selling reactions to these reports for companies that are on my watch list and in my portfolio.  Taking a long term view and investing for the future.  In ten years will it matter if one of the companies missed a quarterly earnings release by a few pennies?

I took advantage of some of the craziness and added to several positions (WMT,KO,PEP).  I feel like all three of these companies are poised for growth going forward.  KO and PEP are continuing productivity initiatives and Walmart is going to increase it’s US capex.  I feel like these companies are being good stewards of the money they create and making choices to enhance shareholder value.

I initiated a position in TGT in late January.  The company continued to decline throughout most of February, so I took advantage and slowly added a small amount of cash at several points throughout the month.  This position is in my loyal3 account, this enabled me to trade commission free and add smaller portions at a time.   I feel like TGT got beaten down enough for the data breach and sales suffered after that was disclosed.  The unfortunate thing is that data breaches are going to continue to happen.  One must monitor their credit report diligently.

Dividends
I received $229.32, which was an amazing improvement over last years total of $80.28. At this point last year I was in the process of transforming my portfolio from growth to dividend stocks. It took me over a year, but the results are starting to speak for themselves!

Dividend Increases
Seven companies raised their dividends for me:

  • CSCO : 11.7%
  • DPS    : 7.9
  • HAS    : 8
  • KO      : 8.9
  • LO      : 11.8
  • PEP    : 15.4
  • WMT  : 2.0

Strong raises across the board, with the exception of Walmart. They have been having a tough few quarters and I am not concerned with a small increase as long as they set themselves up for future growth (which they indicated they are by increasing capex this year).

New Positions
While I did not open any new positions, Vodaphone(VOD) paid me a dividend in the form of Verizon (VZ). VOD executed a 6:11 share split at the same time. Thus, my 65ish VOD shares turned into 35 VOD and 17 VZ. VOD pays the same dividend and VZ becomes a new income stream for me, adding $36 per year to my income. I look forward to the special cash dividend on March 4th, where it will be dripped back into VOD.

Added Positions
This month proved to be a relatively good month for adding to investments, the following positions were increased:

  • New Cash: COP, KO, MO, PEP, PM, TGT
  • Drip: ARCP, APD KMI, O, OHI, OKS, PG, T, VOD

All of my positions in my Roth are dripped and prior to the middle of February my taxable account was as well. In general, the taxable account will not be dripped going forward, but specific securities may be.

Dividend Decreases
None.

Sales
None.  This is great and a stark contrast to the way it used to be.  One average, I probably sold one position per month, this resulted in a lot of portfolio churn and lost money in both commissions and invested capital.  I hope this continues to last a long time, although INTC is on the potential chopping block if they don’t start to turn around by the end of the year.

Conclusion
A great month, I hope these continue. The third month of each quarter is generally my largest, so I am hoping to break some more records next month!

Over the next twelve months I expect to receive at least $3767.10.

Disclaimer: Long all stocks mentioned.

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5 Responses to February Portfolio Highlights

  1. Hi Grampa,

    what do you think: Is WMT better or TGT?
    Or have this companies a different business?
    From my view from Germany, they are both Shopping-malls…

    Best regards
    D-S

  2. ILG says:

    Hi D-S,

    By and large Target and Walmart sell the same things in the US. The differentiation between each can be found in the clients they are trying to attract. Target has a reputation for having nicer and cleaner stores, while being a little more expensive than WMT. The goal is to attract more affluent customers, while Walmart is trying to attract price conscious/constrained customers. Hence their comments in the latest earning release about revenue being hurt by cuts to US safety net programs.

    As for which is better, it depends on what your goals are. WMT in my opinion is more like a bond, its price hasn’t appreciated much over the last decade, but its raised its dividend regularly. Target is trying to expand into other countries (WMT is in 26) and I think over the next few years as they iron their growing pains will grow faster than WMT.

    I hold both for the diversity of their customer base, WMT for its stability and i’ve added TGT for its growth.

    What do you think?

    Gramps

  3. Thank you very much for the explanation!
    In Germany I have never seen a Target-Market!
    But if things are so, then I would divide my money on both companies!

    Best wishes!
    D-S

  4. ILG, you should add a dividends page that tracks your monthly dividends! Be great to follow along and see how your dividend income is growing over time.

    • ILG says:

      Thanks writing2reality. That is a good idea. I keep all the information, but hadn’t thought about including it!