February Mid-month Update

February has been a quiet month on the investing side of things.  I have been reading, checking earnings reports and staying abreast of the news for the various companies I have a stake in.  I haven’t really seen much that has been troubling to me.  The stronger dollar continues to hit some of the companies with more international exposure and be a boon to some that don’t.

Twitter!

I am not really a social media person, but I decided to create a Twitter account and see how that works out.

Recent Purchase

I have been adding to companies that I own for the last few months.  I have been doing this because I am the most familiar with those companies and value in the market has become a little bit stretched.   I have identified a few companies I would like to start a position in, but need to first determine what I think fair value is and go from there.  Before the end of the month, I plan on making a post about one of those companies and provide insight into how I make buy/don’t buy decisions.

However, I have added to Johnson and Johnson (12 shares@100).  I have wanted to add to JNJ for some time,  as my last non-drip purchase was 12/20/2012.  The price has come down somewhat and I felt that it was as good a time as any to add to it.  The price is basically around fair value in my opinion, which is about as good as it gets right now (aside from the oil market, which I have a large allocation to right now).

Why JNJ?

It’s not necessarily JNJ, but the type of stock that it is.  Right now, with the markets at all time highs, I am doing my best to make purchases that are “safe”.  By “safe”, I mean investments that are less likely to loose all the money that is invested.  Companies like JNJ (PG, XOM too) that have paid dividends for a long time, have wide moats and provide services that can be described as necessities in all business climates (expansion/recessions).

Currently, JNJ pays out 2.80 in dividends per year.  In the last 10 years, JNJ has had more Free Cash Flow(FCF) than their current dividend (lowest was 2005 with $3.07 per share).   Currently, they are on pace to have even more FCF this year then last.   They have well managed debt with Debt/Equity ratio of .17 and an Interest Coverage Ratio of 40!  Debt is something that is easy to have a lot of when times are good, but then can be a millstone during harder times.  Revenue has been growing fairly steadily over the last decade and should not disappoint at the end of the fiscal year.

These are just a few numbers, but looking over the earnings reports and additional financials solidifies my rational for adding to this position at this time.  I don’t expect to be surprised by anything with JNJ over the next year, so it’s as good a time as any to add.

Depending on how things go, I may add to this position next month during my next purchase.

Happy Presidents Day!

I hope everyone has a safe and happy holiday.  Hopefully you have the day off and the sun will be shining!

Take care!

Disclaimer: Long, JNJ, PG, XOM

January Highlights

January proved to be a fruitful month for me.  I made some investments, crossed some goals off the list and watched as a variety of news hit the various companies I have ownership in.

A few themes that have emerged during earnings season are the appreciation of the US dollar and the concern for Oil. Several companies I own (PM, MSFT, PG) have had issues with currency impacts to EPS.   This doesn’t worry me overall, the dollar rises and falls over time.  In fact, I wouldn’t mind a few shorter minded folks to sell out of these shares and allow me to pick up a few at cheaper prices.  I am looking specifically at JNJ and PG.

I am having a hard time not pulling the trigger on more Oil stocks.  I have XOM and CVX on my mind and may end up buying more or each depending on how earnings go.  Both of these are investments I am willing to hold for a long time, so maybe a bad earnings report would make me happy right now…

Roth Purchases

As described earlier, I fully funded my ROTH for the year.  I made these purchases near the beginning of the month and apparently that was right before REITs decided to take off.  DLR, O and OHI have returned ~12, ~15.5 and ~15 percent so far this year.  That’s pretty nuts for any asset class, unfortunately I am not sure these can be considered bargains.  I am planning on holding off for the time being on adding to my REIT positions.

New Purchases

About a week ago I added another 22 shares of EMR to the family.  I have been reading over EMRs recent results and I am pretty pleased overall with their performance and direction. The ~9% recent raise didn’t hurt either.  EMR is currently at a better price than my purchase and if it falls to the low 50s, I will probably add another 20ish shares.

In my Loyal3 account I had $19 and used an additional $50 out of the spending budget (I talked myself down from $100) to invest in UL.  This bought me about 1.4 shares.

Raises

It was a month of small raises.  KMI and OHI raised both of their dividends by a penny, following a trend.  I am happy that KMI is raising it slowly, I know there is a lot of eagerness for the $2 dividend that was promised after the merger.  However, the market is a little rough and it seems prudent to be more patient.  I expect both of these companies to continue raising by at least a penny over the next 3 quarters.

O raised their dividend by 3%, this was the largest raise since 2013.

NSC raised their dividend by 3.5% (2 pennies).  I would expect them to potentially raise it once more this year.

Dividends Earned

I earned a total of $330.77, which is 37% higher than last January ($241.09).

$330.77 of $5750 (5.7% accomplished)

Forward Dividends

At the start of the month, my 12 month forward dividend was $4761.37 and ended up at $5103.66.  My future income is 45% higher than this time last year.  Which is great YoY, but growth like that won’t last.

My goal is to increase this to $6100 (increase of ~1339).  I am 342.28 of 1339 or 25% of the way there.

Fitness Goals

I have run at least a mile every day in January (or up to this posting).  Feeling great.  Weightlifting is on schedule, my first lifting cycle is complete and I am in an active recovery till February 2nd, when cycle 2 will commence.

Conclusion

January just hummed along.  No hiccups, I didn’t get any large raises, but all the companies who raised will most likely raise again before the end of the year.

Disclaimer: Long KMI, OHI, NSC, DLR, O,  XOM, CVX, EMR, UL

Roth IRA Purchases for 2015

I have finished contributing to my Roth IRA for 2015 and invested the money into securities.  I prefer to be fully invested in my ROTH and make my purchases as quickly as possible.  I can’t say why I prefer to do it this way, but I just feel like it I guess.  The contributions for this account were accumulated last year, with a little arriving in my first few paychecks of 2015.

Criteria for this year

I wanted to avoid adding to my oil positions at this time, due to my Black Friday purchase.  Prior to my investment, my ROTH was paying me a little under 2k in dividends.  I choose to reinvest these automatically because I would rather not wait 6 months between investments, I may reconsider this strategy once I am collecting around 1k per quarter.    The following is the criteria I wanted:

  • High yields or high dividend growth.
    • Since I am reinvesting I wanted to make the most out of compounding
  • At least one REIT purchase
    • I want a little more of my portfolio in REITs after I sold my ARCP a few weeks ago.
  • As Blue Chip as possible
    • I am fairly protective of the cash in my ROTH.  This vehicle grows and will be withdrawn tax free, so I want to preserve it as much as possible
  • Add under represented sectors

Purchase

Company Shares
PM 12
KMI 25
OHI 30
T 30
VZ 27

For an additional income of about 278.

I chose a combination of high growth rate dividend payers (PM, KMI, OHI) and higher yield but slow (T,VZ).   I think this will give me a solid income base over the next several years.

I did end up adding to KMI because I think that the company has great prospects going forward (in spite of oil) and wanted to add a few additional shares.  I gues

OHI has been doing very well as of late and they are on my short list of REITs that I feel comfortable with.  OHI works in the healthcare segment, which adds tangentially to the healthcare portion of my portfolio (JNJ is a little pricey, but BAX may be worth buying).

PM is my largest position both in dollars and in dividends, but I wanted to take the opportunity to lower my cost basis.

VZ,T are more like utilities to me and they were added to increase my exposure to the telecommunication industry.  They both have low dividend growth rates, but because they are being dripped the high yield +dividend growth will increase the income from each by 7-8% per year.

This increased by 12-month forward dividends to ~5040.

Disclaimer: Long PM, KMI, OHI, T, VZ, BAX, JNJ

Black Friday Oil Blowout!

Happy Thanksgiving everyone!  I hope you had a great time with your friends/family or whatever ritual you follow for the holidays! My ritual involves spending a week with my family and using the computer as little as possible.

After a relatively peaceful week, I turned my attention to the OPEC meeting that was occurring over the last few days.  I was waiting to see what the decision was regarding whether or not they were going to cut production.  There is quite the oil glut on the markets right now.   I didn’t really expect any cut because of the pressure that Saudi Arabia wants to put on the US drillers in Texas and North Dakota.   Plus, the other OPEC members that want a cut in production Saudi (the biggest producer) doesn’t like.  So, what happened?  As expected, the production of oil didn’t change and the price of WTI crude fell.

Sure enough, there was plenty of blood in the streets.

Black Friday Purchases

Company Shares Income!
BBL 25 62
BP 25 60
COP 20 58.4
CVX 10 42.80
XOM 11 30.36

I added to all of my oil positions besides KMI.  I was somewhat disappointed that it didn’t take as big a hit as the other companies, but there is plenty of time.  I used funds that have been left over from purchasing my house.  I could have bought more, however I plan on using that cash to buy on dips and for any house emergencies that occur.  I will slowly deploy all that capital as the cash in my house fund grows from my paychecks.

Additionally, my biweekly purchase of $200 occurred in my Loyal3 account on Wednesday.  I purchased 4.08 shares of Unilever.  This added approximately 6.6 to my income.

Over the last week I added $260.15 to my 12 month forward income, which now stands at $4884.15.

Conclusion

Was today the best day to buy oil stocks?  Could macro factors make a better price tomorrow? Yes and Yes, but there is no time like the present.    The price of oil does affect how profitable these companies are, but all of the companies I bought have been around when oil prices were low.  I do not expect the price of oil to destroy or adversely hinder any of the above.  Today was a great buying opportunity and I took advantage of it.

Did anyone increase ownership stake in an oil companies?

Disclaimer: BBL, BP, COP, CVX, KMI, UL, XOM

Recent Buys

The market and my activity have been rather quiet during the month so far.  Loyal 3 recently announced that they will no longer accept credit cards, this news is less than a week old and spread like wildfire.  I am sure you have probably read about it somewhere else!  Not to worry though.  They remain cost free at the moment and you are able to transfer money to and from a checking account to them.

I have continued to invest 100 per week into the account and will try to do so for the remainder of the year.   I have focused my buys for the month on two stocks UL and MAT.  I have added 150 (including this weeks) to those positions.  These new investments will add around 14 to my dividend income for the year.

A new company joins the family!

I have been looking to add additional diversification to my portfolio for a while.  My current portfolio has a significant amount of Consumer Cyclical/Defensive and Energy.  These make up the largest by both sector and dividends.  I have been doing research (when able) on trying to find some good companies in the Basic Materials and Financial sectors.  My allocation was further skewed by the steep drop in oil companies and my subsequent additional share pickups of (BP, CVX and XOM), while being only slightly offset by a purchase of AFL.

Sector Breakdown

Dividends by Sector

After doing my research and finding another company that sold of sharply recently, I decided to pull the trigger and add a half size position of BBL.  I bought 30 shares at about 54 and that will add ~74 dollars to my 12 month dividend income.   BBL adds the diversification that I need in a variety of Basic Materials and geography.  They are planning on spinning off some of their mine assets, but I like the business with or without those assets.  This will make a great addition to my portfolio and will join APD in the Basic Materials sector.

After these purchases my income is now at $4650.10 for the next twelve months.  I am continuing to march steadily upward.

Conclusion

The market is providing some good chances to deploy capital and in a few days I will have enough to potentially make another purchase by the end of the month.  All is rather quiet right now and I am trying to decide what my next addition will be.  A few compelling opportunities right now are EMR (recent raise of 9.3%),  BBL and BP.  I have also been looking at T. Row Price and like what I see there.  A very solid company with a long dividend history.

Disclaimer: Long EMR, BBL, BP, UL, MAT, AFL

Recent buys of the last few weeks

Wow… October is almost coming to a close and I have been busy. I meant to have this out a few days ago, but my parents surprised me by coming out to visit! So my weekend plans changed on a dime. I had a great time and it was worth deviating from my usual routine.  Work has been nuts.

I haven’t been able to comment as much as I would like, but I thank you all for stopping by! I’m still lurking.

Goal almost made!

I had been training for a half marathon and it took place last weekend as well. I ran a very good race and ended up a few seconds short of my goal of under 1:30:00 ( I ran 1:30:01!) How about that. I don’t feel bad about it at all.  I beat my previous Personal Record (PR) by 4:39, which is crazy and I averaged under 7 minute miles for the entire race.  Both are pretty fantastic accomplishments.

Purchases

Mr. Market has been kind during October, I was very active at the beginning of the month.  After a few weeks, I found chose a few other positions to add and initiate.  Here’s how the last few weeks went for me.

Company Shares Income ($)
AFL 20 29.6
BP 25 59
MAT 4.1951 6.38
MCD .2739 .93
UL 3.7062 5.63

For a total of $101.54 to my yearly income. I have had a great month. I am glad that I had some time to do a little research to determine that BP would fit into my portfolio nicely and that I got to add to my AFL stake.

Going forward

I have continued to add to my Loyal3 account with weekly purchases and I do not expect that to stop this week.  I will make another purchase in a few days.  A few potential opportunities have opened up in both KO and MCD, but others still exist with UL and MAT.  I will see what I feel like, maybe even buy a little more than usual. (Loyal3 purchases come out of my budget).

I should have enough funds by the end of the week/early next week for another purchase through both dividends and capital infusions.   I have my eyes on a few companies to add to my portfolio. Foremost on my mind is IBM and WTR.   I have adopted the DGI strategy, but consider myself a seeker of value.  IBM seems to be presenting me an opportunity for with both respects (BP does as well).  Enough for tonight!

Take care!

Did you find an opportunity in the market over the last few weeks?

Disclaimer: Long AFL, BP, MAT, MCD, UL, KO, MCD

Recent Buys

It has been an interesting weekend to say the least!  Dallas had a quick but powerful storm Thursday night.  Gusts of 100 miles per hour!  I ended up loosing power and didn’t have any until late Sunday night.  As strange as it may sound, I had a pretty good weekend without it.  I spent lots of time outdoors, used a lantern, hung out with some friends, climbed a tree and cleaned up plenty of debris.  The wind even did me a favor and blew down a rotten portion of fence that I had been meaning to tear down and replace.   A few caveats though, it was a very cool weekend and I had hot water.  If it had been a month ago and this had happened, I may have been singing a different tune.

Purchases

Company Shares Income!
CVX 10 42.80
K .8169 1.60
MAT 1.5822 2.40
XOM 12 33.12

This adds a total of 79.92 to my yearly income.  Which brings me to about 4,435.  Well below my goal of 5k, but the year is not over yet.

Buying some oil stocks

Oil has had a rough quarter.  The price of oil has fallen steadily over the last quarter, most of my oil companies hit a high around that time and then are steadily falling.  I took the opportunity to add to both XOM and CVX.  I had wanted to add to XOM recently and I took advantage of the price weakness of CVX to add another bite to my overall portfolio.  CVX is one of my larger positions so I may wait a while before I add to it again, unless of course Mr. Market provides me with another shot.

Mr. Market starts to deflate a bit

I am happy to see the market slowly down and even falling a bit.  I have a few other positions I want to add additional funds to.  They include:

  • PG
  • UL
  • COP
  • BAX
  • JNJ
  • AFL

A pretty solid basket right there.  I am looking to add to those(some) positions in probably the next month.  I may get a little more aggressive with some backup funds depending on what happens over the next few months.  There is no time like the present, so I plan on spending some time over the next few weeks looking over my positions and ones I do not currently own.  A few I do not own that are on my radar are:

  • ADP
  • GPC

I am looking to add a little higher growth to the portfolio in the 2.5 to 3.5% yield range.  My YoY increase is a little lower than I would like, so I will probably be looking for positions that are growing dividends at the 8+% range.

Happy buying!

What are you considering buying?

Recent Purchases: Sept 9th to 18th

It has been a fairly active investment cycle over the last couple weeks.  I finally acquired enough cash in my investment account through dividends and additional contributions to buy another position.   Here are my trades over the last few weeks.

Loyal3

Each week on Thursday I try to make several small buys in the range of 25-50, depending on where I am budget wise for the week.  The goal is to invest 50$ at a minimum.  So I have been able to do this consistently over the last few weeks.    I place my trades Thursday evening and they execute on Monday.  It is always nice to start the week off increasing my dividend income!  Lets see what I bought

9/8/2014

WMT : .3263 shares @ 76.6
MAT: .7139 shares @ 35.02

9/15/2014

UL: .5726 @ 43.66
K : .3924 @ 63.71

9/16/2014 Bonus!

This last purchase was possible due to dividends I have collected in the account since my last order.  The 25$ went to…

DPS: .395 @ 63.16

Small purchases, but they will make a difference over time.  Even though my funds aren’t accumulating as fast as I would like right now, being able to buy a little each week is good to do.

For the remainder of the year, I will invest as little as 100 per week.

A full purchase of…

General Mills (GIS). I bought 20 shares at 51.22 yesterday.  I like GIS here and had wanted to increase my position (as I have been doing with others over the last few months).  General Mills is struggling a bit, but through signing new deals (Yoplait with MCD), buying other businesses (Annie’s Homegrown) and cost cutting measures,  I think they will continue to do what they have been.  Maybe a few rocky quarters, but over the long haul I am happy with their prospects as well as their financials.

A random opportunity…

I recently purchased a house and placed a sizable amount of money in the House account to cover about six months worth of interest, principal and insurance.  This account has an interest rate of about “ridiculously terrible”.  I was loosing out to inflation by probably 3%.   About 2 weeks ago, I received an email inviting me to open a CD with a 5% APY (Or 4.88% interest).  After pondering this opportunity, I chose to use half of my funds in the house account to fund the CD.  There is not really a downside to this for me.  Worst case, I have to break the CD and loose some interest and best case I make 4.5% more interested over the life of the CD vs keeping it in a savings account.  Now, I suppose your wondering how long did I have to commit to in order to get a rate like that?  Well, the answer may surprise you, the life of the CD is only 1 year!

This is a good opportunity because I wasn’t going to invest the money anyway, it is still in an insured product and beats out on the interest of the savings account.

Back to being busy

Well my few weeks of not working a lot are over.  I will probably be working somewhere in the neighborhood of 60 hours per week.  The bright side is that I will be giving myself a 50% pay raise over the next three months!  My plan is to direct most of the additional funds to investments.  Fortunately, getting a little bit larger pay check doesn’t encourage me to spend more!

Take care!

Disclaimer:  Long GIS, MCD, DPS, K, UL, WMT, MAT.

Recent Purchase: GE and a Blog Roll!

GE Purchase

The market has been on a slow but steady upward path over the last few weeks, with the occasional dip for a day.    In light of this, I had some time to do some research and came to the conclusion that General Electric would be a good candidate for my portfolio.  It helps diversify my portfolio and I feel like they have learned their lesson with the GE Capital debacle a few years back.

Thursday I pulled the trigger and bought 50 shares at a cost basis of 27.25.  I could have waited and bought for a lower price, but if I could tell the future I would have been a millionaire a long time ago =)  Even though the market is higher than I would like, I still want to make sure I purchase(add) at least 1 to 2 positions a month.  This does not account for any Loyal3 purchases through savings in my budget and dividends paid in that account. Those will be invested ASAP.

GE and I have a little bit longer history than a few days.  I purchased GE back in 2008 during the financial crisis not long before they cut their dividend and dropped in price.  I luckily sold the position for a minor loss prior to this event.  What was the catalyst you wonder? Did I do my due diligence and realize a dividend cut was coming?  Well no, I had some qualms about who they were doing business with at the time and fired them from my portfolio because of that.  It was fantastic timing, but had nothing to do with what was about to happen.

GE has been on my mind lately.  With doing all the housework and wondering what type of energy efficiency efforts I could make.  The first time that comes to mind is to change the light bulbs.  GE invented the light bulb back in the day, what a bright idea!  Luckily, the previous home owners were fairly energy conscious so I don’t have that many bulbs to change.  Plus, I am probably going to wait until they start to burn out, why spend money until you have to?

My house was built in 1955 and updated at some point in the past.  No idea, but I know that my HVAC system (air condition/heater) is old and will probably need to be replaced in the next few years, as well as the oven.  Luckily, GE makes a wide variety of Energy Star related products for the home consumer.  Including fridges, ovens and air conditioners.

On the business side, I thing GE (as well as other industrial/technology companies) are posed to do well as the economy picks up and companies reinvest in their businesses.  The economy is going well around here and my company is pretty close to a refresh cycle on their PCs and there is a lot of construction in my area.

GE itself is very diversified.  They have their hands in Healthcare, Software, Oil &Gas, Power generation (Wind turbines! Going up like crazy in West Texas) and much more.

Even though GE has been on my mind.  It has met my entry criteria and subsequent analysis.

  • Dividend growth: > 3years
  • Dividend yield: > 2.5
  • FCF Payout Ratio: < 60
  • Net Issuer of Shares? : No, buying back.
  • PE < 20: Yes, 18.99
  • Debt?: Looking good. Long term debt has been dropping over the last 5 years.

Revenue Concern

Revenue has held pretty steady over the last three years.  I would like to see this rising, but I am not concerned enough to avoid a small position at this time.

Blog Roll

I have added a Blog Roll.  These are the blogs I follow and read regularly, even if I don’t do much commenting.  I haven’t fully completed the list, so I will be adding more as time allows.  Instead of doing an analysis of GE above, I thought I would include some of my favorite bloggers posts.  I use these to expose me to different dividend stocks.  I do not however, use these as a sole source of information or to make a decision.

Dividend Mantra: A little older post, but a good one

Compounding Income makes another weekly purchase of GE.

The Dividend Engineer provides some useful information about GE.

Time for painting.

Well, I would like to continue pointing out some great blogs and talking about stocks, but I got fed up with some of the dings in the walls the previous home owners left and I am in the process of painting the bedrooms.  I started last weekend, did nothing during the week and need to finish up today.  Otherwise, I will continue sleeping on my couch, which is comfy but it would be nice to actually use those rooms and all.

Take care!

Disclaimer: Long GE

Tagged

Loyal3 Purchase: TGT, MAT, MCD, UL

The house is moving right along.  I had a few extra dollars from the budget and so I decided to use it to add to a few of my existing positions in my Loyal3 account.

Changes to purchases

Recently Loyal3 changed how you can buy with a credit card.  You are able to buy up to 2500 dollars of an individual company per month.  Now, the total amount is the same, but if you use a credit card you can only buy in 10, 25 or 50 dollar lots.  I’m guessing people were taking advantage of the credit card rewards of several percent and then selling the stock quickly.  This would increase the transaction cost to Loyal3 and goes against the purpose of the brokerage.  They want to foster long term ownership and brand loyalty.

I added $25 to…

Mattel (MAT):  .6447 @ 38.77 (Executed on May 19)

Unilever (UL):  .5453 @ 45.84 (Executed on May 19) – I had erroneously stated that my only exposure to products of consumer goods was PG.  UL is one of my positions that I forget I have, along with EMR and LEG.

McDonalds (MCD): .2445 @ 102.22 (Executed on May 19)

Target (TGT): .4403 @ 56.77 (Executed on May 21)

I actually goofed and used my bank account for the TGT transaction, which takes longer to execute. In this case it benefited me because TGT had a reasonable drop from May 19 to 21.

Goal going forward

I am planning on trying to use 100 dollars each month from my budget to add to my Loyal3 positions.  I feel like this is possible and probably not much of a stretch goal.  I will probably not worry too much about portfolio weight, value or dividend yield when picking among my positions in the account.  The 100 dollars will be split anywhere from 1-4 companies.

I had added the goal to my goal pages and will update my positions page to reflect the new shares at the beginning of June.

Disclaimer: Long EMR, LEG, MAT, MCD, PG, TGT, UL