Monday, March 30, 2015

Recent buy: T

An order of $500 for T will be placed tomorrow morning. The yield is around  a very solid 5.70%. This will add around $28.5 in annual dividends.

Dividend growth rate of T has been around 2% so definitely not a growth stock. I enjoy holding T for its high dividends, moderate payout ratio, and financial rating. I reinvest my T dividends so that I can get more shares of this high yielder. Any small raise in dividends is appreciated since those small raises will help buy more shares.

The price of T right now is on the undervalued side in my opinion. They will be going ex-dividend soon (4/8) so I decided to pick some up. I think T is a better value play than VZ right now so I decided to add more to T than VZ this week.

Monday, March 23, 2015

Mini buy: VZ

Will be adding $100 of Verizon tomorrow. A very small buy, but I'm just using up my monthly number of trades I get in Sharebuilder. Next week I will be adding more AT&T. Trying to save up more cash on hand so the buys are kind of small.

Verizon yields 4.43% so this will add $4.43 of annual income.

Sunday, March 22, 2015

Watchlist April targets

I am targeting purchases in April that will add dividend income in the coming May. I do not see obvious bargains at this point in time so I will focus on my dividend paying stocks in May. I have already recently topped off my allocation in MO and PM so this coming April will see a healthy increase in dividend payments.

I have filtered the US Dividend Champions list to companies that will be paying in May and will have ex-dividend in the coming weeks. These companies all have decent dividend yields and have grown dividends for a long time. Below is a low of May paying dividend stocks. I do not go over my picks just yet but these are just listed with their yields for now as points of interest.

T - 5.66%
VZ - 4.44%
Both have very high yields and strong cash flow and moats. Dividend growth on these guys is abysmal, but Verizon I feel will outpace AT&T in dividends growth. AT&T however sports a much higher yield.

EPD - 4.60%
MMP - 3.52%
PAA - 5.70%
KMI - 4.27%
EPD and PAA are getting hit by the fall in oil prices. These two will probably be more fair value buys than KMI and MMP right now.

PG - 3.04%
Currency issues makes me want to avoid PG for now unless the PE drops and the yield goes over 3.5%.

CAT - 3.45%
Again, currency issues and the fact that the oil sector is getting hurt. The yield is attractive and the PE is decent.

HCP - 5.33%
I think HCP is at fair value right now despite the possibility of a future rate hike. HCP is a dividend champion with many years under its belt. The yield is attractive at this point in my opinion.

FAST - 2.65%
Fastenal has had very impressive returns (dividends and share price growth) and has always had a very high PE. The PE right now is experiencing contraction and is lower than the historical PE. Who knows, perhaps FAST is experiencing PE contraction despite having successful earnings. I am worried about buying this stock because the PE is above my usual criteria despite the growth potential and decent yield.

These stocks I am not interested in adding to my portfolio at the moment:

Monday, March 16, 2015

Recent buy: PM

Adding $1200 in PM. PM yields a healthy 5.14% right now. This will add $61.68 in income per year and $15.42 next month. PM is around 20% cheaper than its all time high. I have a feeling that with the strong dollar, we will not see a substantial dividend increase this coming fall. However, I do feel that PM's strong cashflow is strong enough to sustain its dividend payments. A time will come when the dollar falls back, and that is when I think PM investors will reap large rewards.

Some unexpected expenses came up and I will have to dig into some of my emergency cash. Unfortunately next month will likely take a hit in terms of contributions. Such is life :(

Wednesday, March 11, 2015

Portfolio Treemap 3/11/2015

For fun I decided to plot a treemap in Google docs to see what my portfolio looks like in terms of company allocation. I always have a pie chart available in my spreadsheet but a treemap just looks much more interesting.
I really would like to expand my REIT and utility holdings but right now is not a good time to buy in my opinion due to the coming interest rate hike.

Monday, March 9, 2015

Recent buys: MO, PM, TROW


This will add $200 to my annual income. These stocks were purchased before their ex-dividend date and they pay in April so I will be able to collect an extra $50 immediately next month. TROW will also pay a special dividend next month.

I plan to add more PM next week when I get more funds. PM's ex-div date is March 24. MO's ex-div date is on the March 12, so MO was the earlier purchase. Hopefully PM falls more by next week :)

Saturday, March 7, 2015

Watchlist March

There is not much of a watchlist this month to get excited about. The market is undergoing PE expansion and I am having a hard time finding deals. I personally want to avoid the oil sector for now.

Some names I am currently watching:
Check out the utility chart page to see their recent declines:
I believe the price will fall further. The fall currently is in anticipation of interest rate hikes. When interest rate hikes do happen there will be a sell off which will be my buying opportunity.

Since next month is April, some stocks' ex-dividends are coming up. These include:

I will most likely add more to these positions in the coming week. Of the list above I would say PM is undervalued and KO is fair value. WMT has a pitiful increase in dividends this year but I still believe in their business, which still churns out revenue even during recessions.

In the industrial side I am finding the following stocks interesting:

CAT and EMR are cyclical and are experiencing cheaper prices due to the fall in oil prices. These stocks have been paying dividends for decades, with EMR being a dividend champion. Both have dividend yields over 3%.

CSX has railroads in the east of the USA. I currently hold UNP which operates on the west side of the USA. Having CSX will complete my holding of railroads in the entire USA. I believe CSX is approaching fair value.

LMT has been on a large climb, but that was because of their PE undervaluation years before. Now LMT is sitting slightly above its 15 year PE average. The PE of LMT compared to the other stocks I am looking at is also lower. LMT has a PE of 17.83 and a forward of 16.06 which doesn't look too bad in today's high PE environment. GWW is sitting below fair value right now and is an interesting addition to my industrial holdings. GWW has a low yield but a high growth, very low debt, strong credit rating, and dividend aristocrat status.

Feburary 2015 Portfolio Summary

As of March 5, 2015 my portfolio stands as the following.

Ticker Sector Value PE Yield Annual Divs Beta Weight Credit
DIS Discretionary $1,402.75 23.63 1.08% $15.15 1.20 1.49% A
MCD Discretionary $1,510.13 20.69 3.41% $51.50 0.37 1.60% AA-
ROST Discretionary $2,497.44 23.88 0.76% $18.98 0.78 2.65% A-
SBUX Discretionary $1,697.81 28.40 1.36% $23.09 0.78 1.80% A-
TJX Discretionary $1,888.31 21.78 1.02% $19.26 0.65 2.00% A
CVX Energy $2,186.90 10.38 4.07% $89.01 1.15 2.32% AA
KMI Energy $3,305.91 42.80 4.38% $144.80 0.64 3.51% BBB-
XOM Energy $2,540.98 11.45 3.15% $80.04 0.88 2.69% AAA
V Financial $2,382.06 30.66 0.70% $16.67 0.80 2.53% A+
ABBV Healthcare $488.49 54.20 3.42% $16.71 1.27 0.52% A
BAX Healthcare $1,810.22 19.50 3.00% $54.31 0.70 1.92% A-
JNJ Healthcare $6,361.58 17.95 2.74% $174.31 0.57 6.75% AAA
CAT Industrial $815.42 14.11 3.38% $27.56 1.66 0.86% A
EMR Industrial $725.89 18.53 3.22% $23.37 1.29 0.77% A
LMT Industrial $529.31 17.83 3.00% $15.88 0.64 0.56% A-
PH Industrial $1,150.19 17.02 2.04% $23.46 1.66 1.22% A
UNP Industrial $2,019.29 20.60 1.86% $37.56 0.93 2.14% A
UTX Industrial $1,492.80 17.84 2.10% $31.35 1.12 1.58% A
PX Materials $3,496.88 22.52 2.22% $77.63 0.82 3.71% A
HCP REIT $727.10 21.76 5.35% $38.90 0.46 0.77% BBB+
O REIT $4,027.38 50.05 4.49% $180.83 0.45 4.27% BBB+
CHD Staples $4,806.27 28.40 1.57% $75.46 0.44 5.10% A-
GIS Staples $3,438.60 22.38 3.07% $105.56 0.17 3.65% A
KMB Staples $1,962.41 28.34 3.19% $62.60 0.20 2.08% A
KO Staples $2,602.67 27.01 3.07% $79.90 0.49 2.76% AA-
KRFT Staples $1,801.63 36.87 3.45% $62.16 0.76 1.91% BBB+
MKC Staples $3,010.00 22.46 2.13% $64.11 0.57 3.19% A+
MO Staples $5,446.75 22.05 3.68% $200.44 0.50 5.78% BBB+
PEP Staples $4,752.09 23.10 2.66% $126.41 0.44 5.04% AA-
PG Staples $2,272.84 25.05 3.02% $68.64 0.41 2.41% AA
PM Staples $3,019.82 17.30 4.84% $146.16 0.90 3.20% A-
WMT Staples $922.20 16.71 2.35% $21.67 0.46 0.98% AA
AAPL Technology $2,856.63 17.43 1.45% $41.42 0.85 3.03% AA+
T Telecom $2,790.87 28.92 5.46% $152.38 0.39 2.96% A-
VZ Telecom $1,268.40 19.66 4.44% $56.32 0.39 1.35% BBB+
SO Utilities $1,128.75 20.52 4.65% $52.49 0.09 1.20% A-
….. …..2 …..3 …..4 …..5 …..6 …..7 …..8 Credit
Cash Cash $9,158.17 9.71%
. .. Total Yield Annual Divs Beta Avg ….. …2
$94,294.95 2.91% $2,476.08 0.64

The portfolio sits really close to my first large goal of $100k. That will be my first large milestone in the journey to $1m. I used to make fun of the dividends I receive every month, but at this amount the dividends are starting to make a noticeable difference. After $100k, my portfolio can start doing work on its own. An 8% capital gain on $100k is $8,000. A 3% dividend yield on $100k is $3,000 a year or 250 a month. A 10% increase in dividends on a $100k portfolio @ 3% yield will be a $300 raise. The portfolio is currently around 22% higher than the goal I set last year. I have been able to contribute more than I had planned last year.

As shown in my portfolio, my focus is on buying high quality at a fair or discounted value. Stocks in green are core, yellow is supporting, and red is speculative. The ratio is currently 59/15/16/10 core/support/spec/cash. Nearly all of my holdings are above investment grade (BBB+ credit rating). My goal is to maintain a 3% yield by mixing higher yielding slow growth stocks with fast growing low yielding stocks.

The sector distribution is now more towards my liking. The sector that is still severely underweighted is utilities and REITs. A time will come when interest rates are raised and these stocks are undervalued. For the time being, many of the companies I want in these sectors are severely overpriced (AVA, PNY, XEL, WEC, D, DUK) (O, HCP, HCN, DLR, NNN, UHT, VTR). My emphasis is on over-weighting the Staples sector. My cash holdings is currently high since I cannot distribute cash fast enough since I cannot find obvious deals. I have not been completely happy with my recent buys since my purchases were all at fair value or slightly above fair value. The stock market is currently experiencing PE expansion and that unsettles me. I rather see a dropping stock market than an increasing one.

The consumer discretionary sector has been performing very well lately in my portfolio. ROST and AAPL are my best performers so far.

The dividends received last month is a large increase compared to my start last year in March 2014. I believe I can crack the $200 barrier in the coming months. All of my stocks are reinvested into the company that payed the dividends. The forward dividends are actually much higher than what has been received. This is because the shares I have bought recently do not register until the next ex-dividend date.

February 2015 Dividends Received

I realized I haven't been blogging the stocks and dividends received per month. Well, in an effort to keep track I'll start doing that now!

T $25.94
GIS $15.58
VZ $13.91
AAPL $10.34
KMI $35.82
PG $12.23
SBUX $5.76
O $15.00
HCP $9.61
Total: $144.39

My forward dividend outlook for February is estimated to be $183.91. Some of the purchases I made in January were made after the ex-dividend dates so those shares did not register :(

Tuesday, March 3, 2015

Recent buy: PX, CAT, LMT, PM, KO

Added the following:

PX: $2194
CAT: $820
LMT: $530
PM: $250
KO: $350

Total income added is around $115.17