Tuesday, July 28, 2015

Recent buy: UNP, UTX, MMM ...

MMM3M CO$250.00

This week was a spray across various companies I wanted to add onto. I like the undervalue of some industrials and energy stocks. I prefer to buy quality names when things are looking down. MMM and UTX have long dividend histories and are of higher quality. Same with CVX and XOM. Buying the dips, tune out the noise, & reinvest dividends.

Tuesday, July 21, 2015

Recent buy: KHC, V, ROST, TJX

Today the following were added. This week I added more low yield high growth stocks.

V: $200
ROST: $200
TJX: $200
KHC: $400

 Happy investing.

Tuesday, July 14, 2015

Recent buy: O, HCP

Today I added $1000 in HCP and $1500 in O. This will help increase my REIT exposure which was lower than I wanted. Since these companies are high yield, this amount will add around $135 in annual income.

Monday, July 13, 2015

Recent buy: KHC

Today I added $1420 in KHC to my portfolio. This new company is the result from the Kraft and Heinz merger. I am optimistic of the Buffett and 3G management and view Kraft and Heinz as two companies I will be happy to consider as core in my portfolio. I decided to add here to establish a half position and see where it goes from here.

Tuesday, July 7, 2015

Kraft Heinz Merger

Today I finally received my shares of KHC (Kraft Heinz Co.). I got one share of KHC for each share of Kraft and also I got 16.50$ per share of Kraft I had before. In total $469 of the special dividend was paid in cash to my account and I will use that to buy more stocks in the coming days. I'm quite excited about this new company and am looking forward to adding more shares to KHC.

Thursday, July 2, 2015

June 2015 Portfolio Summary

June was an interesting month. The index fell around 3% from the tip when Greece announced it was unable to pay its debt payments to the IMF. Several sectors continued to see continual declines most notably REITs and utilities. These are starting to become attractively valued after becoming severely overvalued earlier this year and I am becoming very interested in adding more to several companies I've been waiting for a long time. The drop in price comes from the expectation of a rate hike. My portfolio continues to experience new highs as my contributions greatly exceed any daily fluctuations in stock price. This will change as my portfolio grows. Eventually my monthly contributions will pale in comparison to the portfolio's total size and its monthly dividend payments; at this point market fluctuations will become more significant since my monthly contributions make little difference. The goal in financial independence is for the portfolio's monthly dividend payments to outsize one's monthly expenses.

Below is my summary of my portfolio. Overall the total value has been relatively unchanged compared to last month. This is one of the benefits of diversifying across all sectors: stability.

My financial independence portfolio comprises positions in my taxable account, 401k, and Roth IRA. My taxable account is by far my largest because I plan to enjoy my funds' dividend cash flow before I am at retirement age. The majority of my holdings have high investment grade credit ratings. Most have very long track records of paying increasing dividends. My objective is income replacement and this will be accomplished by continuously rising dividends every year from each of the positions. I reinvest my dividends in all my positions. I only purchase equities that I find attractively valued based off historical P/E or Price to free cash flow. Companies that are put into my portfolio must have strong credit ratings and dividend histories. I prefer companies that provide the world with products that everybody will use no matter the situation since this fact guarantees their cash flow. Hence, my heavy weighting in consumer staples.

Equities in green are core. Yellow is supporting and Red is speculative.
Ticker Sector Value Weight Annual Div Yield Credit
MO Staples $8,995.63 7.72% $382.31 4.25% BBB+
PM Staples $7,059.01 6.06% $348.01 4.93% A
JNJ Health $6,909.16 5.93% $210.73 3.05% AAA
KMI Energy $5,283.35 4.54% $266.81 5.05% BBB-
V Financial $5,166.43 4.44% $36.17 0.70% A+
CHD Staples $4,635.23 3.98% $75.55 1.63% BBB+
PEP Staples $4,614.87 3.96% $137.06 2.97% A
O REIT $4,649.21 3.99% $233.39 5.02% BBB+
T Telecom $4,251.39 3.65% $223.62 5.26% BBB+
ABBV Health $4,216.86 3.62% $126.08 2.99% A
KO Staples $3,679.30 3.16% $122.89 3.34% AA
GIS Staples $3,697.22 3.17% $114.24 3.09% BBB+
XOM Energy $3,449.25 2.96% $121.07 3.51% AAA
PX Materials $3,259.35 2.80% $78.55 2.41% A
MKC Staples $3,215.09 2.76% $64.30 2.00% A-
ROST Discret $2,951.92 2.53% $28.04 0.95% A-
AAPL Tech $2,803.67 2.41% $46.26 1.65% AA+
UNP Industrial $2,585.75 2.22% $58.96 2.28% A
KRFT Staples $2,506.66 2.15% $62.42 2.49% BBB
PG Staples $2,150.81 1.85% $71.41 3.32% AA-
CVX Energy $2,045.66 1.76% $91.24 4.46% AA
SBUX Discret $2,072.78 1.78% $24.46 1.18% A-
BDX Health $2,039.06 1.75% $34.26 1.68% BBB+
SO Utilities $1,986.90 1.71% $100.54 5.06% A
KMB Staples $1,945.69 1.67% $63.62 3.27% A
TJX Discret $1,849.07 1.59% $23.30 1.26% A+
UTX Industrial $1,690.59 1.45% $39.56 2.34% A
WMT Staples $1,685.45 1.45% $46.01 2.73% AA
VZ Telecom $1,606.64 1.38% $74.87 4.66% BBB+
DIS Discret $1,516.44 1.30% $15.16 1.00% A
MCD Discret $1,482.06 1.27% $52.46 3.54% A-
CL Staples $1,406.11 1.21% $32.34 2.30% AA-
GILD Health $1,260.50 1.08% $18.91 1.50% A-
HCP REIT $628.66 0.54% $38.41 6.11% BBB+
AMGN Health $566.89 0.49% $11.68 2.06% A
MMM Industrial $494.96 0.42% $13.07 2.64% AA-
….. …..2 Equity Total …..4 Annual Dividend Average Yield …..8
$110,357.64 $3,487.76 3.16%
Cash Cash $6,120.91 5.25%
. .. Equity + Cash …..22 …..2 …..

The portfolio is very close to churning out over $3600 in annual dividends. This will be a happy mark for me since that means on average every month I will receive $300 in dividends. This is already easily covering my food expenses. For the month of June I was fortunate to receive $308 in dividends. All of the cash was instantly reinvested back into the companies that payed them to empower the snowball.

The for the month of June, I removed several positions that I felt were too cyclical to my investing style. The number of positions in my portfolio is starting to exceed what I prefer to monitor. My ideal target is under 40 equities and I still have several high quality companies that I still wish to own one day but are too expensive now. I added a small position in Colgate Palmolive last month, one of my favorite consumer staples companies. I also starter position in Gilead as a speculative position.

I am currently heavy on staples and healthcare. I feel that the growing age of the baby boomer population will place great stress on our healthcare facilities and supplies. This will increase expenditures on healthcare expenses. I am starting to add more to my meager utilities positions. I see utilities as essential in one's portfolio. They may provide little growth but with dividends reinvested the utilities have outgrew the S&P500. It is the power of reinvesting the high dividend payments in low price utility stocks (which don't grow fast). In fact, the slower the utility stock price grows the better since that allows the power of dividend reinvestment compounding to have a stronger effect. The goal is share accumulation when one is still in their accumulation phase. Capital appreciation is only secondary to share accumulation and dividend increases. The consumer staples sector is my favorite because of its very predictable earnings. Even during recessions consumer staples have demonstrated that they can continue increasing earnings and dividends. Many of these consumer staples have been paying increasing dividends for decades. My portfolio's core foundation is built on names such as Altria, Pepsi, Coca Cola, General Mills, Church and Dwight, Philip Morris, McCormick, and Kraft (soon to be Kraft Heinz).

Most of my portfolio is allocated to core positions. I see this as absolutely important for anyone starting out. Only focus on the foundation before starting speculative positions which are rather unpredictable. Core companies must have solid credit ratings (BBB+ or higher), be on the dividend aristocrat list, and have predictable earnings.

Below is an illustration of each equity weighting. My largest positions are Altria, Philip Morris (spun off from Altria several years ago), Johnson and Johnson, Kinder Morgan Inc, and Visa.

Happy early fourth of July!

Wednesday, July 1, 2015

June 2015 Dividends Received

My dividends keep getting bigger and bigger each month! This is exciting to watch, although it is a very slow process that requires much patience. This month I cracked the $300 dividend received mark.

The largest payers this month are Johnson and Johnson, Pepsi, Chevron, and Exxon. All of which are dividend aristocrats with decades of dividend increases. Unlike the other companies in the list, Realty Income (O) pays monthly dividends so their total dividends received per year is also high.

My goal is to receive over $300 for all months by the end of this year. So far the last month of each quarter seems to have met that objective barring any unexpected dividend decreases.

Ticker Total Received Taxable Accnt Roth Accnt 401k Accnt
JNJ $47.68 $22.76 $24.92
PEP $34.16 $12.23 $21.93
CVX $22.59 $22.59
XOM $21.34 $21.34
SO $19.87 $19.87
PX $19.49 $7.26 $12.23
O $19.33 $19.33
CHD $18.84 $8.41 $10.43
UNP $14.63 $11.33 $3.30
MCD $12.98 $12.98
UTX $9.82 $9.82
V $9.07 $4.87 $4.20
WMT $7.92 $7.92
TROW $7.85 $7.85
LMT $7.14 $7.14
BDX $6.78 $6.78
PH $5.87 $5.87
EMR $5.84 $5.84
TJX $5.79 $5.79
ROST $5.57 $5.57
MMM $3.24 $3.24
AMGN $2.91 $2.91
$308.71 $212.37 $22.63 $73.71