Monday, September 14, 2015

Recent buy: PM & ABT

Adding the following tomorrow morning:

ABT - $400
PM - $300

ABT yields 2.2% and PM yields 5.0%

Both are dividend champions (if you consider that they used to be part of companies that were dividend champions before the spinoff). I did not add much this week because I want to hear what the Fed has to say this week. I feel that these two companies are conservative and are high quality heading into the next FOMC. I also want to add to PM before the dividend raise announcement this week. ABT has an A+ credit rating and PM has an A credit rating.

Jefferson Research's latest quality ratings say the following about ABT and PM:

Cash flow: STRONGEST
Operating efficiency: STRONGEST
Balance sheet: STRONGEST

Earnings: WEAKEST
Cash flow: STRONG
Operating efficiency: STRONG
Balance sheet: STRONG

ABT has recently spun off so it may be hard to judge valuation and earnings compared to ABT's long historical records. Both companies will be influenced by the strong dollar but I believe in the long term both will be fine as the dollar will eventually revert to the mean.

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