Monday, August 1, 2016

July 2016 Portfolio Summary

The objective of this blog is to generate multiple sources of income to the point that the money flow is more than enough to support my annual expenses. At the moment, I am primarily reliant on my professional job to pay for my food, housing, and other bills. I take a large chunk of each paycheck and invest them in income generating assets. The focus of this blog is on dividend paying stocks with reputable track records. These are known as dividend aristocrats, companies that have paid increasing dividends to shareholders for the last 25+ years.

The portfolio I hold emphasizes earnings consistency, anti-recessionary businesses, dividend consistency, and strong financial credit ratings. My favorite industries are in the Staples, Healthcare, and Utilities businesses. These businesses offer products and services that everybody needs in order to live a modern lifestyle. In recessions, people will still use the bathroom, eat food, and pay for electricity. I want to have income generated from these types of businesses since they have a higher guarantee on dividend safety and dividend growth. In the past recessions that have hit the world, many of the companies that have went bankrupt or nearly collapsed offer products that nobody "must have". These can include subprime lenders, restaurants, theme parks, movie theaters, coffee baristas, auto manufacturers, jewelry, and home builders.

At the time that I am writing this post, the S&P500 has hit an all time high. Even after the Brexit drop, the S&P500 was relentless in climbing back up. We have broke the resistance levels that have kept the market range bound for the last 2 years.



The market is indeed expensive. However, I will continue to add more to companies since my focus is more on acquiring income instead of timing the market for capital gains. If my holding falls in share value, I am not at all concerned as long as their income continues to grow. Since my time frame is in 30+ years, I do not plan to sell my holdings and am only concerned with the earnings or cashflow supporting the dividend payouts.

Right now, I have 3 brokerage account. I use Fidelity for my Roth IRA, Capital One for my Taxable account, and my employer's retirement provider for my 401k.

My breakdown right now is around:
$16k - Roth IRA
$168k - Taxable
$45k - 401k

 




As of 7/31/2016 my portfolio holdings are the following below. The top positions are highlighted green because those are my core positions with the highest quality. Quality is determined by financial strength and safety. These companies are usually larger, have long track records, strong moats, have strong balance sheets, and have been paying dividends for a long time. The green companies in the middle are still high quality but have lower ratings. Yellow and Red companies are what I consider Supporting and Speculative positions.
Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Johnson & Johnson JNJ Health $15,615.20 6.42% $399.02 2.5553% AAA A++ 1
PepsiCo PEP Staples $8,258.99 3.40% $228.24 2.7635% A A++ 1
Abbott Laboratories ABT Health $6,968.41 2.87% $161.95 2.3240% A+ A++ 1
Kimberly-Clark KMB Staples $6,749.13 2.78% $191.72 2.8406% A A++ 1
Visa Inc V Financial $6,246.07 2.57% $44.81 0.7175% A+ A++ 1
3M Co MMM Industrial $6,166.48 2.54% $153.51 2.4893% AA- A++ 1
The Coca-Cola Co KO Staples $5,255.21 2.16% $168.63 3.2088% AA- A++ 1
Procter & Gamble Co PG Staples $5,096.53 2.10% $159.58 3.1312% AA- A++ 1
Medtronic, Inc. MDT Health $4,951.31 2.04% $97.18 1.9628% A A++ 1
Exxon Mobil Corp XOM Energy $4,945.54 2.03% $166.80 3.3727% AA+ A++ 1
Nike Inc NKE Discret $3,880.34 1.60% $44.75 1.1532% AA- A++ 1
Stryker Corporation SYK Health $3,060.44 1.26% $40.01 1.3072% A A++ 1
Automatic Data Proc, Inc ADP Tech $2,968.39 1.22% $70.75 2.3834% AA A++ 1
Colgate-Palmolive Co CL Staples $2,609.35 1.07% $54.69 2.0959% AA- A++ 1
Altria Group Inc MO Staples $12,971.18 5.34% $433.01 3.3383% A- B+ 2
Realty Income Corp O REIT $11,237.73 4.62% $375.80 3.3441% BBB+ A 2
Philip Morris International Inc PM Staples $10,348.06 4.26% $421.11 4.0694% A B++ 2
AT&T Inc T Telecom $8,456.54 3.48% $375.06 4.4352% BBB+ A++ 1
General Mills, Inc. GIS Staples $8,436.38 3.47% $225.31 2.6707% BBB+ A+ 1
Kraft Heinz Co KHC Staples $7,274.18 2.99% $193.66 2.6623% BBB- A 2
Dominion Resources, Inc D Utilities $7,252.48 2.98% $260.28 3.5888% A- B++ 2
Reynolds American Inc RAI Staples $5,860.64 2.41% $196.68 3.3560% BBB A 2
Southern Co SO Utilities $5,801.01 2.39% $242.88 4.1869% A- A 2
Church & Dwight CHD Staples $5,559.06 2.29% $80.35 1.4454% BBB+ A+ 1
Becton Dickinson and Co BDX Health $5,239.50 2.16% $78.59 1.5000% BBB+ A++ 1
Mastercard Inc MA Financial $4,476.28 1.84% $35.72 0.7980% A A++ 1
McCormick & Company MKC Staples $4,192.25 1.72% $70.52 1.6822% A- A+ 1
Air Products & Chemicals, Inc APD Materials $3,945.81 1.62% $90.84 2.3022% A A+ 1
Hormel Foods Corporation  HRL Staples $3,770.15 1.55% $58.55 1.5529% A A 1
NextEra Energy Inc NEE Utilities $3,418.35 1.41% $92.73 2.7126% A- A 2
Home Depot Inc HD Discret $3,244.56 1.33% $64.78 1.9965% A A++ 1
Verizon Communications Inc VZ Telecom $6,444.37 2.65% $262.85 4.0787% BBB+ A++ 1
McDonald's Corporation MCD Discret $3,746.66 1.54% $113.37 3.0259% BBB+ A++ 1
Xcel Energy Inc XEL Utilities $3,400.40 1.40% $105.15 3.0923% A- A+ 1
United Technologies Co UTX Industrial $3,254.92 1.34% $79.82 2.4524% A- A++ 1
Praxair, Inc PX Materials $1,981.18 0.81% $51.00 2.5742% A A 1
Ross Stores Inc ROST Discret $3,973.73 1.63% $34.71 0.8734% A- A 2
TJX Companies Inc TJX Discret $2,529.99 1.04% $32.20 1.2726% A+ A++ 1
Starbucks Corporation SBUX Discret $2,247.93 0.92% $30.98 1.3781% A- A++ 1
Misc Type ……….. Partial Totals Weight Yrly Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $221,834.75 91.25% $5,987.57 2.6991%
Liquid US Dollars $19,701.86 8.10%
Non-Liquid Assets $1,572.00 0.65%
. .. Equity + Misc Weight …..2 ….. …..222 …..2222 …..223
Total $243,108.61 100.00%


I have added new positions in Medtronics (MDT) and Stryker (SYK) in the healthcare category. My top 5 heavy weights are JNJ, MO, O, PM, and T.


My current asset holdings is on track with my plan. The portfolio has had a nice run up lately due to capital gains from rising stock prices. This may be temporary of course. Even if a correction occurs I still believe my monthly income can help offset the losses. The goal is income accumulation, not so much capital paper gains.

In the previous blog post, I highlighted that in July 2016 I have received $444 in dividends. This is a large raise over the $309 I received last July. Income continues to grow month after month. Stay tuned for next month's report.

-YD

2 comments:

  1. Well done YD! I love the last graph showing 'goal vs results.' That is such an informative graph showing your diligence over the years. Keep it up! I'm afraid that the market won't keep up its share of the work, but you are well on your way!

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  2. Great job YD! The markets surge higher has really boosted our net worth so far this year which is fun to watch but I wouldn't be surprised to see it drop because the market sure does look expensive. That doesn't mean that you can't find value out there but it's much harder to find now a days.

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