Thursday, September 29, 2016

Recent buy: Home Depot

Today 71 shares were purchased in Home Depot for around $9166.1

Home Depot yields 2.14% at the moment and has been able to grow the dividend by 17% year over year.

I plan to have my remaining purchases in other companies executed on Tuesday and then I'll update my portfolio page. Altria is continuing to correct and Nike has took a nice pullback. Starbucks remains at valuations that I still like considering they grow the dividend very fast.

Monday, September 26, 2016

Recent sells and future buy targets

Today I have shaved off profits off of SO, T, and VZ. My capital gains were nice on SO and T since I held them long before their long climb up and the flight to high yield. I still hold positions in all 3. These 3 positions I classify as very slow growth and they are great companies but I am overweight in slow positions and I want to take more growth risk as a very young investor.

SO: Sold $3257
T: Sold $5165
VZ: Sold $3871

Last week I have done some work categorizing my portfolio into 5 categories. The growth numbers below are averages total returns with dividends reinvested using YTD returns for past years spanning 3, 5, 10, and 20+ years  (however far back the data can go) on each of the category's stocks that I have invested. I place more emphasis on more recent 3 5 and 10 year trends. For example, Very high growth represents the group containing (HD, MA, MO, ROST, SBUX, V, HRL, RAI) in my portfolio. Although past performance cannot predict future performance, they do give an idea of which categories certain companies fit under. Additionally companies for the most part continue from the past 3 to 5 years momentum barring an economic disaster. For example AT&T is slow and steady while Ross Stores is a high growth company.

- Very high growth   (average 20-22% growth)
- High growth           (average 15-19% growth)
- Medium growth     (average 12-15% growth)
- Slow growth           (average 8-12% growth)
- Very slow growth   (average 6-8% growth)

For this year I am re-balancing my portfolio to be around
- 50% Very high growth and high growth
- 25% Medium growth
- 25% Slow and very slow growth
50% will be responsible for growth and 50% will provide the foundation.

I took some time to sit down to look at growth trajectories and past performance for my various holdings. I analyzed the EPS growth, dividend growth, cash flow growth, ROIC, and P/E trends relative to past P/E. I grouped my portfolio picks into various names into those 5 categories which I color coded below.

Notice that the high growth names are usually those with lower yields and high dividend growth, such as ROST and Visa. Altria (MO) and Realty Income (O) are sort of exceptions since they have produced immense returns while maintaining a high yield. The medium growth are many of your staple dividend growth names but they do not have high yields, many have around 1.5-2.5% yield. The slow growth areas belong to high yielding names that are very stable blue chips. This category holds most of my highest quality blue chips.

I will be adding to the neon green and dark green categories which are growth in the coming days since I have a large cash position waiting to be re-balanced
Names that I am eyeing to add in the next few days include:
I find NKE and SBUX undervalued. HD and MA are fairly valued. The others are on the expensive side but appear worthwhile if one is paying up for future earnings.

Friday, September 23, 2016

Recent sells: Rebalancing

I have been performing reallocation of my portfolio to overweight in a fewer selection of my favorite companies with consistently higher growth.  My portfolio is at a stage where my core positions are very sizable and I want to have more allocation in growth since my base foundation is already set. Since I am young and many years away from retirement, I do not want to be too conservative in only core names.

I plan to eventually have heavier weightings in fewer stocks that I have done extensive research for and favor, instead of having all of my stocks in many tiny weightings. Diversification is important but I have found that is dilutes results if one has done extensive homework. For those that do not like to research stocks everyday and prefer a more passive approach, I recommend heavy diversification.

I have received $100 bonus by my broker so I used some of that to fund sells.

Taxable account:
XOM - $3623  (complete exit)
ABT - $4509  (only selling partially)
PG - $4567  (only selling partially)
UTX - $3116 (complete exit)

Tax-sheltered account:
PX - $1978 (complete exit)
D - $2689 (selling partial)
JNJ - $3322 (selling partial)

Tuesday, September 20, 2016

Recent buy: MO

Since MO is correcting I added to MO. It yields 3.9% and has a 8% dividend growth rate with a dividend that is basically covered with a payout ratio around 74%. With the SABMiller deal coming to close hopefully soon, I find MO attractive.

I only used $300 this week to add to my position.

I plan to move some of my stock holdings around next week to overweight in select dividend stocks that I find provide potentially higher returns. For example, MO is one of the companies I want to be overweight in. I am doing the re-balancing since I am moving the bulk of my funds from Capital One to Fidelity and Fidelity is offering me free trades for signing up. I will also take this time to do whatever tax loss harvesting I can for 2016.

I'll create a post on what I decide on swapping in the coming days.

Saturday, September 17, 2016

Some ideas for my purchase next week

Next week will be a smaller buy. I'm targeting $1000 total spread around a few stocks. Below are some of my ideas for stocks that have corrected recently and are yielding high amounts.

There is definitely a sector shift going on right now away from Consumer Staples, Utilities, and REITs into less high dividend sectors like Industrials and Technology. Big dollar fund managers are most likely cashing out their profits in these sectors and sector rotating to more growth sectors. Dividends are also becoming less "sexy" as talks of interest rate hikes are floating around the press. That's perfect for me since many of my favorite companies on my watch list are in Consumer Staples, Utilities, and REITs. REITs are still expensive so I don't have any names yet, although definitely pulling back. I have identified some names in the Staples and Utilities space below.

One of my favorites. Altria (MO) provides a very high yield and a high growth as well. It has corrected around 9% and any dip in Altria to me is a time to add. Altria yields a high 3.9% and has been consistently increasing the dividend at a 8% clip. Altria sells tobacco, an addictive product that is recession resistant and has a loyal userbase. I don't condone smoking but as an investment I recommend Altria. Altria is one of the well known dividend aristocrats with a 47 year dividend raise history (keep in mind they have spun off a lot of companies over the last several years so some may not consider Altria a dividend aristocrat).

Monday, September 12, 2016

Recent buy: ABT, GIS, KMB ...

Tuesday morning at around 11am Eastern time, I sent in orders for the following companies below. I pay $1 per company buy so this week I will spend $7 total.

Your Plan Investments

Friday, September 9, 2016

What I'm doing on this recent pull back

The Fed is tripping people up again. Fear of a rate hike sent stocks spiraling downwards today. I opened my monitor in the morning and couldn't help but grin. Before any down turn, each investor should have a shopping list already of top companies they want to some day own or add to.

Market dips are opportunities. While most are scrambling in fear and the news is spouting SELL SELL SELL, this is a great time to be rational and buy high quality assets at a discount. I look forward to sales since it helps boost how much actual dividend income I can add every week.

I had my shopping list in my head already and I'll share some of my favorite companies that I hope to add in the coming days. Stocks are likely going to continue falling. Those that play with margin will be getting margin calls and will be forced to sell, continuing the downward spiral. Since I am terrible at timing bottoms, I just add bit by bit when stocks pull back from their all time highs.

I currently have a bit over $12,000 in US Dollars and am looking forward to adding as stocks continue to fall.

Saturday, September 3, 2016

Upcoming buys: WTR, NEE, WEC ...

Since Monday is a national US holiday, my weekly reoccurring trades on my brokerage account (1$ per transaction to buy) was set on Friday and will be executed Tuesday morning. The orders I will be placing are the following. They are all utilities.

Your Plan Investments

Friday, September 2, 2016

August 2016 Portfolio Summary

Another month has passed. Another update. The portfolio in August has stayed relatively flat. The S&P500 similarly has stayed relatively flat. My dividends have been growing and my portfolio doesn't increase constantly but overall it is at a very high level compared to previous months. Most of the growth can be attributed to my weekly contributions; however, the large run up since March until now certainly has helped my portfolio's total value.

I am not as concerned about my portfolio's value as much as the dividend safety. As a dividend growth investor, I am more concerned about how much money I can rake in each month from dividend checks. And how much this dividend payout grows year after year by itself. It's all about dividend payout, dividend growth, and dividend safety. Price is just gravy since I plan to never sell my assets unless the business fundamentals have blown up. Price will take care of itself as dividends continue to increase and the payout is healthily covered. This is similar to owning a business or owning a rental property. There is no need to know how much my factory's current market value is worth or how much my rental apartment is worth on Zillow as long as my ultimate goal is to collect fat checks every month after producing my goods and services.

My goal is to ultimately be able to live off of my dividend. I want my dividends to grow by themselves without me having to contribute. Each company needs to continue increasing its dividend year after year. This is why I invest primarily in dividend aristocrat companies or companies with over 25+ years of continuous dividend increases. These businesses have survived more recessions than one can count off the top of their head. The strong often get stronger. Those that have survived through the tough times come out tougher. I want to own businesses with experience and resilience, not the hot fashionable new guy on the block.

I hold a diversified basket of high growth low yielding dividend paying stocks and also a group of lower growth but higher yielding dividend paying stocks. Overall, the two types average out and I get around a 2.7% yield at a 9% dividend growth per year. This is a total income growth hitting close to 12% a year.

Since I am in the accumulation phase and am no where near retirement, I contribute heavily into my portfolio. Nearly all of my income growth right now is due to my weekly contributions. As the portfolio gets very large such as in the 7 figure range, my weekly contributions will be begin to be dwarfed by the portfolio's daily gyrations and monthly dividend checks.

Thursday, September 1, 2016

August 2016 Dividends Received

I have received another set of checks this month from the companies I own. This is money in the bank. When owning shares, I like to consider myself as a part owner in the business. Part of the profits in that enterprise is sent to me and I can use that cash to buy whatever I want. In this case, I buy more shares of companies to increase my dividends next month even  more.

Ticker      Total    Taxable    Roth IRA         401k
T $93.77 $93.77
VZ $65.72 $41.42 $24.30
GIS $56.33 $43.37 $12.96
ABT $40.49 $40.49
PG $39.87 $39.87
O $31.37 $31.37
APD $22.71 $22.71
HRL $14.64 $14.64
CL $13.67 $13.67
MA $8.98 $8.98
SBUX $7.74 $7.74
$395.29 $317.68 $55.67 $21.94

My checks are getting fatter and fatter each month. In August I cashed in almost $400, or around $100 a week. Not bad for doing absolutely nothing. Thinking back to my poor days a few years ago as a broke college student, I was working part time to pay for my tuition and bills and I only made $400 a month and it was really tiring on top of my studies. It really made me appreciate the value of the dollar. Every dollar saved is a dollar earned. Being able to make that same amount now without lifting a finger is highly satisfying.

This is compared to my $299 in dividends I received in last year's August, a sizable growth due to my continuous contribution every month. My diligence and constant investing appears to be paying off. My dividends already can easily cover my monthly utilities, gasoline, cell phone, auto insurance, and food expenses.