Tuesday, March 28, 2017

Recent buy: GIS $2124

An order for 36 shares of GIS was placed today. The trades should be executed tomorrow morning. It will total around $2124 which is around $70 in dividends additionally every year.

Tuesday, March 21, 2017

Recent buy: $3599 HRL + $3000 PEP


Today $3599 was spent on buying shares of Hormel.

And another $3000 was spent on PepsiCo.  In my earlier post in the blog, I talked about GIS. I decided in the end on PepsiCo (PEP) over General Mills (GIS) because I liked the diversity and growth prospects of PEP more than GIS, despite PEP having a slightly lower yield.

Happy investing

Sunday, March 19, 2017

Upcoming purchase: GIS HRL

The stock market has had an incredible run. This has helped the paper value of my assets, however it makes buying stocks very difficult.  At this point I've resorted to finding stocks that have not experienced the recent run up. Or if I want to purchase companies that have run up, I will buy the ones that have the highest growth potential (slow growing companies with high P/Es just doesn't make too much sense).

I really like the food consumer staples sector. It is defensive and the products still sell during recessionary times. Right now I have $6600 ready to allocate to this sector. I will also have $2000 next week for another purchase and will continue thinking about that purchase.

If the buys go through, GIS will become a 5-figure position in my portfolio and HRL will be a starting position. I have right now 8 positions that are 5-figures. It's great seeing my portfolio grow and grow over the years through my contributions and individual company growth.

General Mills is the traditional old school boring food stock. It yields 3.2% and has a slow single digit dividend growth. Sometimes GIS holds its dividend flat for several years but they have been paying dividends for over a hundred years straight. It is a defensive company that will still hold its own during recessionary times. The company is facing headwinds now as consumers look to healthy organic alternatives to processed food. I am confident GIS can weather the storm, and if its enterprise value falls I am sure someone like Kraft Heinz will scoop in to buy out the company.

Hormel historically been a high growth company with a small dividend. It recently increased its dividend by 17% and it has been an impressive dividend paying company for many decades. HRL is a dividend aristocrat yielding almost 2% now. Hormel's stats are very impressive. Year after year their earnings and revenues increase even with a slight blip in revenues from 2008-2009. The company has a very stable payout at 36% and the credit rating is high at "A". HRL has been flat for many months since the growth has failed to keep up with its escalating P/E ratio. HRL is starting to look more fair value compared to the days it was hitting $45 a share!

I sold HRL in Dec'16 for tax loss harvesting and right now the share price is around the same as when I sold it. I would like to get HRL back so this would be a good time to re-enter.

Both GIS and HRL are relatively "small" companies. GIS is around 35 Billion and HRL is only 18 Billion. The supermarket aisles are packed full now with many different brands trying to compete for aisle real estate. It's hard to expand and grow as a food company. There also is not much to innovate in terms of food besides going organic.

What many companies do now in the packaged foods space is to acquire other companies through cheap debt. By issuing the debt, they can increase their revenues and earnings. Cost cutting through synergies can also be done as seen by 3G's extreme efficiency measures on Kraft and Heinz. If the price of GIS and HRL fall or continue to stagnate, it's almost guaranteed a large buyer will come in to gobble them up eventually.

However, I don't recommend buying a company based on take over potential. Instead I want to buy a company I would want to own for the very long term (30+ years) because of their business fundamentals. Both of these companies have proven their resileance by lasting many many decades. Both of these companies are older than my grandparents. I have faith they will continue producing spam and cereal after I am no longer here.


Wednesday, March 1, 2017

February 2017 Portfolio Summary

I did not post this back in March. So I am filling this post out today (Apr 12 2017) so that my future self can have records of my past months. This report will just contain data.

This is the snapshot of my portfolio as of March 1, 2017:

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Altria Group Inc MO Staples $49,578.75 16.15% $1,600.80 3.2288% A- B+ 2
Philip Morris International Inc PM Staples $17,542.61 5.71% $662.17 3.7746% A B++ 2
Home Depot Inc HD Discret $14,000.33 4.56% $337.20 2.4085% A A++ 1
Johnson & Johnson JNJ Health $12,159.37 3.96% $314.32 2.5850% AAA A++ 1
Realty Income Corp O REIT $11,824.41 3.85% $495.79 4.1929% BBB+ A 2
Visa Inc V Financial $11,220.37 3.65% $83.40 0.7433% A+ A++ 1
Ross Stores Inc ROST Discret $10,976.77 3.58% $88.38 0.8051% A- A 2
Starbucks Corporation SBUX Discret $10,563.35 3.44% $166.50 1.5762% A A++ 1
PepsiCo PEP Staples $8,502.64 2.77% $231.48 2.7225% A A++ 1
Kraft Heinz Co KHC Staples $8,466.07 2.76% $222.06 2.6230% BBB- A 2
Kimberly-Clark KMB Staples $8,393.97 2.73% $243.69 2.9031% A A++ 1
Becton Dickinson and Co BDX Health $8,081.41 2.63% $127.77 1.5810% BBB+ A++ 1
General Mills, Inc. GIS Staples $7,845.84 2.56% $248.05 3.1615% BBB+ A+ 1
McCormick & Company MKC Staples $7,347.42 2.39% $138.92 1.8908% A- A+ 1
Church & Dwight CHD Staples $7,018.63 2.29% $101.37 1.4443% BBB+ A+ 1
3M Co MMM Industrial $6,627.38 2.16% $164.54 2.4827% AA- A++ 1
Mastercard Inc MA Financial $6,376.38 2.08% $50.22 0.7875% A A++ 1
The Coca-Cola Co KO Staples $5,202.83 1.69% $181.27 3.4840% AA- A++ 1
Dominion Resources, Inc D Utilities $4,546.79 1.48% $179.35 3.9446% BBB+ B++ 2
Automatic Data Proc, Inc ADP Tech $4,484.62 1.46% $97.85 2.1818% AA A++ 1
TJX Companies Inc TJX Discret $4,258.23 1.39% $56.19 1.3195% A+ A++ 1
McDonald's Corporation MCD Discret $4,135.68 1.35% $121.58 2.9398% BBB+ A++ 1
Xcel Energy Inc XEL Utilities $3,964.75 1.29% $130.59 3.2937% A- A+ 1
NextEra Energy Inc NEE Utilities $3,957.58 1.29% $118.91 3.0046% A- A 2
Air Products & Chemicals, Inc APD Materials $3,957.08 1.29% $107.78 2.7236% A A+ 1
Procter & Gamble Co PG Staples $3,784.11 1.23% $112.06 2.9613% AA- A++ 1
Stryker Corporation SYK Health $3,442.16 1.12% $44.94 1.3057% A A++ 1
AT&T Inc T Telecom $3,121.86 1.02% $145.65 4.6656% BBB+ A++ 1
Southern Co SO Utilities $2,872.84 0.94% $127.76 4.4471% A- A 2
Abbott Laboratories ABT Health $2,723.02 0.89% $63.79 2.3425% BBB A++ 1
Colgate-Palmolive Co CL Staples $2,623.52 0.85% $55.61 2.1199% AA- A+ 1
Medtronic plc MDT Health $2,317.28 0.75% $48.69 2.1011% A A++ 1
Verizon Communications Inc VZ Telecom $2,227.75 0.73% $102.74 4.6117% BBB+ A++ 1
Clorox Co CLX Staples $1,974.36 0.64% $46.14 2.3371% A- B++ 2
The J. M. Smucker Company SJM Staples $1,937.41 0.63% $41.37 2.1354% BBB A++ 1
Bard (C.R.) Inc BCR Health $1,778.63 0.58% $7.53 0.4231% A A+ 1
WEC Energy Group, Inc. WEC Utilities $1,440.25 0.47% $50.53 3.5082% A- A+ 1
Aqua America Inc WTR Utilities $989.62 0.32% $24.08 2.4329% A+ A 2
Misc Type ……….. Partial Totals Weight Yrly Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $272,266.07 88.68% $7,141.04 2.6228%
Investable US Dollars $7,283.77 2.37%
House Savings Cash US Dollars $22,951.66 7.48%
Miscellaneous Assets $4,524.75 1.47%
. .. Equity + Misc Weight …..2 ….. …..222 …..2222 …..223
Total $307,026.25 100.00%