Monday, April 24, 2017

Recent buy: BDX

Today BDX announced they purchased BCR for a 20% premium. I hold shares in both but my position in BCR is small. It was however a very nice gain and I am sure BCR will serve BDX well in the long run. I expect a lot of synergies and cost savings along with EPS growth for BDX after the acquisition.

I have a large holding in BDX and I added 19 shares today. I spent around $3400 on BDX. If it falls more I plan to add more to BDX. BDX and JNJ are two of my favorite dividend aristocrat healthcare companies. They have consistently increasing earnings and dividend increases for many many decades, even during economic recessions. They provide products and equipment we need since health is very important for people and when you're sick you will eventually spend money on health equipment. Healthcare companies are also in a good spot for the next several decades as the baby boomer population hits old age, which usually results in higher healthcare costs.

Thursday, April 20, 2017

Recent buy: JNJ, PM, ITW

Today I purchased the following companies.

JNJ: 57 shares - $6947
PM: 24 shares - $2623
ITW: 14 shares - $1879

Wednesday, April 12, 2017

March 2017 Portfolio Summary

I will report March's summary using data I have today on April 12, 2017. The growth so far this Q1 has been high due to the growth in the market and bonuses or nonrecurring sources. I am currently ahead of schedule for 2017 so a market correction will be fine by me to scoop up better dividend yields.

The goal of this portfolio is income replacement. I will one day use the passive dividend checks I receive every month from my various holdings to pay for my daily living expenses, whether it be housing or food or travel or entertainment. Everything will eventually be covered without me having to work. My plan is also to have this income stream grow independently without me having to contribute. Each of these companies are expected to increase their dividend payouts year after year. And many of these companies have consistently done so no matter the economic environment. As of today, I contribute heavily into the portfolio month after month. Hence, most of the dividend growth is caused by my contributions. In the future however I expect the portfolio to grow the income by itself at a rate of 10% y/y with dividends reinvested (so a $100,000 income becomes $110,000 the next year and then $121,000 the next and $133,100 the next, and so on).

I hold mainly defensive companies that provide products and services we use everyday no matter what. Whether we are unemployed, sick, or in a recession, people will likely buy products or services from the companies that I own. These are things like credit card payment services (Visa), toilet paper, food, water, electric utilities, off the shelf medicine, toothpaste, shampoo, and household/industrial cleaning products. This ensures that the companies can successfully pay their dividends safely every year.

I am a technical professional working in the bay area. Before accounting for taxes, I strive to save and invest 70-80% of my income (before tax salary - living expenses) / (before tax salary). Since I am single and in my 20s (no mortgage or family finances yet), I am able to grind through and grow this portfolio very quickly. I think time is my most valuable asset, not so much the income I can generate. Compounding from investment income and returns is a much faster way to grow wealth I think than having a higher income once you factor in time. Compounding as a function of time is exponential while accruing income by spending one's hours is only a function of linear growth with time as the variable. So I tried to get started in investing right after I graduated from university.

My goal is to reach $1,000,000 by age 31-33, depending on market fluctuations. By then the portfolio should be spitting out $25,000 in passive income every year or $2083 a month. I expect this $1M portfolio to be able to passively grow the income at 10% a year with dividends reinvested, or ~$2500 for the first couple years after hitting $1M. The portfolio shown below has been the result of my work over a period of 3-4 years. I started from $0 and so far I am a third of the way towards my goal of $1M dollars.

Currently my portfolio receives $7500 annually in passive dividend income. This number can be even higher if I did not have nearly $65,000 in cash. I plan to deploy more cash to boost my dividend income in the future, but deals are hard to come by in today's expensive market.

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Altria Group Inc MO Staples $47,690.86 13.65% $1,614.40 3.3851% A- B+ 2
Philip Morris International Inc PM Staples $18,219.49 5.22% $668.25 3.6678% A B++ 2
Home Depot Inc HD Discret $14,058.50 4.02% $337.71 2.4022% A A++ 1
Johnson & Johnson JNJ Health $12,278.75 3.51% $316.31 2.5761% AAA A++ 1
Realty Income Corp O REIT $12,070.38 3.46% $497.28 4.1199% BBB+ A 2
PepsiCo PEP Staples $11,643.28 3.33% $313.67 2.6940% A A++ 1
Visa Inc V Financial $11,248.78 3.22% $83.56 0.7428% A+ A++ 1
Starbucks Corporation SBUX Discret $10,707.64 3.07% $166.50 1.5549% A A++ 1
Ross Stores Inc ROST Discret $10,484.73 3.00% $104.99 1.0014% A- A 2
General Mills, Inc. GIS Staples $9,485.33 2.72% $317.17 3.3438% BBB+ A+ 1
Kraft Heinz Co KHC Staples $8,458.44 2.42% $223.50 2.6423% BBB- A 2
Kimberly-Clark KMB Staples $8,391.16 2.40% $245.48 2.9254% A A++ 1
Becton Dickinson and Co BDX Health $8,073.55 2.31% $128.28 1.5889% BBB+ A++ 1
McCormick & Company MKC Staples $7,365.15 2.11% $138.92 1.8862% A- A+ 1
Church & Dwight CHD Staples $7,068.07 2.02% $101.76 1.4397% BBB+ A+ 1
3M Co MMM Industrial $6,694.87 1.92% $165.55 2.4728% AA- A++ 1
Mastercard Inc MA Financial $6,397.49 1.83% $50.22 0.7849% A A++ 1
The Coca-Cola Co KO Staples $5,270.43 1.51% $182.85 3.4693% AA- A++ 1
Dominion Resources, Inc D Utilities $4,646.72 1.33% $181.12 3.8978% BBB+ B++ 2
Automatic Data Proc, Inc ADP Tech $4,405.58 1.26% $98.39 2.2333% AA A++ 1
McDonald's Corporation MCD Discret $4,273.60 1.22% $122.48 2.8659% BBB+ A++ 1
TJX Companies Inc TJX Discret $4,173.15 1.19% $56.37 1.3508% A+ A++ 1
Xcel Energy Inc XEL Utilities $4,042.74 1.16% $130.59 3.2301% A- A+ 1
NextEra Energy Inc NEE Utilities $3,942.24 1.13% $119.80 3.0390% A- A 2
Air Products & Chemicals, Inc APD Materials $3,869.16 1.11% $107.78 2.7855% A A+ 1
Procter & Gamble Co PG Staples $3,754.84 1.07% $112.06 2.9844% AA- A++ 1
Hormel Foods Corporation HRL Staples $3,540.70 1.01% $70.19 1.9825% A A 1
Stryker Corporation SYK Health $3,452.47 0.99% $44.94 1.3018% A A++ 1
AT&T Inc T Telecom $2,995.53 0.86% $145.65 4.8623% BBB+ A++ 1
Southern Co SO Utilities $2,843.07 0.81% $129.18 4.5436% A- A 2
Colgate-Palmolive Co CL Staples $2,627.44 0.75% $57.04 2.1710% AA- A+ 1
Abbott Laboratories ABT Health $2,622.52 0.75% $63.79 2.4323% BBB A++ 1
Medtronic plc MDT Health $2,268.88 0.65% $48.69 2.1460% A A++ 1
Verizon Communications Inc VZ Telecom $2,165.93 0.62% $102.74 4.7433% BBB+ A++ 1
Clorox Co CLX Staples $1,939.90 0.56% $46.14 2.3787% A- B++ 2
Bard (C.R.) Inc BCR Health $1,809.03 0.52% $7.53 0.4160% A A+ 1
The J. M. Smucker Company SJM Staples $1,771.33 0.51% $41.59 2.3480% BBB A++ 1
WEC Energy Group, Inc. WEC Utilities $1,485.75 0.43% $50.96 3.4301% A- A+ 1
Aqua America Inc WTR Utilities $1,030.18  v    $24.22 2.3511% A+ A 2
Misc Type ……….. Partial Totals Weight Yrly Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $279,267.71 79.94% $7,417.63 2.6561%
Investable US Dollars $40,848.75 11.69%
House Savings Cash US Dollars $24,645.12 7.05%
Miscellaneous Assets $4,567.00 1.31%
. .. Equity + Misc Weight …..2 ….. …..222 …..2222 …..223
Total $349,328.58 100.00%