Wednesday, February 27, 2019

Recent buy: MO, WEC, XEL, NEE

Today $2000 was invested in the following stocks. Several variables went into selecting a few, including starting yield, payout ratio, dividend growth, and historical stability.

XEL - $543
NEE - $559
WEC - $529
MO - $416

I loaded up on heavier yielding players to try to boost my portfolio up.
Although all 4 above have higher than average yields, they are great at raising their dividend. And who would of guessed, 3 of these steady growers are actually utility companies and one is a so-called 'dying' business (tobacco)! For perspective here are the recent dividend hikes from the 4:

XEL - 6.6%
NEE - 12.6% !!!
WEC - 6.7%
MO - 14.3% (they had an irregular hike due to the tax cut, usually they have been very consistently 8% y/y hikes).

For utilities, I did not add to D because the payout ratio is close to 90%. I find they are too aggressive on the dividend policy. NEE is the most conservative and it's growing fastest, although it's a lower mid 2% yielder. WEC and XEL hit the sweet spot (normal) dividend growth range that I like while maintaining a decently safe payout ratio for a utility.

I want to load up on higher yielding companies so that I can start purchasing more low yield high growth companies, ones like UNH, TJX/ROST, V/MA, SYK, etc. Overall my sweet spot I am targeting (in today's environment) for my portfolio is a 3% yield with 8% growth for a total income growth of 11% with dividend reinvested.

1 comment:

  1. I've been wanting to add some higher yielders too. The overall yield on my FI Portfolio is right around 3% and ideally that would be closer to 3.5% or so. I'm hoping to get a chance to load up on some utilities but need to do some more homework to see what valuations are like out there. Congrats on the buys!