Wednesday, March 18, 2020

Recent buy: O, MO, GD

Today the S&P500 fell around 8% when I added some buys. This was another large leg down, so I executed a few buy orders.

In previous days, I was adding more into companies with lower yields but higher long term growth potential. Today I want to add more to higher yielding companies to increase my income.

MO was down over 8%, it now yields a whopping 9%, and I find this dividend to be safe.
I added $556

O was down over 26%. Ironically they increased their dividend today. O now yields 6.8%, basically double a few days ago. The fall has been unprecendented.
I added $736

GD was down over 9%. It now yields around 3.7%, a lot for a company that usually yields in the low 2%.
I added $243

Both MO and GD are now in single digit P/E territory so they are very cheap.

My cash sits at around $25,191.

The amount of dividends that one can now receive for each dollar deployed is substantially more than it was a few weeks ago. The goal is to find companies that can maintain that dividend with good payout ratios and good financials to weather out the Coronavirus situation.


  1. Hi YD,
    I have been watching ur move for a while. I am doing the dividend income as well. The only thing I regretted is that I payed to much for my house. I should have more cash ready in this market.
    I like ur choice on MO and GD. What do u think of BP which is effected a lot by the oil drama? Do u think it its dividend is safe?
    Thanks for ur sharing! Keep it going!

    1. I don't invest in oil, too cyclical. At very low oil prices I have doubts XOM or BP can sustain the dividend.

  2. Like you, I own MO but it looks very risky here given it's high leverage and it's debt/EBITDA now shows 12.12 (I used Guru Focus). How long can they continue paying dividends until they need to cut it? These are challenging times indeed and market seems to rightly punish companies that have high debt on their balance sheets.

    1. I believe MO's dividend is safe with their free cash flow or earnings metrics. Very long MO at these levels.

  3. I have not bought anything yet as I don't see enough margin of safety. I have only re-shuffled my portfolio a bit. When TMO hits 230$ then I will start buying.

    Stay safe!