Planning my monthly dividends

Since I am a picky planner, I prefer having consistently increasing dividends month after month. My current dividend picks favor more dividend payers in Mar/Jun/Sept/Dec months. My Jan/Apr/July/Oct months are the weakest. Even though I have a preference in picking stocks that will even out my distributions every month, I will still prioritize good deals over preferred planning (such as the very low price of CVX and XOM in the last couple of weeks).

Currently with my present portfolio holdings, I am on my way to receiving the following dividends in November and December of this year (these stocks deposit their dividends checks to me on the following months):

November	…	,,,	December	….
AAPL	$10.41		CHD	$7.78
GIS	$15.78		COP	$16.87
KMI	$20.14		CVX	$25.01
KMR	$16.83		JNJ	$19.13
O	$14.18		KO	$13.82
PG	$12.34		MCD	$12.87
T	$15.73		O	$14.18
VZ	$11.07		ROST	$4.02
SBUX	$4.60		TJX	$3.17
			V	$2.46
			XOM	$20.30
			SO	$13.02
	$121.08			$152.64

The growth of the Nov & Dec dividends per month are in line with my goals. However, when January and February of next year comes, my dividends with my current holdings is estimated to be:

January	.	,..	February	..
KMB	$8.49		AAPL	$10.41
MO	$24.63		GIS	$15.78
O	$14.18		KMI	$20.14
PEP	$7.93		KMR	$16.83
PM	$26.68		O	$14.18
WMT	$5.32		PG	$12.34
BAX	$12.02		T	$15.73
UNP	$5.55		VZ	$11.07
			SBUX	$4.60
	$104.79			$121.08

Note that how February is essentially the same as November and January is similar to October (not shown). This is because these months are paid by the same companies (with a few irregulars who pay at weird dates). The graph below summarizes this data:

The green bars represent the forecast and the blue are the ones already received. The Nov & Dec guidance appear in line; however, the Jan forecast is lagging. February is not shown since it's essentially the same as October.

My December holding is very heavy in oil and I do not plan to add anymore to oil unless there is an extreme drop since I have already added quite a bit into XOM and CVX. The following stocks that will pay dividends in January are shown below (the first couple I already own):

KMB	KO	MO	O	PM	BAX	UNP	ITW
ADP	BNS	BF_B	CB	DEO	DOW	FDO	GE
GPC	GSK	KRFT	MKC	MDT	MRK	NKE	OXY
PNY	RAI	SLB	TROW	TD	USB	XEL	SYY

Presently my Oct/Jan month is heavily tobacco. I prefer avoiding the financial sector which are stocks such as BNS and TD. For the month of January I am eyeing ITW, KMB, RAI, MKC, PNY, and KRFT. I have already recently added to KO. With my recent purchases in low yield growth stocks, I need companies that have higher  yields. RAI, KMB, PNY & KRFT fit the requirements. However most of these appear expensive aside from KRFT at the moment so I am willing to wait. This purchase doesn't have to be made until the ex-dividend dates which are in early-mid December.

For divs in February, the following list of stocks are on my watchlist, the first couple are ones that I own:

AAPL	GIS	KMI	KMR	O	PG	T	VZ	SBUX
ABT	ABBV	APD	CAT	CLX	DE	DEO	HCP	HCN
HRL	NUE	OHI	YUM

I am presently eyeing HCP, PG, GIS, and YUM. To satisfy my preference for high yield, I believe the order of priority will be HCP > GIS > PG. Of the three, I believe GIS has the best value. PG looks overpriced. T, VZ, HCN, OHI, KMI/KMR, and CLX are attractive secondary options. I do not want to load anymore in telecom (T/VZ). For REIT I will take HCP over HCN and OHI due to HCP being the dividend champion. I do not want to overload my position any further in the Kinder family (KMI/KMR). And CLX has too much debt. The following stocks above have to be purchased before their ex-dividend date which is usually some time in early to mid January.

Recent buy: KO and SBUX

I have bought 18 shares of SBUX in my taxable account and 20 shares of KO in my Roth IRA. I have decided that the Industrial sector has rallied too much recently and I have missed the opportunity. I will wait until a further drop to put cash to work. The industrial sector is volatile so I prefer to buy those stocks while they are on sale to add a safety margin.

I entered in SBUX as a speculative position. I am impressed by its recent growth and dividend increase. I added to KO in my Roth to add stability. Previously I had the Roth IRA funds in ARCP, which have been completely sold.

Recent sell: ARCP

I have sold all my 86 shares in ARCP today after the announcement of securities fraud. It is against my beliefs to do business with people with low integrity. ARCP has demonstrated today that it is a company that can't be trusted.
http://www.bloomberg.com/news/2014-10-29/arcp-says-accounting-errors-were-intentionally-not-corrected.html


My losses were around $200 (0.4% of my dividend portfolio) which is small, since my ARCP position was a speculative one. I will be putting the remaining cash to work soon after I decide on my next purchase. Yes, the selloff was crazy and the price may come back up. But I would rather lose $200 and learn from my mistakes than to have many sleepless nights.

Recent buy: XOM

22 shares of XOM were purchased today for $93.58

This will add around $61 of additional dividends annually and places my position in XOM at around $2744.

Buy/sell plans last week of October

I will be trying to allocate additional positions to meet my sector allocation goals. Below are graphs showing what I have now and what my goals are. I am going to aim at adding more energy and industrial stocks this week.

Present (left)                               Goal (right), click to enlarge pics

I really would like to increase my current 17.1% in energy and 2.6% in industrials. The ultimate goal is 24% in energy and 7% in industrials.

In addition to the cash, I will be selling my ~$1000 position in CMCSA this week to fund my purchases. CMCSA is not a dividend champion or contender and I had it more as a speculative play when I had free trades. 

Industrials:

I believe low gas prices will help the industrial sectors. Current gas prices have dipped tremendously. I am eyeing UTX, MMM, LMT, NSC, and ITW. In terms of MMM's price, I think the PE is a bit too high for me. I am preferring the PE (in relation to their past history) for UTX, NSC, and ITW. I am looking at NSC instead of CSX and UNP due to its lower PE. LMT has is a bit on the pricey side but it offers a nice yield and decent payout ratio. Most industrial stocks do not have yields over 3%. I prefer LMT over RTN, despite it being a higher PE, because LMT has a higher yield.

UTX





MMM  - a bit pricey :(




ITW




LMT - bit pricey but nice 3.31% yield and nice recent div increase..


NSC



Energy:
Whenever the price of oil falls I get a smile on my face. Not only do I pay less at the pump, but I can pick up extra shares of CVX and XOM with my extra money. I have added around $1000 to Chevron last week. This week I plan to add more but into a different oil major. Unfortunately the price of the oil companies have risen slightly since the lows of a couple days ago. However, they are still down from their highs by a significant amount. I am deciding to add to my position in XOM this week and make it a full position. XOM has the lowest yield relative to COP, CVX, and BP. However, it provides the least volatility and has a decent share buyback program. I threw BP out the window as an option since they have messy oil spill issues (and its dividend history is screwed up). I ended up having to decide between COP and XOM. COP dropped significantly more than XOM recently (so it's a better value) but it is a more volatile stock. COP has the advantage of higher growth and a higher yield. Ultimately though, I prefer stability over gains and I value XOM's moat. There are certain dividend aristocrats you can't go wrong with and XOM is one of them (that is until oil runs out...).

XOM

Recent buy: CVX

I purchased 8 shares of CVX at 111.68$ per share on 10/17. This brings my holding in CVX to $2581 as of today.

I have updated my Portfolio, Watchlist, and Dividend Calendar pages today. The Watchlist includes a more full list.

What is on my watchlist this month: oil oil oil

October has been a bad month for many stocks in the S&P500. This provides us with an opportunity to add positions to great companies at decent valuations. The energy sector in particular is incredibly hard hit the last couple of weeks due to falling crude oil prices. I think this provides us with a great opportunity for dividend champions such as Chevron, Exxon, and ConocoPhillips.

In addition to falling oil prices, several industrial sector names have fallen to attractive price valuations in my eyes. These names include UTX and MMM.

Below are several graphs showing stocks that are high in my watchlist for purchase this month.

At the moment, the current plan I am thinking is to add to the following positions in the coming months:

• CVX: $1000
• XOM: $2000
• COP or BP: $1000 (most likely will be COP)

Energy	Forward PE	PE	Yield	PEG	Beta
CVX	10.29	10.6	3.85%	1.85	1.15
XOM	12.06	11.54	3.05%	2.98	0.9
COP	10.48	10.31	4.36%	1.39	1.1
BP	8.63	11.1	5.75%	1.34	1.91

Currently CVX and COP look cheap on a PE basis and both have dividends higher than my 3.5% target. BP has a very high yield with good looking valuations. In terms of volatility I will still prefer XOM, COP, and CVX over BP. BP is a riskier play especially after the oil spill. The PEG is attractive in CVX, COP and BP.

	DGR	DGR	DGR	DGR
	1-yr	3-yr	5-yr	10-yr
CVX	11.1	11.2	9.0	10.6
XOM	12.8	12.2	9.7	9.6
COP	15.5	17.7	13.3	15.7
BP	9.2	12.0	cut divs	cut divs

BP has cut its dividend in the past which makes me hesitant to buy it. CVX and XOM are dividend aristocrats so it's business as usual. It is quite impressive that they have maintained around 10% of annual dividend growth continuously. COP offers the highest dividend growth which makes it attractive. COP also has the highest yield out of the three dividend payers. COP has been paying dividends continuously for 14 years. I am not impressed by BP's dividend growth and history. That may be because BP already has a high yield.

Energy: CVX (high priority)

Energy: XOM (high priority)

Energy: COP (medium priority)

Energy: BP (low priority)

Recent Buy 10/16/2014

The market has been quite volatile lately. I welcome the slight correction that many stocks are seeing right now. Today I put capital into the following companies:

ARCP - 86 shares - $11.96

V - 5 shares - $201.64

ARCP

These are two very different stocks. I added ARCP in my Roth IRA since it is a REIT which pays large monthly dividends. I feel that this stock is undervalued at the moment. My two REIT players are now O and ARCP. I feel that ARCP is a riskier play so I do not plan on making this one a full position yet.

V

V is a growth stock that I believe will have large dividend growth and capital gain potential. Its dividend yield is low but its growth prospects are extremely high. I believe the price after the recent correction makes it attractively valued. 

The reason I purchased a very high yield stock and a very low yield stock today is so that I can maintain an average yield of around 4%.

I have additional capital coming in very soon and am holding them as cash until I feel that the time is right to purchase XOM/CVX/COP/BP. I feel that the oil sector is extremely undervalued at the moment; however, I do think that they can still fall further which is why I am waiting.

New buy October 7

I have purchased 13 additional shares of Verizon for 49.76$ a share.

August Update and Recent Buys

I have been busy for the last month with other tasks, but I have made some additions to my portfolio. I also have removed some positions. I will report on the progress of last month as well.

Roth IRA:
I have removed 20-21 shares of KMR since I felt my position was overweight.
I then bought 44 more shares of O (O share price has fallen greatly).
I have added 500 dollars of cash to my Roth IRA. I am going to add 2000 more to my Roth IRA in the coming months to max my contribution. Once the cash settles I will buy more shares of REITs (I am eyeing ARCP and HCP right now).

Taxable:
My taxable account ran out of free trades today. So I did a lot of trading to balance my portfolio more to my liking.

I started new position in the following positions:
  -SO
  -UNP

I added more to my existing positions:
  -BAX
  -AAPL
  -T
  -PEP
  -KO
  -MCD
  -GIS
  -KMB
  -CMCSA

I removed some shares from these positions:
  -ROST
  -KMI

I no longer hold these positions:
  -DE
  -SDRL

The final portfolio of my Roth IRA + Taxable is shown below. The portfolio has recently crossed the $40k mark and now provides over ~$100 a month in dividends. I am quite happy with the dividends that I am receiving this month (September). The dividend amount is constantly growing and it is getting more noticeable. I am not able to pay all my utility bills using dividends.

Ticker	Sector	Value	PE	Yield	Annual Divs	Beta	Weight
AAPL	Technology	$2,221.12	16.31	1.86%	$41.31	0.88	5.38%
BAX	Healthcare	$1,668.42	20.43	2.87%	$47.88	0.71	4.04%
CHD	Staples	$1,761.19	25.14	1.77%	$31.17	0.47	4.27%
CMCSA	Telecom	$1,021.32	19.98	1.59%	$16.24	1.21	2.47%
COP	Energy	$1,863.76	12.41	3.62%	$67.47	1.03	4.51%
CVX	Energy	$1,888.10	11.91	3.43%	$64.76	1.09	4.57%
GIS	Staples	$1,959.10	18.18	3.20%	$62.69	0.14	4.75%
JNJ	Healthcare	$2,935.30	19.96	2.59%	$76.02	0.59	7.11%
KMB	Staples	$1,069.30	19.2	3.14%	$33.58	0.21	2.59%
KMI	Energy	$1,734.82	33.02	4.53%	$78.59	0.67	4.20%
KMR	Energy	$1,130.66	60.14	5.96%	$67.39	0.61	2.74%
KO	Staples	$1,051.25	22.49	2.90%	$30.49	0.50	2.55%
MCD	Discretionary	$1,429.95	17.09	3.43%	$49.05	0.36	3.46%
MO	Staples	$2,081.65	20.73	4.27%	$88.89	0.52	5.04%
PEP	Staples	$1,125.48	21.17	2.79%	$31.40	0.41	2.73%
PG	Staples	$1,617.50	21.6	3.04%	$49.17	0.39	3.92%
PM	Staples	$2,244.89	17.01	4.40%	$98.78	0.91	5.44%
ROST	Discretionary	$1,512.97	18.33	1.06%	$16.04	0.65	3.66%
SO	Utilities	$1,092.25	17.41	4.81%	$52.54	0.19	2.65%
T	Telecom	$1,205.98	10.43	5.19%	$62.59	0.44	2.92%
TJX	Discretionary	$1,073.70	19.62	1.17%	$12.56	0.60	2.60%
UNP	Industrial	$1,202.96	21.32	1.83%	$22.01	1.05	2.91%
V	Financial	$216.25	24.63	0.74%	$1.60	0.77	0.52%
VZ	Telecom	$352.45	10.69	4.21%	$14.84	0.43	0.85%
WMT	Staples	$850.58	16.08	2.50%	$21.26	0.48	2.06%
XOM	Energy	$684.65	12.37	2.84%	$19.44	0.87	1.66%
O	REIT	$3,291.50	53.32	5.20%	$171.16	0.57	7.97%
Cash	Cash	$996.00
.	..	Total Sum (with cash)	…	Avg Yield (no cash)	Annual Divs	….	…..
		$41,283.10		3.30%	$1,328.92

Since I have added more into REIT, utilities, healthcare, a bit into industrials, and removed some of my positions in energy, I was able to balance my sector weightings closer to my goal. I still want to keep the majority of my portfolio in staples since I prefer to be more conservative.

Below is a graph showing the weightings of the various companies that I hold. I am happy that I am now less weighted towards the Kinder Morgan companies (nothing against the company though!). My weighting in O is currently very high but that will decrease as I continue to add to other companies in the coming months.

I continue to contribute to my company 401k and here is the list of Vanguard index funds that I still hold. The value of the funds has crossed the $10k mark.

Ticker	Sector	Market Value	Weight	Yield	Annual Divs
VBTIX	Bond Index	$993.58	8.92%	2.62%	$26.03
VIIIX	Large Index	$7,713.59	69.24%	1.87%	$144.24
VMCPX	Mid Index	$1,665.52	14.95%	1.14%	$18.99
VSCIX	Small Index	$768.14	6.89%	1.29%	$9.91
.	..	Total:	…	Avg Yield	Annual Divs
		$11,140.83		1.79%	$199.17