Recent buy: PX, PH, ABBV ...

The following buys are:

Symbol	Description	Amount
ABBV	ABBVIE INC	$500.00
BAX	BAXTER INTERNATIONAL INC	$200.00
EMR	EMERSON ELEC CO COM	$200.00
JNJ	JOHNSON & JOHNSON	$200.00
KO	COCA COLA CO	$300.00
PH	PARKER HANNIFIN CORP	$1,150.00
PX	PRAXAIR INC	$1,300.00
UTX	UNITED TECHNOLOGIES CORP	$150.00

I will be adding CAT later this coming week as more funds arrive. The PRAXAIR buy was a recent decision I made over the weekend. The numbers are very nice:

22 year dividend increases (almost a dividend champion!)
Yield of 2.23% (not too shabby)
Recent year dividend increases of 8.3%, 9.1%, 10.0%, 11.1%, 12.5% (Chowder rule of 12.6 which is very nice)

The credit rating is very good at A. The earnings history is very impressive and consistent. The business does not seem as cyclical as the industrial sector purchases I made this week. The 2008 recession only saw a minor dip in earnings. The PE right now is attractively valued.

S&P fair value: $136.50
Morningstar fair value: $134.00
Today's value: $128.39

Jefferson Research rating:
Earnings ... STRONGEST
Cash flow ... STRONGEST
Efficiency ... STRONGEST
Balance ... STRONG
Valuation ... LOW RISK

From Fastgraphs, S&P, Morningstar, and Jefferson analysis I would say PX is fair value.

Upcoming buys - Industrials

I have been inactive most of this month so my cash pile has been increasing. I will be making a few buys this week and many small buys. The larger buys will be the following with the highest amount no top. The theme this time is Industrials:

CAT
EMR
PH
ABBV
PNY
JNJ
KO

CAT is highly cyclical. However it is a very world renown brand and has been paying dividends for 21 years with a strong dividend increase history. Jefferson research rates the stock as the following:

Earnings - Strongest
Cash flow - Strongest
Efficiency - Strong
Balance - Strongest
Valuation - Low Risk

CAT has a payout of 45%. CAT has a S&P credit rating of A. S&P gives CAT a fair value of $89.8. FastGraph shows it dipping a bit below the 15 year average PE. I do believe it is of fair value and will add it to my 401k once the funds are received later next week.

I will be adding more to my EMR position which I started couple weeks ago. EMR has 58 years of dividend increases although the growth is lower than CAT. EMR payout is moderate at 55%. EMR has a credit rating of A and S&P gives it a fair value of $59.7 which is around what it is today. FastGraphs shows EMR as below fair value. Both EMR and CAT will help me increase my industrial sector exposure. Both EMR and CAT have over 3% yield.

Another stock to note is PH. The yield is around 2% so it's on the lower side. However the stock makes up for that with the growth rate which was 16.3%, 9.9%, 13.3%, 33.6% for the last 3 years. Jefferson gives PH the following ratings:

Earnings - Strongest
Cash flow - Strong
Efficiency - Strongest
Balance - Strongest
Valuation - Low Risk

S&P gives PH a fair value of $146 which is less than what it is today. FastGraphs also shows that the stock is around fair value. PH has a low payout ratio of 28%. The debt/equity is low at 0.52. S&P gives PH a solid A credit rating.

CAT is the most volatile during bad economic conditions compared to EMR and PH. Increasing my exposure to industrials will increase the volatility of my portfolio. However, I have so much invested in consumer staples and blue-chip names that I am open for slightly more volatility.

In addition to the three above, I will dip more into some more healthcare (JNJ and ABBV both dipped recently) and add more to KO with the new dividend increase. I am very happy at the over 8% dividend increase even with the currency headwinds.

Falling sector: Utilities

With the rumor of rate hikes, the utilities sector has taken a beating. I have already identified several names that I will be happy to own. However, they are still overvalued and I am still waiting on the sidelines. Utilities are only 1% in my portfolio so I am looking forward to add if possible.

PNY

SRE (way overpriced....), WEC, XEL, AVA, LNT, D, SO, NU, NEE, DUK

A lot of those listed above are still nose bleeding expensive compared to the index. Some like SO and AVA are approaching better values.

Recent buy: EMR

I will be purchasing $520 of EMR tomorrow. I feel that EMR provides a good entry point price right now. I will continue to add on weakness as I am looking to expand my industrials sector. I am also hoping that the utilities and REIT sector will fall further in anticipation of rising rates. I need more exposure to REITs and utilities for diversification and higher yields.

EMR facts:
55.5% payout ratio
3.28% yield
18.21 P/E
14.05 Forward P/E
115,100 employees
1.30 Beta
20% Debt / Cap
A+ Credit Rating (Morningstar)

Jefferson Research Report:
Earnings quality: Strongest
Cash flow quality: Strong
Operating efficiency: Strong
Balance sheet: Strongest
Valuation: Least risk

Updated Goals and About Me page

I have updated the Goals and About Me pages.

Watchlist: 2nd week February

I did some research on S&P and Morningstar to compare which companies on my watchlist had prices that were below their recommended fair value. I am willing to pay at fair value or slightly above fair value for a core holding. I will only pay for supporting and speculative positions when they are at a reasonable discount.

These reports were released on 1/27/2015 to 1/31/2015

Ticker	Price 2/4/2015	Morningstar Fair Value	Morningstar Price/FairValue	S&P fair value	S&P Price/FairValue
MSFT	$41.84	$46.00	90.96%	$46.60	89.79%
GE	$24.16	$30.00	80.53%	$26.80	90.15%
MA	$84.18	$88.00	95.66%	$98.10	85.81%
EMR	$57.33	$69.00	83.09%	$59.20	96.84%
CSX	$34.57	$35.00	98.77%	$36.00	96.03%
IBM	$156.96	$196.00	80.08%	$208.20	75.39%
UTX	$117.79	$116.00	101.54%	$126.30	93.26%

Ticker	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
MSFT	14.20	16.87	2.96%	2.02	1.02	0.31	47.20%
GE	13.20	16.00	3.81%	2.16	1.43	2.85	49.20%
MA	23.61	27.15	0.76%	1.62	0.93	0.22	14.20%
EMR	13.70	18.80	3.28%	2.35	1.33	0.60	56.00%
CSX	14.35	17.91	1.85%	1.68	1.33	0.87	27.20%
IBM	9.34	9.97	2.80%	2.21	0.62	3.44	20.30%
UTX	15.24	17.27	2.00%	1.88	1.12	0.59	34.20%

The best Price/FairValue include MSFT, GE, and IBM. I am waiting on IBM to report earnings that show growth before I invest, otherwise I see it as a depressing company to hold. I am considering GE and MSFT since they both offer over 3% yield, but would not consider these holdings to ever be core due to their dividend history.

MA looks like a good growth play here. PE is higher than what I would like but you pay more to hold a growth company. The dividend is small but he dividend growth is very large, like Visa. I like MA for its moat, low debt, low PEG, and impressive growth.

EMR is another good industrial dividend aristocrat currently yielding over 3%.

I consider UTX and CSX to be fair value. Since I am very light on industrials, I am keeping GE, CSX, and EMR on my watchlists.

Recent buys: KMB, PG

Nothing exciting this week. Still have spare cash sitting on the sidelines since I don't feel compelled to use it all yet.

KMB: $200
PG: $200

They're both above 3% yield right now. Will add around $12 annual divs.

Recent buys: KMB, PG, KRFT

Bought the following:

KRFT - $500
KMB - $650
PG - $450

PG and KMB both have depressed prices after earnings. Took this time to dip more. Currency headwinds are pushing several stocks lower. The coming weeks may provide decent buying points for several stocks.

Dividend growth 2014

Although I only started investing in DGI stocks sometime in the middle of 2014, I have tabulated what the dividend increases would have looked like for all the holdings in my portfolio had I been in DGI since the beginning of the year.

Ticker 2014 v 2013 AAPL 9.50% BAX 7.45% CHD 10.71% CVX 7.95% DIS 14.67% GIS 13.38% HCP 3.81% JNJ 6.56% KMB 7.17% KMI 8.97% KO 8.93% KRFT 4.76% MCD 5.13% MKC 8.82% MO 8.89%

Ticker 2014 v 2013 O 2.06% PEP 13.06% PG 7.01% PM 11.17% ROST 17.65% SBUX 23.60% SO 3.48% T 2.22% TJX 21.82% UNP 21.96% UTX 7.52% V 20.86% VZ 3.13% WMT 5.67% XOM 9.76%

The total increase after including the market weights for each position in 1/26/2015 is:
9.96% 2014vs2013 Div Growth Rate

2.94% Present Yield

The results are quite impressive. You will notice that the lower yielding stocks had higher growth rates than the high yielders. My goal was to aim at having a Chowder number of 12. The 2014 results have currently surpassed that goal. Realistically I would be happy with any growth rate over 8%. The market in 2014 was an easy time to make gains. I will be very curious to see how these dividend stocks will fare out during a recession. Time will tell...

Notable stocks:
GIS impressed me a lot. It is a steady 3% dividend payer with a strong track record and low volatility. Yet it was able to manage a 13.38% raise. Phillip Morris (PM) is another notable stock with an 11% raise with a present yield of 4.83%.

Note: The dividend growth data was obtained from the U.S. Dividend Champions spreadsheet put together by David Fish. It is up to the reader to verify the accuracy of the numbers. Certain companies are not on the Dividend list because they are new or they are spinoffs or they are new to paying out dividends. Those stocks (AAPL, KRFT, KMI) that are not on the list had their data taken from NASDAQ or Morningstar. Slightly different growth rates will be calculated depending on when one starts and ends the the dividend payments for a year.

Watchlist: last week purchase

Still on my plan to purchase next week are AT&T, Kraft, and Philip Morris.

New to my watchlist this week are KMB and CL. KMB has the favor due to its lower PE and higher yield.

KMB: Kimberly Clark reported earnings today and it was not received enthusiastically. There was a 6% sale. If the price continues to fall I will be adding it as a purchase on Tuesday. I wish to add below 100, preferably at 105.

CL: Colgate has a lot of business overseas and at the moment the US Dollar is incredibly strong. Currency headwinds will have an affect on the company's performance. Although the stock trades at a premium, I wish to add below 66, preferably at 63.

It is rather interesting that the plots of both of these consumer staple companies have quite similar shapes in the last year.

Recent buy: T

Added $350.00 to AT&T

Yield is a healthy 5.54%. Will add $19.4 a year.

Watchlist: high yield

As I ponder my coming week's purchase, I am having difficulties in finding 3%+ yielding stocks. Many DGI stocks that I would love to purchase at fair value are approaching values that I consider too expensive. Below is a table I tabulated showing which stocks have yields above 3% that I am considering.

Note: Please double check the values' correctness if you are going to use the data. They were fetched off Finviz's website using a script I wrote.

Staples	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
PM	17.12	16.61	4.84%	2.85	0.91	No Data	61.90%
RAI	18.15	22.91	3.97%	2.71	0.50	1.10	86.40%
MO	18.99	24.33	3.92%	3.15	0.50	3.26	89.90%
DEO	17.92	20.48	3.75%	3.10	0.86	1.35	27.60%
UL	19.47	20.18	3.42%	4.92	0.79	0.97	30.40%
KRFT	19.54	16.65	3.35%	2.57	No Data	1.79	66.60%
GIS	17.63	22.35	3.07%	3.63	0.16	1.86	65.70%
SYY	19.64	25.65	3.00%	3.64	0.75	0.57	73.20%

Of the stocks above, I consider PM, MO, KRFT, GIS, and SYY as solid dividend stocks (MO+PM+KRFT used to be one company before the spinoffs). I have been slowly adding to PM in the last couple weeks. The position is getting rather large and I am a bit concerned with their debt load and the foreign exchange rates. My position in GIS is too large as well. I may add to KRFT even with its recent price rise. It offers a high yield with a moderate PE, and I consider KRFT to be core so I am willing to buy at fair value. SYY's dividend growth is too low for me (less than 12% chowder ratio).

Discretionary	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
MCD	16.83	17.97	3.72%	3.47	0.35	1.11	63.30%

Most discretionary stocks have low yields except McDonalds. I do not plan to add to MCD because I believe they are in a transitional period where future growth will remain stagnant.

Energy	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
CVX	18.11	9.68	4.07%	1.74	1.14	0.16	37.80%
KMI			4.24%	3.85	0.67	3.02	139.20%
XOM	18.67	11.46	3.03%	11.76	0.88	0.12	33.20%

With the fall in crude oil, I believe these are the safest bets in the energy sector. However, I want to wait a bit longer since I feel that the turnaround isn't happening as of yet.

MLPs	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
EPD			4.30%	3.35	0.70	1.25	180.60%
MMP			3.40%	1.46	0.52	1.65	70.00%

These MLPs' prices have been volatile lately due to the fall in the price of a barrel. I am highly considering EPD if it falls below $31. MMP is a bit expensive still for me. I am not a fan of owning MLPs because of tax complications.

Industrials	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
GE	13.43	15.94	3.90%	2.27	1.44	2.77	52.50%
CAT	12.28	13.57	3.34%	1.22	1.67	2.09	39.70%
EMR	14.11	19.79	3.12%	2.43	1.32	0.60	56.00%
LMT	16.92	19.69	3.08%	2.03	0.63	1.35	52.80%

I may consider adding to LMT. They are around fair value compared to their 15 year average PE. EMR may be another stock I will consider, as it has a high credit rating and solid dividend history. I do not like CAT due to its volatility or GE due to its past dividend record.

Telecom	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
T	13.17	10.37	5.56%	2.25	0.36	0.82	56.00%
VZ	12.89	9.96	4.58%	1.19	0.33	6.59	43.90%

I will most likely add to my position in T. I prioritize T over VZ due to the credit rating, and my position in T is not nearly as high as I would like it. I want T to be a large core holding in my portfolio.

Healthcare	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
ABBV	14.97	27.94	3.04%	2.05	No Data	3.18	70.40%

I have not done enough research on ABBV so far. The debt, PE, and payout ratio are making me uninterested.