Recent buy: ABT & AMGN

I am liking the continual drops in ABT. I will continue adding as long as it keeps dropping below my last purchase price and I am still underweight.

I will also be adding to AMGN. Both ABT and AMGN are already set to be bought tomorrow morning and will help add more to my healthcare allocation.

ABT - $500
AMGN - $500

I also have cash on the side debating whether I should also buy other healthcare companies that I have been watching for a long time. These names include stuff like BDX, JNJ, MDT, and GILD all of which have fallen quite decently in the last several weeks. Stay tuned.

Website's chart pages have a new look

I have spent today upgrading how the charts look on the web pages so that it is easier to see more companies at once. I have also added even more names to the chart lists since my list of companies that I watch have since grown. Sub-sectors are now clearly labeled too to better group companies.

The charts are accessible by clicking any of the Chart links on the menu located on the right side of each webpage.

I now categorize companies into their specific sub-sectors. For instance in Consumer Staples I have added sections for Beverages, Tobacco, Food Products, Cleaning Products, etc... The charts are loaded from Scottrade and include the most available pricing back to 1 year.

I have set these pages up because I like to organize my watchlist into charts. These pages allow me to see what is happening in each sub-sector quickly. For instance, if I find that I am light on beverage holdings and would like to see if there are any good deals in beverage companies, I can open the Consumer Staples chart page and scroll down to the Beverage sub-section to see if there are any deals.

Recent buy: JNJ & ABT

Tomorrow morning the following shares will be added:

ABT - $300
JNJ - $300

ABT yields 2.22% today
JNJ yields 3.22%

Both are core healthcare positions in my portfolio that are buy and hold.

PM: Dividend increase

Quoted from their investor page:

The Board of Directors of Philip Morris International Inc. (NYSE/Euronext Paris:PM), today increased the company’s regular quarterly dividend by 2% to an annualized rate of $4.08 per share.

The new quarterly dividend of $1.02 per share, up from $1.00 per share, is payable on October 14, 2015, to stockholders of record as of September 30, 2015. The ex-dividend date is September 28, 2015. For more details on stock, dividends and other information, seewww.pmi.com/investors.

I view this as a healthy increase for a time when the foreign exchange rate of the dollar is incredibly bad for US multinationals. I believe their dividends are safe and that it is prudent that PM decided to keep the dividend growth in check until the dollar weakens. 

I am long PM and MO.

What sectors do I own in my portfolio?

I saw an interesting chart on FINVIZ's website that showed all the largest US companies in a treemap. They are sized according to their market cap. I decided to go through the groups and highlight what I owned.

Keep in mind that the size of the boxes are the company's market cap relative to the US stock market. Some companies I own are too small to be seen in this large map. Some of their categories are kind of weird though, for instance AAPL I would think more of as a Tech company.

This exercise showed me that I have a tendency to avoid tech and financial stocks. My companies are heavily consumer goods and healthcare. Plotting a pie chart of my portfolio sector weightings shows that I have to work on adding more in several sectors.

My preference for sectors is:

Staples > Healthcare > Discretionary > Utilities > Industrials > REIT > Energy > Financial > Telecom > Tech > Materials

My preference right now in the coming months is to add more to utilities and industrials.

My favorites are staples. They provide products everyone uses all the time no matter the economic situation. This helps guarantee the dividend and dividend growth. As time moves on and inflation kicks in, consumers will help fund the growth of the dividend to at least meet inflation. In recessions, people will still continue to shower, eat food, use the bathroom, and drink beverages. My favorite so far is MO.

My second favorite is healthcare companies. They provide us a service that people will be forced to pay for eventually if they want to stay healthy. The growing age of the American population will also demand more from this sector. My favorites that I own so far are JNJ and BDX. I have several names in drugs, medical tools/appliances, and biotech sections. I however want to eventually own something in the healthcare plans sector to complete the picture. I am eyeing big names like CVS, UNH, and ESRX all of which have speculator growth prospects and consistent earnings.

Discretionary stocks are more volatile but they have higher growth. Usually they have lower yield but higher dividend growth rates. Most of my holdings in this sector are speculative, as I do not have many core holdings in this sector. I will eventually like to own Home Depot or Lowes one day.

Ever since I started DGI, I have been waiting for the fed to raise rates before I add more to utilities. Hopefully tomorrow the FOMC meeting announces a rate hike but I have a feeling the fed will do nothing. Utilities are quite attractively valued at the moment and I have my eyes on the quality names like D and NEE, which can be seen in the FINVIZ plot above.

I find industrials to be very important for diversity in my portfolio but not essential. I prefer to own the highest quality dividend aristocrats in this category due to the highly cyclical nature of the sector. My favorites are MMM and UTX, both have long histories of dividend increases and steady earnings.

Financials: I have a dislike for banks but am willing to own service companies like Visa or Mastercard. I do not have a real desire to own insurance or fund management companies either. REITs can be classified as a financial but I group them in their own REIT category. In general I am rather hesitant to own most REITs except "O".

Telecom stocks I only want to own two names: T and VZ. I find the sector to be very low growth and both companies have huge debt. I own these companies for the yield. I don't expect them to grow much. The industry is capitally intensive and price wars are threatening. Since I only want to hold these two quality names, the weightings for this sector will always be low. 

Although I work in the tech industry, I try to avoid it in my portfolio. The industry is too volatile and unpredictable.  Companies must always continue to be cutting edge or face eventual death. This can be seen with old companies like IBM. The only companies I am willing to own that is a quality DGI stock is ADP, but it's too expensive. I hold Apple for speculative reasons only. Due to my preferences, the tech sector will always be a small % of my portfolio.

Energy and materials are highly cyclical sectors for me, which makes me want to keep my exposure on the lower side. Like REITs, I do not trust many names in this cyclical sector. The only name I trust is "XOM". I can sleep well at night with XOM like I can with staple stocks like CL or KO. Every other energy company has me a wee-bit nervous during a downturn (like now!)

For materials, I tend to want to avoid industries like metals, timber, and mining. The sector is way too volatile (take a look at BBL's stock graph for instance). The companies are heavily dependent on commodity prices, which has a tendency to fluctuate wildly.  prefer guaranteed earnings which helps me sleep better knowing that dividends will be covered with good quality earnings. The only names I want to own in this sector are "PX" and "APD", both are solid dividend growth names with very consistent earnings. Since I do not have a large desire to own a lot of material stocks, the sector will always be a small %.

Recent buy: PM & ABT

Adding the following tomorrow morning:

ABT - $400
PM - $300

ABT yields 2.2% and PM yields 5.0%

Both are dividend champions (if you consider that they used to be part of companies that were dividend champions before the spinoff). I did not add much this week because I want to hear what the Fed has to say this week. I feel that these two companies are conservative and are high quality heading into the next FOMC. I also want to add to PM before the dividend raise announcement this week. ABT has an A+ credit rating and PM has an A credit rating.

Jefferson Research's latest quality ratings say the following about ABT and PM:

PM
Earnings: STRONGEST
Cash flow: STRONGEST
Operating efficiency: STRONGEST
Balance sheet: STRONGEST

ABT:
Earnings: WEAKEST
Cash flow: STRONG
Operating efficiency: STRONG
Balance sheet: STRONG

ABT has recently spun off so it may be hard to judge valuation and earnings compared to ABT's long historical records. Both companies will be influenced by the strong dollar but I believe in the long term both will be fine as the dollar will eventually revert to the mean.

O: Dividend increase

On 9/9/2015 Realty Income announced a raise of the monthly dividend to $0.1905 per share. This is an annual dividend of $2.286 (assuming this dividend times 12). This will be payable to shareholders on record 10/1/2015. This is a small 0.26% dividend increase. Realty Income is known to increase their monthly dividends often (many times per year).

In October of 2014, the payment was $0.1831042. The presently declared dividend is 1.04x the one paid last year. Not bad for an increase for a consistent REIT monthly dividend payer. With the current dividend, O yields 5.07% as of today.

Realty Income is a core holding in my portfolio. All dividends are reinvested to buy more shares.

August 2015 Portfolio Summary

My portfolio as of 9/8/2015 stands at the following: $122,243

August was an extremely volatile month. Illustrated below is a graph of what happened to the S&P500. Towards the end of the month, we saw correction level drops in the DOW, NASDAQ, and S&P500. There was a large rebound but ultimately the month finished off quite a lot worse than it started.

During the drop there were many opportunities that arose. I took some time to pickup some staple names that are core to my portfolio. These include ABT, JNJ, and CL. I am hoping the

Although I am not a charter, I think it's interesting to look at graphs once in a while. The S&P500 is now below the SMA 50 and SMA 200 moving average. There has been a so called "death cross" earlier. I am hoping there will be further downside so that more of my watchlist can hit their buy targets.

Recent buy: JNJ, XOM, WMT

Continuing the same purchases as last week. Unfortunately today's prices were higher so I couldn't get such a good buy price :(

JNJ - $400
XOM - $400
WMT - $200

I am expecting a dividend increase from PM this week.

August 2015 Dividends Received

August was another month of healthy dividends. No dividends have been cut or reduced so far. The portfolio continues to make new highs in dividend received per month. All dividends are set to be reinvested immediately so far. As of posting today, the portfolio is set to earn around $3910 in dividends per year. As of recent, MO has increased their dividends by 8.65%. I expect PM to release news of a dividend increase this month as well.

Ticker	Total Received	Taxable Accnt	Roth Accnt	401k Accnt
AAPL		$11.53
ABBV		$31.53
CL		$8.08
GIS		$16.98		$11.53
HCP			$24.86
KMI		$70.14
O			$25.62
PG		$17.84
SBUX		$6.11
T		$55.92
VZ		$18.72
	$298.86	$236.85	$50.48	$11.53

Recent buy: JNJ, XOM, WMT

Unfortunately, the market bounced up sharply in the last couple of days. Although the price has not recovered completely it has made many stocks I had on my watchlist not as attractive. I will wait for a further pull back on those "favorite" dividend aristocrat names until another day when they come back down. In the meantime I will slowly add to the following core holdings:

JNJ - $400
XOM - $400
WMT - $200

For reference my "favorite" dividend aristocrat names that I am interested in right now are JNJ, CL, MKC, MO/PM, BF.B

Here's a picture of the S&P500 showing what happened last week. Talk about a volatile trading session! For us dividend growth investors, these fluctuations in market price only present us with buying opportunities from time to time. In the mean time, enjoy the growing dividends coming in every month :)

Recent buy: ABT, CL, JNJ, KMB, PG

Today was a blood bath. Either way, I will be continuously buying shares every month. This week I will be adding $1150 to several well known dividend aristocrats. The buys will occur on Tuesday morning. ABT dropped 7.24% in one day! Many of the other names have also dropped as well and I will take the time to dollar cost average in.

ABT	ABBOTT LABORATORIES	$300.00
CL	COLGATE PALMOLIVE CO	$350.00
JNJ	JOHNSON & JOHNSON	$200.00
KMB	KIMBERLY CLARK CORP	$200.00
PG	PROCTER & GAMBLE CO	$100.00

To give a picture how the selloff is going so far here's a picture of the S&P. We're around the lows in October, except this drop has been much more sudden. My strategy for situations like this is to tune out the noise and invest in quality names that I will hold onto forever.

MO: Dividend Increase!

I'm excited to say that today, Altria Group (MO), the seller of Marlboro cigarettes in the USA, has announced a dividend increase of 8.7% to $0.565 per share compared to the pervious $0.52 (paid quarterly).

Altria has historically increased the dividends very steadily in the 8-9% region for many many years. I find the fundamentals of the company very promising and will plan to add more if the correction in the market continues. At the moment I am overweight and will prefer the yield to be over 4.5%.

Recent buy: MA, JNJ, MMM, UTX ...

The following dollar amounts were added to my portfolio today (some will be executed early morning tomorrow).

MA - $2340

JNJ - $300

MMM - $300

UTX - $150

KMB - $200

XOM - $150

In total $3440 was invested this week. This is around $48 in annual income. The dividends are low since MA has a very low dividend. The MA's purchase is an emphasis on dividend and capital gains growth.

For MA: 

Morningstar assigns a fair value of $106
S&P assigns a fair value of $124. S&P gives this company an A- credit rating.


Jefferson Research has the following quality ratings for MA:
Earnings: STRONGEST
Cash Flow: STRONGEST
Operating Efficiency: STRONGEST
Balance Sheet: STRONGEST
Valuation: MEDIUM RISK


This is a decent enough discount for me to begin a starter position for a quality company.

Purchase plans for next week

The energy sector:
The current environment for oil and gas is providing us with depressed share prices in many large companies such as XOM, CVX, COP and even pipelines such as EPD and KMI. I am however quite cautious about many of these companies in the current environment. If the price per barrel were to remain low for an extended amount of time, I can foresee companies such as COP or CVX having to pause or cut their dividends.

At the moment I am overloaded in KMI so I cannot add more. I am also hesitant to add more because of KMI's debt levels. If I were to add another pipeline it will either be MMP or EPD but both are not low enough for me. My desired buy range will be 50% drop from the top.

Out of all of the oil giants, the only one I am willing to dollar cost average is XOM. The other company I hold is CVX. Both are dividend aristocrats and have survived numerous oil busts. XOM is definitely the stronger company at this moment and CVX has many huge megaprojects that are very expensive. CVX is definitely betting on the rise of oil prices in the future and will benefit more from rising share prices than XOM if oil prices rise.

I am not a fan of chasing yield. I prefer looking at the overall market environment. At the moment XOM I believe is capable of covering the dividend with sufficient margin. XOM's latest earnings were much better than CVX's despicable $0.3 per share (a -73% surprise!). XOM was also able to increase their dividend at a very nice rate this year too. At the moment I would prefer CVX to hold their dividends flat for as long as they see fit to be financially secure. If the price of oil continues to be depressed below $50 I will start to become worried about CVX's dividend coverage. I am dripping dividends on both XOM and CVX, but will only reinvest new capital into XOM at the moment. I need to see an uptrend in oil prices before considering CVX.

Credit Cards:
I want to add another company into my portfolio that is in the credit card business. Currently I have a holding in Visa. I plan to buy some MasterCard next week with new funds. I believe MasterCard and Visa will both profit healthily from the move to cashless spending in developing countries. Growth internationally will increase profits for both companies and I want to be part of that. MasterCard is smaller than Visa in market cap so they have more room to grow. At the moment, S&P and Morningstar are placing MA undervalued 9% to 20% while Visa is fair valued. Since I hold too much Visa I might as well buy some more MA to diversify.

Both V and MA have very low dividends but high dividend growth. I am not buying either of these companies for their dividends. They are growth plays but I consider them less speculative than my other growth companies such as SBUX or AAPL. I see V and MA as essentials in modern society just like consumer staple stocks. We have to use them in our everyday lives to function. I myself never use cash anymore since carrying cash and going to the ATM for cash is just so inconvenient. I also use credit cards exclusively for their cash back and benefits. Consumers in developing nations will see the light and eventually convert to cashless spending..

Industrials:
Depressed oil prices and the drama over coal shipments have sent shares of my favorite railroad UNP lower. Other railroads such as CSX and NSC are lower as well. UNP in my opinion is the strongest railroad and the one I want to own most. I want to build up my position in UNP first before buying other railroads. However I need UNP to drop further into the 80s range before buying more since I bought some a couple weeks ago.

I will be adding more to my position in UTX. UTX has one of the most consistent earnings and cashflow out of the industrials I survey. My favorite industrials are MMM and UTX. I prefer MMM more for their history and diverse portfolio. The market has started hating UTX in the last couple of weeks for selling their Sikorsky Aircraft unit to LMT. It has dropped by over 17% so I plan to take advantage of the sale!

MMM has dropped in value by around 12%. It's not a noticeable drop to be excited about but I always am looking for a chance to drip more into MMM. MMM is a dividend king with many decades of dividend increases. MMM has a solid moat and steady earnings & cashflow even during cyclical times. MMM is my favorite industrial company to hold and I will be moderately dripping as it falls.

For pictures of UTX and MMM's historical earnings and dividends graphs, look at my favorite dividend stocks page: http://www.youngdividend.com/p/favorite-stocks.html

Misc:
Since I have 12 trades to use in a month I may add additional small buys to various core staple companies such as WMT, JNJ, CL, etc. I am always open to buy these core companies that are in the consumer staples business even if shares are not at a noticeable discount since my holding timeframe is forever.

For reference, I DRIP all of my investments. Dividends are immediately reinvested in the company that paid the shares.

Recent buy: DIS

I added $1000 in Disney today. Disney is not a high yielder as its yield is 1.22%. I hold it for the growth prospects. I took the recent pullback as an opportunity to weigh more into my existing shares. Below is a graph showing the recent drop.

Watchlist: MLPs, EPD and MMP

There is blood on the streets in the energy sector. Companies responsible for the drilling and discovery of oil are hardest hit. Large corporations that are involved in both the upstream and downstream are more sheltered. Out of all the companies I am most confident in XOM's ability to succeed through this mess. They have recently increased their dividend by 5.80% and with their strong balance sheet and AAA credit rating, they are the most likely to survive out of everyone.

I do not particularly enjoy having my assets tied to the price of oil but am willing to buy names of high quality. Midstream companies participating in the transportation of oil can be a way to reduce sensitivity to oil prices. My favorite companies in the pipeline business is KMI, EPD, and MMP. EPD and MMP are the highest quality MLPs on the market with a credit rating of BBB+, strong cash flows, and a good track record of dividend payments. I only own KMI at the moment and want to add more to EPD and MMP. Below I will describe my thoughts for the coming weeks as EPD and MMP are now hitting close to my price targets.

EPD has fallen by more than 36%. There is officially blood on the streets. Compared to 2008-2009 I would say that I will be happy with a 50-60% correction from the high. EPD has been increasing dividends for 18 years straight and here are the percentage increases for the last several years:

5.9

6.6

5.3

5.3

5.5

5.9

6.8

6.7

8.1

9.8

4.9

8.7

14.8

12.8

10.8

The average dividend increase is 7.9% with a deviation of 2.9% which is very consistent. With a 5.88% yield today growing at 8% this is a strong holding for the future.

Jefferson Research's ratings of EPD's earning power is strong. MMP is more attractive from a performance standpoint. However EPD is of better value. In the end both still have strong cash generating abilities in the current environment.

Earnings quality: Strong

Cash flow quality: Strongest

Operating Efficiency: Weakest

Balance Sheet: Weak

MMP is still overvalued in my opinion and I feel that it will have time to drop. I think a price around $60 will make me very interested. A correction of 50-60% like the last recession will make me very interested. MMP has a faster dividend growth rate than EPD which is why it has a higher P/CFL ratio. MMP has been increasing its dividend for 15 years. The recent increase % are:

19.4

17.6

14.6

7.1

2.4

4.3

9.2

9.1

16.3

14.3

12.2

18.9

79.9

The average is 15% and the deviation is 18.5%. The yield is not very high for an MLP but I believe it may go over 5% if the bear continues.

Jefferson Research's ratings of MMP is very strong. This is what I like to see in quality companies.

Earnings quality: Strongest

Cash flow quality: Strongest

Operating Efficiency: Strong

Balance Sheet: Strong

I am considering trading my position in CVX for MMP and EPD. And then drip additional capital acquired in the coming months into MMP and EPD. Selling a depressed oil sector stock to buy another depressed oil sector stock which have both comparably declined is something I'm considering since CVX has not raised its dividend after 4 quarters. However, my history usually tells me I do better off when I don't do anything at all! So I'm debating removing CVX. Officially though, the dividend growth per year of CVX is still considered "increasing" (if you look at a per year time window). Presently I have more confidence in XOM than CVX in the E&P sector. But both are the strongest names in the business.

I did not include KMI in this post because my position in KMI is heavy and I will only consider it if the company's price is at a 50-60% drop from its all time high. I will rather diversify to other companies.

Recent buy: MMM

Tomorrow morning, $300 will be automatically invested in MMM. 3M yields 2.73% today. I'm adding slowly into 3M since I love the company but think that there is a better price. I want to eventually hold a full position in 3M. 3M is one of those companies with a large moat, strong credit rating, huge dividend history, reasonable growth and earnings history. I consider it one of those companies that I will be happy to add on the fall without worries. -YD

July 2015 Dividends Received

Time is flying by! Another month has passed and another month of dividends have been collected and put to work in my portfolio. The table below lists what dividends I have received this month. All funds have been reinvested except TROW (the position was removed from the portfolio).

Ticker	Total Received	Taxable Accnt	Roth Accnt	401k Accnt
DIS	$8.71	$8.71
KHC	$28.28	$28.28
KMB	$15.79	$15.79
KO	$30.49	$23.23	$7.26
MKC	$16.08			$16.08
MO	$25.21			$25.21
MO	$70.27	$70.27
O	$19.46		$19.46
PM	$28.00			$28.00
PM	$58.97	$58.97
TROW	$7.85	$7.85
	$309.11	$213.10	$26.72	$69.29

This month I have met my original goal with some additional extra dollars. I am slowly creeping towards $300 for all months which will most likely be met by the year end. As it stands at the moment, I am expecting $321 in forward dividends for October (the next quarter). The chart below shows my dividend progress.

It is satisfying to see the amount of cash received every month increase. Although I am reinvesting all the proceeds back into the companies that paid the dividends, I can if desired pay for my food and utilities with the dividends so far. The next goal is to pay for my housing costs completely with dividends!

Recent buy: UNP, UTX, MMM ...

CVX	CHEVRON TEXACO CORP	$100.00
KMI	KINDER MORGAN INC DEL COM	$150.00
KO	COCA COLA CO	$100.00
MMM	3M CO	$250.00
UNP	UNION PACIFIC CORP	$100.00
UTX	UNITED TECHNOLOGIES CORP	$100.00
XOM	EXXON MOBIL CORP	$100.00

This week was a spray across various companies I wanted to add onto. I like the undervalue of some industrials and energy stocks. I prefer to buy quality names when things are looking down. MMM and UTX have long dividend histories and are of higher quality. Same with CVX and XOM. Buying the dips, tune out the noise, & reinvest dividends.