The stock market is once again near all time highs making it difficult to find under valued stocks. As always, I plan to make a purchase this month. In order to build a passive income stream, I must buy income producing assets. It's pretty simple. Holding cash is not a bad idea right now, but I cannot predict the future. Averaging in over time is a strategy that makes sense to me and has worked well for me in the past. I'm looking to increase my position in a super high quality name this month.
Procter & Gamble:
Wow it has been two years since I've bought PG shares! PG is a dividend king (50+ years of increases) and one of my favorite companies in the world. The reason why I have shied away from buying PG has more to do with allocations than anything else. My portfolio is reaching the point where I can start increasing my core positions again. I'm pretty excited about that! With a 3.0% yield, PG is looking attractive as a long term position. It is well above my cost basis right now, oh well, that's what happens to strong stocks. I'd be very interested in picking up shares around $77-78 if we happen to see a decent dip.
Chevron:
CVX is another dividend champion and favorite of mine. I am actually underweight CVX at the moment and would have no problem scooping up a few shares. I plan on selling some of my other energy positions in the near future which would leave me a lot of room to pick up CVX and XOM. Last month I thought XOM had an edge in valuation, this month CVX is looking a little more attractive to me. It is currently yielding about 3.3% and would make a nice contribution towards growing my passive income stream. I'd be interested in adding shares around $117-119.
Southern Company:
SO is a small position that needs a boost in share count within my portfolio. This is my favorite utility and one of my favorite dividend growth stocks to boot. I think SO has a bright future, I definitely want to be a part of it. I would classify Southern as fairly valued at the moment. Not under valued. That's okay because this is surely the highest quality utility around. Yeah the dividend growth is a bit low, it's true. On the other hand the yield is pretty nice and the increases can be counted on. I'm looking to add a few shares around $42-43 if possible.
I'm going to buy something this month, it's just a matter of when. The three companies listed above are my top choices at this point in time. I am also considering KO, XOM, and GIS.
CI, I agree with you, that it is hard to predict the future - will the stocks drop or will they continue in this crazy run? You never know. However I will stick to my cash building plan during run ups and investing that cash during drops.
ReplyDeleteYes I am waiting for a decent drop too! If not, I'll just plop down some cash the last week of the month to increase my passive income stream. I'm hoping to see at least a little bit of progress every month. That's what keeps me motivated!
DeleteThanks for the comment and visiting my little part of the internet!
I need to add more dividend stocks to my portfolio but havent done the research needed to add any new positions. I like the idea of PG or CVX not sure on SO though as I dont know much about them. The markets are up and down but I need a nice dip before I scoop anything up right now. I also need to find my price points hopefully you get the drop you are waiting for. Nothing like passive income.
ReplyDeleteI also hope for a dip in the next week or two. I don't think PG is especially cheap right now. It appears to be trading a little bit over fair value. I don't mind paying a small premium for Procter & Gamble though.
DeleteThe market had another big day. Hmm..
CI,
ReplyDeleteI picked up some CVX and PG in the last few months. My portfolio's also finally building up to where I feel I can add to some core positions again. Well except for MCD although I think I got in on that at some great prices. It's still 9% of my portfolio but it's coming down with every purchase I make. I'd need about a 15% drop before I'd want to add to my position anyways so I'm in no hurry. Hopefully we can get a choppier market because that leads to some great opportunities. Although I hope it continues to rise since I'll be allocating less capital to my FI portfolio since my wife and I are probably going to buy a house later this year.
Awesome! I'm happy for you guys!
DeleteI found out earlier today that I am entitled to a nice sum of money (from my recent move) that I wasn't expecting. I probably won't see the payment for a month or so however, and there may be extra paper work. Oh boy... I'll go through the headache for enough cash to buy a new position any day of the week.
I own all but PG. I don't think you can go wrong with these. I missed PG's big drop last year and haven't added due to the huge price increase and my already large allocation to the sector. I would be looking to add more SO since my utility exposure is still low.
ReplyDeleteThere are a few that have eluded me as well. At some point I need to get my hands on GPC, KMB, and MDT for instance. We'll see they are all pretty pricey at the moment.
DeleteIt's tough to build a portfolio with perfect proportions. I'll worry more about that when I'm done accumulating assets.
You may want to add to position that will balance out your dividend income stream so you are receiving about equal income each month instead of one quarter with a big lump and 8 months of low inflow.
ReplyDeleteThanks for the tip! That may be something I look at when I'm closer to retiring. Right now I simply track my progress quarter to quarter which smoothes over the monthly fluctuations. July income will be lower than June for example. However, I expect to bring in more Q3 compared to Q2. At the end of the day that is what I am attempting to accomplish.
DeleteNow if I had to live off the income I may want it to closer to equal.
Great picks -- love them all. Don't think you can ever really go wrong with these gems over the long haul.
ReplyDeleteThanks buddy. Hope your real estate ventures are proceeding as planned. I know there is a lot of money to be made there.
DeleteAll look like solid picks overall, I'd love to have any of those in my portfolio. GIS's ex-div date has just passed though and PG's is on the 17th so you better hurry if you want in before that.
ReplyDeleteWell PG is out of the picture again since it jumped up to $81.50. I'll be on the lookout in the future however. Yeah I don't have anything in mind for a buy at the moment, everything is looking pretty pricey...
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