Monday, June 30, 2014
I think PG is decent buy right now for long term investors. Awesome company. In fact this company is so awesome it has increased dividends the past 58 years. Go ahead, start a corporation from scratch right now and try to match that feat. You probably have betters odds of winning the lottery... Procter & Gamble was able to achieve greatness because of branding, innovation, and catering to consumer needs. Huge moat.
A 3.27% yield for PG is pretty solid in my opinion. I bought shares in June 2011 for a little over 65 bucks a share. Guess what the yield was when I did the purchase... 3.20%. Then I bought more in July 2011 on a nice dip and scored a 3.38% starting yield. The current yield is nothing to sneeze at especially in comparison to other dividend growth stocks which are obviously over valued. The only thing about PG as an income source is that its payout ratio crept up in recent years. I'll have to monitor that, but dividends are by no means in danger at this point. Worst case scenario is that dividend growth slows down a bit.
PG now has a dividend weight of 3.76% for me. I'll consider adding more at these levels until it gets over 4%. I want core stocks (PG, PEP, KO, JNJ, CVX, MCD, PM) to have dividend weights of 3-4%. I'm underweight JNJ and overweight PM, other than that it looks good.
4 shares BAX, 2.82% yield, $8.32
1 share GE, 3.27% yield, $.88 (FRIP purchase)
With these purchases GE now has a dividend weight of 0.78%, 0.71% for DE, and 1.77% for BAX.
It makes sense to add these stocks are current levels not only because of weightings, but also because they appear slightly (BAX, GE) to moderately (DE) undervalued. GE is creeping down towards $26. Gotta love that, but it would obviously be better closer to $25. DE is hanging around $90-92, which I appreciate since I plan to add more. BAX's stock price went down since I bought it the other week. Good news for accumulators.
I'm looking to increase ownership in these businesses next month if Mr. Market continues playing nice. We'll see what unfolds.