Friday, July 25, 2014
I went ahead and snagged some additional GPC shares the other day. Yeah, yeah I know. Shares aren't exactly cheap right now (not that GPC ever is), but this one of a handful of companies I don't mind paying a premium for. I am in fact willing to pay extra for added certainty. Certainty of dividend growth. (Almost) certainty of EPS growth. I don't really like surprises which is where GPC really shines. Far from a sexy business, yet very steady. Anyways Genuine Parts is a company run very well. I regularly listen to conference calls and feel quite comfortable with these guys controlling the fate of part of my portfolio.
58 consecutive years of dividend growth says a lot!
$374.03 of this purchase was reinvested dividends... yet I will add it to my cost basis unlike DRIP investors who think reinvested dividends are free... sigh...
Now that I control 31 GPC shares, it has a dividend weight of 1.15% and will pay me a total of $71.32 per year. I have plenty of room to keep adding shares of Genuine Parts, though I might just purchase some new DE or GE shares Monday next week. We'll see...
Sorry that I don't really respond to comments anymore. To be 100% honest, I'm not really that interested in blogging/blogs right now. I want to keep posting what I buy for future reference though.
Have a great weekend you guys!
Tuesday, July 22, 2014
1 share GE, 3.38% yield, $.88 annual income (FRIP purchase)
Deere & Company again. I now control 38 shares and will consider adding more until somewhere around 50 to 55 shares. That number could go up it's not set in stone or anything. DE has a dividend weight of 1.48% at the moment. Building it up slowly but surely.
I'm planning to do a purchase in my ROTH IRA and have been eyeing GE or GPC as potential candidates. It would be awesome if share prices dipped on either of those names.
Norfolk Southern (NSC) announced a 5.6% raise from $.54 to $.57 per share each quarter. This marks the second 2014 dividend increase from NSC for a total of 9.6%. I'm very happy with this railroad giant.
Tuesday, July 15, 2014
1 share GE, 3.35% yield, $.88 (FRIP purchase)
More Deere this week.
Weekly purchases are winding down for me. Two more then I revert back to bigger buys. I'm still not convinced frequent small purchases is really better than large purchases. But I will say it's fun! The biggest advantage is psychological. It's far easier to commit a few hundred bucks at a time than a few thousand. There is some value in that, especially for new investors or those prone to hold too much cash.
ConocoPhillips (COP) raised quarterly dividends from $.69 to $.73 which equals a 5.8% raise. 5.8% is higher than inflation, not bad! In the past COP announced dividend raises at irregular intervals so I'm quite pleased the company seems to have started a pattern of raises each July. Irregular intervals cause me to worry. I much prefer regular schedules I can count on. This increase puts an extra $12.48 in my pocket over the course of a year which is just as good as many of these weekly purchases I've been doing.
Omega Healthcare Investors (OHI) announced quarterly dividends will be raised from $.50 to $.51. This is the third OHI increase this year for a total of 6.3%. 6.3% easily beats inflation, so yeah I'm quite pleased! OHI is a beast of a REIT growing FFO and FAD rapidly. Glad I got in on this one. I can now expect to rake in an extra $4.28 per year based on the new payment.
LO and RAI to Merge
Today we were informed Reynolds American plans to gobble up Lorillard for $50.50 cash and .2909 shares RAI stock. Regulators still have to pass the merger, but I really don't care either way.
I'd have no problem taking the RAI stock and using the cash to buy more. Reynolds is a fine tobacco company in its own right. Quite a few investors seem to be spooked by a potential menthol ban. I personally don't think it will happen (blatantly unAmerican to which I take offense, plus you need an iron stomach to hold tobacco stocks anyways), but if it was to occur RAI is better positioned than LO. RAI doesn't rely as heavily on menthol cigarettes. It also sells dip and snus with awesome brands such as Camel, Kodiak, and Grizzly. I wouldn't mind owning a piece of those businesses. Not at all!
RAI = suitable replacement for LO. Better diversity, higher current dividend yield, less reliance on menthol. At the cost of lower dividend growth. Overall I don't mind.
Or regulators kill the deal and I can continue owning LO with its higher dividend growth. Not a problem.
If the deal does go through, Blu e cigs will sold. Reynold's already owns Vuse (I didn't know that till today) which seems to be more popular than Blu anyways. Not sure if Vuse is marketed nationally yet, but I see it all the time in Colorado. More so than Blu, though my experience is anecdotal. Also Maverick, Kool, and Winston get the axe. Basically they keep only the best brands in Newport, Camel, Pall Mall, Kodiak, Grizzly, and Vuse. Makes sense.
RAI or LO. Rising dividends will continue hitting my account either way. We'll see what happens.
Monday, July 7, 2014
I'm building a position in Deere & Company right now. I think the company has a very bright future as the world population grows and modern farming techniques are adopted in other parts of the world. It seems to me I could profit on a trend like that and also collect rising dividends in the process.
I'm looking to buy great companies with rich histories of taking care of shareholders. Even then I cannot pay any price when acquiring parts of these businesses. The cheaper I acquire shares the more shares I can buy with the same amount of capital and therefore collect more dividends. I have a predetermined list of 50 companies I plan to own. The only thing left is acquire the shares at favorable prices to the best of my ability. I think DE shares should be worth $117 so yeah I believe I'm getting a nice discount with today's purchase. I could be wrong about its fair value. However I do prefer to at least have some idea about what shares might worth as opposed buying stocks based on stocks charts or even completely in the dark. I find my system to be quite useful yet it isn't perfect.
With 24 shares, DE now has a dividend weight of 0.94%. I could easily build up to a 50-55 share position as part of a balanced portfolio built for sleep well at night income generation. Besides DE I'm looking to start new positions and to beef up holdings with dividend weights less than 1%. At this point I'm keeping an eye on GPC (.56%), BP (.38%), GE (.78%), and XOM (.77%). UL (.56%), KRFT (.93%), and ITW (.80%) are pretty much uninvestable for new money as much as I'd like to add.
Today's purchase was commission free as I still have free trades available. I plan to purchase income paying securities, most likely dividend stocks, on a weekly schedule for the rest of July. Then I'll resume larger purchases. I have extra free trades for August and beyond, but not enough to burn through them via weekly buys.
Midyear Financial Goals Update
1. Increase forward annual dividend income to $6,880 ($573 per month)
Starting the year at $5,680 I need $1,200 of progress. Not including today's purchase my annual dividend income went up by $623 so far this year. 52% of $1,200 is slightly ahead of schedule half way through .
Looking ahead: Monthly capital infusions have been better than expected allowing me to purchase more stock than previously thought. Higher market prices have been working against me since I can't buy as many shares with the same amount of money. Not only that, but I'm working on weightings which means I can't really buy high yielding stocks such as REITs or tobacco companies at the moment. The typical stock I'm buying right now pays less than 3% making this goal somewhat problematic. I also expect fewer dividend increases for the back half of the year. Accomplishing this goal will be challenging, but I think it is possible if I want it bad enough.
Status: on track, but I need to increase my savings rate.
2. $20 monthly Lending Club interest
Last month I received $14.82 worth of Lending Club interest. During December 2013 I received $8.75. I'm very pleased with the progress. I plan to change nothing.
Status: on track and looking good.
3. Average monthly brokerage deposits of $1,300
I averaged $1,717 so far this year. I'm really doing well here. A few things have changed since I crafted this goal late last year. First off my employment income went up by a nice amount on the back of some decent raises. Second of all I have taken steps to reduce fixed monthly expenses. I switched car insurance, I ditched cable and bought a digital antenna, and started using cash back credit cards for everyday purchases. Small things like that do add up! Also my rent went up by less than $1 per month and I fully funded my savings account for a future vehicle. Yep. When it comes time to purchase a new vehicle (used obviously) I will be paying cash. The money has already been saved, and it feels awesome!
Looking ahead: I think I could easily save upwards of $2,000 per month later this year. Right now I'm working through some large expenditures and will likely only deposit $1,700 per month for the time being. I need new tires for my vehicle, I just bought a new smart phone, I still need to buy my season ski pass, I'm buying snowboard boots, and will continue getting preventative maintenance done on my truck here and there. Once I get through that, savings will pick up.
Status: on track and looking good.