Wednesday, April 30, 2014

April Recap

April was a great month all around.  Dividend increases were strong, incoming dividends were awesome, and I was able to deposit new funds at an elevated rate.  I'm expecting some additional dividend increases next month, but they ought to slow down the rest of the year.

DOW: 16,581 /// S&P 500: 1,884 /// 10-YR BOND: 2.65%

New Purchases:
1) 5 shares ABT at $38.51: $4.40 annual income
2) 8 shares GE at $25.87: $7.04
3) 8 shares ABT at $37.73: $7.04
4) 5 shares TGT at $59.75: $8.60
5) 6 shares ABT at $38.24: $5.28
6) 4 shares BP at $49.02: $9.12 (the dividend has since increased)
7) 15 shares GPC at $85.84: $34.52
8) FRIP: 2 shares GE: $1.76
9) DRIP: .605 shares BNS: ~$1.40


Dividends Received: $476.40
Baxter International (BAX) $21.56
Coca-Cola (KO) $46.36
Telus (TU) $23.82
Walmart (WMT) $15.36
iShares Emer Mkt Bnd (EMB) $2.55
Illinois Tool Works (ITW) $12.18
Altria (MO) $43.68
Philip Morris (PM) $102.46
Corporate Office Properties Series L (OFC-PL) $22.58
Leggett & Platt (LEG) $18.30
Realty Income (O) $15.69
Realty Income Series F (O-PF) $6.76
W.P. Carey (WPC) $20.59
Kraft (KRFT) $14.18
Bank of Nova Scotia (BNS) $36.31
LTC Properties (LTC) $28.58
Toronto-Dominion Bank (TD) $45.44

Dividend Increases:
1) BP: $.57 to $.585 per quarter: $.60 annual income
2) CVX: $1.00 to $1.07 per quarter: $15.96
3) JNJ: $.66 to $.70 per quarter: $9.60
4) KMI: $.41 to $.42 per quarter: $6.48
5) OHI: $.49 to $.50 per quarter: $4.24
6) PG: $.6015 to $.6436 per quarter: $13.12
7) SO: $.5075 to $.525 per quarter: $4.48
8) UL: €.269 to €.285 per quarter: ~$1.90
9) XOM: $.63 to $.69 per quarter: $4.08

New Deposits:
$1,000 to ROTH IRA, $1,450 to taxable account, $100 to Lending Club

Lending Club Interest:

New Purchase - GPC

15 shares GPC, 2.66% yield, $34.52 annual income

At the risk of looking foolish on a public blog, I added a new dividend champion to my holdings today.  First off I know GPC stock is not cheap.  I'm well aware of that fact.  The thing is that I have to invest the money I save into something in order to achieve my goals and the reality is stocks aren't cheap anymore.  I'm willing to pay up for only the highest quality companies which includes perennial dividend raisers such as KO, JNJ, PEP, EMR, and yes GPC.  Keep in mind that capital gains & total return do not matter to me.  I simply want a passive income stream rising faster than inflation and today's purchase will accomplish that.

The 42nd equity position for my self directed retirement fund is Genuine Parts Company.  I've been meaning to add this one for years, but never did manage to get a buy in for one reason or another.  Anyways I gained a new dividend champion with a 58 year streak (the longest streak that I own tied with PG) and also added some diversification to my holdings.  GPC comes with a 17.6 forward p/e, plus it offers a decent yield at the price I paid.  Not great, but not terrible either considering what I have to work with.  I'd be more than happy to add new GPC shares on weakness.  In fact that's my plan.  Still hoping for a correction...

Symbol: GPC
Core Position: No
Speculative Position:
Steady income; 7% (average) annual dividend growth
Automatic Sell: Dividend cut
Consider Selling: 
Frozen dividend, business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations

Monday, April 28, 2014

Weekly Purchase - ABT & BP

6 shares ABT, 2.30% yield, $5.28 annual income
4 shares BP, 4.65% yield, $9.12

Even though its stock price crept up the past month, I still think BP plc looks attractive with a 10.0 forward p/e.  I wish more dividend growth stocks traded at valuations that cheap!  The second purchase was Abbott Laboratories with a most reasonable 15.6 forward p/e.  This month my plan was to increase underweight positions, that's why I've been adding to ABT, BP, and GE fairly regularly.  Moving forward, balancing my portfolio will take preference.  That will include starting new positions, and also adding to holdings that have a dividend weight less than 1.5% (when valuations make sense).  Since I don't want to fund a retirement with the 4% rule I decided it would be appropriate to weight my holdings based on income instead of market value.  Ideally core stocks might have 3-4% weightings; supporting stocks 1.5-2%.

Please note that I have free trades available and did not pay commissions today.  Under normal circumstances I try to buy in lots of at least $1,000 so as to minimize the effect of commissions/fees.

Monday, April 21, 2014

Weekly Purchase - TGT

5 shares TGT, 2.88% yield, $8.60 annual income
1 share GE, 3.38% yield, $.88 (FRIP purchase from last week)

I'm having difficulty finding places to park new money.  I wanted to pick up additional shares of General Electric and BP, yet prices haven't been cooperating the past couple weeks.  So I went with Target today because I feel it still offers value.  This is my fifth TGT purchase in the past six months or so.  I don't want to rehash reasons why I like the company over and over again.  It's pointless.  However I would note TGT comes standard with a 12.4 forward p/e and trades at a price lower than my fair value calculation.  As a comparison, Morningstar gives it a $65 fair value which is a couple bucks lower than mine.  Anyways the stock offers a nice yield and seems cheap by most measures.

Another nice month for dividend growth investors
Dividend increases just keep on rolling in.  So far in April, 4 companies I own have declared higher dividend rates.  That would be Procter & Gamble (7% raise), Kinder Morgan, Inc. (2.4%), Omega Healthcare Investors (2.0%), and Southern Company (3.4%).  I'm especially pleased to see boosts from KMI and OHI because I wasn't 100% sure those companies would announce raises this quarter.  Before April is in the books I also expect increases from Johnson & Johnson, Exxon Mobil, and Chevron.  April has potential to be another awesome month!

Unilever to start charging fees on plc ADR shares (UL shares)
"With effect from the dividend payable in June 2014 we will be charging an annual fee of $0.02 per PLC ADR share, or $0.005 per share on each of the four quarterly dividends. This fee will offset part of the aggregate costs incurred in the US programme." (taken from Unilever's investor relations website)

Bad news for Unilever plc shareholders in the US.  I haven't seen this reported anywhere else, so I thought I'd bring it to my readers attention.  While I don't like the fee at all, I still plan to continue accumulating UL shares when valuations make sense.

Bank of Nova Scotia ends 2% dividend reinvestment discount
"On March 4, 2014, the Bank announced that there will no longer be a discount from the Average Market Price (as defined in the Plan) applied to purchases of additional common shares with reinvested dividends." (taken from Scotia Bank's investor relations website)

I haven't seen this reported anywhere else either.  BNS was one of two companies I chose to synthetically DRIP, but I no longer have any reason to continue doing so.  Too bad I didn't notice this until now (I've been really busy the past couple months) because it's too late to stop it in time for next week's payment.  I will no longer DRIP BNS starting Q3.

Monday, April 14, 2014

Weekly Purchase - ABT

8 shares ABT, 2.32% yield, $7.04 annual income

This will have to be one of the shortest posts I've ever done, just don't have time to keep up with this blog at the moment.  Anyways I went with Abbott because it's one of my favorite dividend growth stocks and feel it's priced attractively as a long term hold.  Awesome company.

I'm currently away from home in North Carolina working long hours.  I have very little free time, but did get a chance to dip my toes in the Atlantic ocean a week and a half ago.  I was stationed in NC when I started this blog, kind of fun seeing people I know walking around base.

Catch you guys next week!

Monday, April 7, 2014

Weekly Purchase - ABT & GE

5 shares ABT, 2.29% yield, $4.40 annual income
8 shares GE, 3.40% yield, $7.04

1 shares GE, 3.39% yield, $.88 annual income (FRIP purchase from last week)

I added shares to two existing positions today.  Even though the yield is kind of low, I'm a big fan of Abbott Laboratories.  It has a very reasonable 15.5 forward p/e, excellent growth prospects, plenty of room for future dividend raises, and will help shore up allocations in the healthcare sector.  Abbott has been paying & increasing dividend payments for many decades (40+ years excluding the Abbvie spinoff last year).  At this point dividend increases are ingrained in Abbott's culture, and that's the sort of mentality which will serve patient investors well in the years ahead.  It's a company in the same vein as say PG, JNJ, PEP, EMR, and other high quality businesses where yearly dividend growth is almost automatic.  That's how I see it anyways...

General Electric Company was the other buy for reasons I wrote about last week.

Well I still have four planned purchases left for April.  One of those buys will be in my ROTH where I don't have access to free trades.  I must buy larger quantities in that account to make up for the fees/commissions.  Have to hope stock prices continue to slide.

I have many free trades available and did not pay commissions today.  I plan to continue small weekly purchases until my supply of free trades run out (July).

Symbol: ABT
Core Position: No*
Speculative Position:
Steady income; 7% (average) annual dividend growth
Automatic Sell: Dividend cut
Consider Selling: 
Frozen dividend, business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations

*ABT will be designated as a core holding if/when I expand the list.  Core stocks are select holdings that I deem to be the highest quality (it's subjective).  They will be sold last in the event of a forced portfolio liquidation.