I'm excited to announce my investments will now provide an average monthly income that exceeds $300. May has been a busy month with new purchases, dividend increases, spinoffs, and stock splits. All together I currently expect to receive $3,680.57 of dividend income the coming year. Average monthly income: $306.71
To me this is a significant milestone because dividend income is real cash that can be used to pay bills, travel, eat out, or just squander on hookers and blow (haha). In all seriousness I will continue to use this income to buy more shares of dividend stock till I'm ready to retire. The best part is that these dividends are sustainable and will rise over time; hopefully faster than inflation.
Looking forward I will strive to improve my portfolio and take advantage of attractive entry prices to the best of my ability. I'm obviously not a financial expert (I'm a professional soldier), but I have learned a lot about investing the past few years. The real test will be the next market crash. Staying the course during tough times is not easy. I will need to either have an iron stomach or just not pay attention to account balances. Back in '08/'09 I remember cringing as I watched my mutual funds sink in an endless sea of red. As long as income stays steady I'm confident I'll make good decisions.
Saturday, May 12, 2012
Thursday, May 10, 2012
Intel Increases Dividend
A few days ago Intel (INTC) increased its dividend 7.14% from $.21 to $.225 per quarter. This is the 9th straight year of increases. I was anticipating a larger boost in 2012, but 7.14 % is still welcome. There is a chance INTC will do another dividend increase before the year is up, but I'm not going to count on it or make any predictions.
My initial INTC purchase came with a 3.75% yield the day I bought it. After 2 increases it has already ballooned to a 4.67% yield on cost. This is what dividend growth investing and compounding is all about. The payout ratio is still healthy at 38.1%, there is plenty of room to take the company to dividend contender status and beyond. I'm not one to get excited about tech stocks, but if Intel can get a foothold in the mobile market the stock price is going to soar.
My initial INTC purchase came with a 3.75% yield the day I bought it. After 2 increases it has already ballooned to a 4.67% yield on cost. This is what dividend growth investing and compounding is all about. The payout ratio is still healthy at 38.1%, there is plenty of room to take the company to dividend contender status and beyond. I'm not one to get excited about tech stocks, but if Intel can get a foothold in the mobile market the stock price is going to soar.
Wednesday, May 9, 2012
New Purchase - MCD
My latest purchase is 13 shares of McDonald's (MCD). The shares were bought at $91.935 which results in a yield of 3.03% after brokerage fees. In my opinion MCD is one of the top dividend growth stocks, I'm happy to increase my position. I plan to hold McDonald's for a very long time and will continue building the position along the way.
The purchase today was not planned, but I'm trying to invest some of the cash sitting in my account doing nothing. I probably won't make any more purchases in May, but no guarantees. It's nice to know I can take advantage of opportunities if I see something I like.
In other news I received extra shares from the SBSI split today and noticed they gave me 4 shares when I was expecting 3. Seeing as the split was 5% and I used to own 60.497 shares, it appears they rounded up. I did the math; 5% comes out to 3.025. Maybe the distribution will be amended, but right now my account says 64.497. Thank you Southside Bancshares, this was a generous gift!
The purchase today was not planned, but I'm trying to invest some of the cash sitting in my account doing nothing. I probably won't make any more purchases in May, but no guarantees. It's nice to know I can take advantage of opportunities if I see something I like.
In other news I received extra shares from the SBSI split today and noticed they gave me 4 shares when I was expecting 3. Seeing as the split was 5% and I used to own 60.497 shares, it appears they rounded up. I did the math; 5% comes out to 3.025. Maybe the distribution will be amended, but right now my account says 64.497. Thank you Southside Bancshares, this was a generous gift!
Tuesday, May 8, 2012
New Purchase - TD
I swooped in and picked up 16 shares of Toronto Dominion (TD) this afternoon. The shares were bought at $80.315 + commission in my ROTH IRA to avoid withholding taxes. This amounts to a yield of 3.56% and about $46.08 annual income depending on exchange rates.
I've spent time thinking about my portfolio and what I can do to keep it balanced. It's painfully obvious I am lacking financials and foreign stocks. TD makes sense because it fills both needs. I want foreign stocks to diversify away from the the US dollar more than attempting to capture foreign business. I figure international powerhouses such as MCD, JNJ, and KO cover the globe rather well.
Frankly, financials is a sector I do not like. I do not trust large U.S. banks, some of which needed to be bailed out in recent years. How ridiculous is that? It wasn't just a bank here and there, it was widespread. Something is wrong with the whole system. Luckily our friends to the north do banking right. I don't feel like describing it all right now, but Canadian banks didn't need bailouts. The major Canadian banks did not cut or eliminate dividends during the crisis. Yes the dividends were frozen temporarily, but that is a BIG difference from cutting.
If anyone out there uses TD Ameritrade for a broker, please start day trading to pad my dividend income...
Just playing!
I've spent time thinking about my portfolio and what I can do to keep it balanced. It's painfully obvious I am lacking financials and foreign stocks. TD makes sense because it fills both needs. I want foreign stocks to diversify away from the the US dollar more than attempting to capture foreign business. I figure international powerhouses such as MCD, JNJ, and KO cover the globe rather well.
Frankly, financials is a sector I do not like. I do not trust large U.S. banks, some of which needed to be bailed out in recent years. How ridiculous is that? It wasn't just a bank here and there, it was widespread. Something is wrong with the whole system. Luckily our friends to the north do banking right. I don't feel like describing it all right now, but Canadian banks didn't need bailouts. The major Canadian banks did not cut or eliminate dividends during the crisis. Yes the dividends were frozen temporarily, but that is a BIG difference from cutting.
If anyone out there uses TD Ameritrade for a broker, please start day trading to pad my dividend income...
Just playing!
Sunday, May 6, 2012
May Shopping List
The stock market cooled off last week presenting a number of companies that look attractive. As a whole I do not think stocks are at bargain levels right now, but I am paying close attention to a select group. If we see additional market declines I will most likely pick up one of these names later this month.
-Emerson Electric (EMR): Emerson had a substantial earnings miss last week, but it still grew EPS from the previous year. Every company will miss earnings from time to time, the fact that it is growing EPS is a good sign for dividend growth. My target buy price: <$48
P/E: 15.62 / Yield: 3.28 / Payout Ratio: 47.6% / Est. LT EPS Growth: 11.3% / Yrs of Div Growth: 55 (champion) / Industrials sector
-Air Products and Chemicals (APD): APD had a slight earnings miss a few weeks ago which seems to have triggered a price decline. I would note that Air Products is expected to earn less in 2012 than it did in 2011. My target buy price: <$83
P/E: 16.05 / Yield: 2.99 / Payout Ratio: 43.83% / Est. LT EPS Growth: 7.7% / Yrs of Div Growth: 30 (champion) / Materials sector
-Owens and Minor (OMI): OMI also had a slight earnings miss a few weeks ago. Even with the earnings whiff, Owens and Minor is still growing earnings per share, which is always good. In my opinion, OMI is trading at an attractive price right now. My target buy price: <$29(already there)
P/E: 15.57 / Yield: 3.09 / Payout Ratio: 44.81% / Est. LT EPS Growth: 8.7% / Yrs of Div Growth: 15 (contender) / Healthcare sector
-Toronto Dominion (TD): TD is a Canadian bank that has been on a tear the past year. It has been growing EPS and trouncing estimates along the way. This is an example of why I do not put full faith in analysts. I'm looking to increase exposure to foreign stocks and financials. TD fits the bill as I am willing to overlook the dividend freeze in 2010. My target buy price:$80
P/E: 12.98 / Yield: 3.56 / Payout Ratio: 42.5% / Est. LT EPS Growth: 9.9% / Yrs of Div Growth: 2 (froze in 2010) / Financial sector
-Emerson Electric (EMR): Emerson had a substantial earnings miss last week, but it still grew EPS from the previous year. Every company will miss earnings from time to time, the fact that it is growing EPS is a good sign for dividend growth. My target buy price: <$48
P/E: 15.62 / Yield: 3.28 / Payout Ratio: 47.6% / Est. LT EPS Growth: 11.3% / Yrs of Div Growth: 55 (champion) / Industrials sector
-Air Products and Chemicals (APD): APD had a slight earnings miss a few weeks ago which seems to have triggered a price decline. I would note that Air Products is expected to earn less in 2012 than it did in 2011. My target buy price: <$83
P/E: 16.05 / Yield: 2.99 / Payout Ratio: 43.83% / Est. LT EPS Growth: 7.7% / Yrs of Div Growth: 30 (champion) / Materials sector
-Owens and Minor (OMI): OMI also had a slight earnings miss a few weeks ago. Even with the earnings whiff, Owens and Minor is still growing earnings per share, which is always good. In my opinion, OMI is trading at an attractive price right now. My target buy price: <$29(already there)
P/E: 15.57 / Yield: 3.09 / Payout Ratio: 44.81% / Est. LT EPS Growth: 8.7% / Yrs of Div Growth: 15 (contender) / Healthcare sector
-Toronto Dominion (TD): TD is a Canadian bank that has been on a tear the past year. It has been growing EPS and trouncing estimates along the way. This is an example of why I do not put full faith in analysts. I'm looking to increase exposure to foreign stocks and financials. TD fits the bill as I am willing to overlook the dividend freeze in 2010. My target buy price:$80
P/E: 12.98 / Yield: 3.56 / Payout Ratio: 42.5% / Est. LT EPS Growth: 9.9% / Yrs of Div Growth: 2 (froze in 2010) / Financial sector
Friday, May 4, 2012
New Purchase - COP
I couldn't resist ConocoPhillip's (COP) new yield, today I bought 24 additional shares. The shares were picked up at $53.07 which is a yield of 4.94% after transaction costs and will pay me $63.36 per year. This is a slightly better price than my initial (prorated for the spinoff) purchase. I always like to average down when I can. Oil stocks were hammered this week due to lower gasoline prices and sluggish job growth. I would welcome further market declines since I plan to make at least one more purchase in May.
Since the spinoff I have noticed investors sold PSX and seem to have a more favorable opinion of the new COP. PSX took a harsh beating in market price this week, I will hold it regardless. As I stated in a post about the spinoff, I plan to keep both companies. Right now I'll only consider adding shares of COP until I know more about Phillips 66.
Have a great weekend!
Since the spinoff I have noticed investors sold PSX and seem to have a more favorable opinion of the new COP. PSX took a harsh beating in market price this week, I will hold it regardless. As I stated in a post about the spinoff, I plan to keep both companies. Right now I'll only consider adding shares of COP until I know more about Phillips 66.
Have a great weekend!
Wednesday, May 2, 2012
Pepsi Increases Dividend
Pepsi announced it has raised its dividend for the 40th straight year. The quarterly dividend has been increased to $.5375 from $.515, which is 4.37% boost. I'm disappointed that it's so low this year, but at least it's higher than inflation. For a stock yielding around 3% I expect more, but I also realize high dividend growth will not be possible every single year. I still think Pepsi is a world class company that will deliver solid dividends in the future. The portfolio of brands they own is amazing, I consume a lot more Pepsi products than Coke products.
I know this dividend increase was announced a few months ago in an investor update, but I wanted to wait until the official release in case something changed.
I know this dividend increase was announced a few months ago in an investor update, but I wanted to wait until the official release in case something changed.
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