Tuesday, August 15, 2017

Recent Buy, August 2015

Rained Out Gremlin here.  It has been a strong summer.  My wife and I moved, I was a best man in a wedding, we had a mini family reunion, and on and on.  The new house is mostly set up, but it feels like there is always something to do.  As a new homeowner, yes we bought a house, it feels like there is no time to slow down.

Perhaps that is why, now more than ever, I view each dollar I make passively as getting some of my time back.  I figure for every $25 made passively, it is as if I have worked one extra hour.  Thus, at some point those extra bucks will become the main bucks, and I will be able to sleep in with no one stopping me.  Therefore in the back of my mind, I make a tally of how many extra hours that my money has worked for me.  So to keep the train rolling, I made another dividend growth investment.

Today, I added to a position by purchasing shares of Archer Daniel's Midland (ADM) in my taxable account.  I bought 30 shares, with a total cost of $1263.95 ($41.90 / share, plus commission).  The current yield is 3.10%.  The P/E ratio for ADM sits today at approximately 17.74, trailing.  This is better than the historical 5 year average for the stock with the average yield being 2.38% and the average P/E being just under 17.84.  ADM boasts a trailing payout ratio of approximately 53%.  ADM has 42 years of dividend growth and is a member of the Dividend Champions.  This purchase will add $38.40 to my 12-month forward income.

I already have ADM in my IRA, where I hold 70 shares that I purchased for a similar valuation back in September of 2016.  It was a monstrous amount of buys that I made with my transferred 401k funds from old job.  With this purchase I finally have 100 shares of a DGI stock in my portfolio.  If I want, options are literally now on the table.

So ADM, what do you do?  Well here is a description in their words:

"Archer Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the firm owns an extensive network of logistical assets to store and transport crops around the globe. The company's end products include vegetable oil and meal, corn sweeteners, flour, feed ingredients, and ethanol."

I like that description.  It is simple and understandable.  The need for food products, oils, sweeteners, and similar foodstuffs will not likely go down.  It is possible the products could become cheaper, but the demand should always be present - pending any worldwide catastrophic events.  As someone who likes to cook a lot, I recognize that these items are so essential.  Even more necessary, but often misunderstood, is the food transport, distribution, and warehouse network.  I work near train tracks where daily ADM rail cars come by as part of larger trains.  This infrastructure takes a long time to build and is cost prohibitive.  This framework has an intrinsic value that is difficult to quantify, but is impossible to deny.

I will update my portfolio page at the end of the month.  Stronger 2017!

What do you think of ADM? 

- Gremlin
- Long ADM

Wednesday, August 2, 2017

July Review / August Preview, 2017

Let Me Dress for the Weather Gremlin here to talk about July and August.  It has not been the hottest July on record, which is very nice.  I took two trips out of the area.  One for a mini family reunion over a weekend, and another to Las Vegas to work.  I am ever the cautious investor, I did not even step foot into a casino.  Sure gambling can be fun, but its not fun to do it by yourself (as I said business trip), nor is it fun to lose money in such vast quantities as the average person does in Vegas.  Also no interest in their shows, especially since the town I live in is already part circus.

On serious note, my wife and I closed on a house.  We will be moving in shortly, and as everyone knows - moving sucks (ask all of my friends who owe me for helping them move, its their turn).  I digress, the fact is our 'rent' is now going to be headed towards equity, which is a nice change.  My wife's commute should stay the same.  I will be on a new train line, though farther out - it is more direct. Overall buying a house is smart in the long term, however it is stressful.  For some reason it is less stress inducing than buying a car, until you see that final number on your mortgage...

July:

This I added one new position to my Roth account, J.M. Smucker's (SJM).

Last month I brought in a total of $73.19 in dividends ($72.19 taxable, $0.00 Roth, and $0.00 IRA).  This is an decrease from last year ($84.98 total) by 14%. The decrease is mainly related to KHC switching their payout month.

In terms of dividend increases, I realized one from this month from Realty Income (O).  The raise was around 0.2%.  Thus far for 2017, I have realized 30 dividend increases!

Next month I will realize two raises from Discover Financial (DFS) and Omega Healthcare Investors (OHI).  The increases are 16.8% and 1.5%, respectively.

August:

Within the last week my wife and I bought a house.  I have stated it earlier that this would happen, and sometimes things move faster than plans, so here we are.  Our debts for the first time, since practically ever, outstrip our assets.  However, I am not selling stocks to pay for it all.  Rather it is time to double down - blast debt and buy assets. 

I have cash on hand to add a new position, but I might not depending on how moving goes.

Next month should produce around $250 in dividends, which is a 160% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great July, get some sun and some fireworks!
- Dividend Gremlin
- Long all stock tickers mentioned

Thursday, July 13, 2017

Recent Buy, July 2017

Farmer's Tan Gremlin here.  I don't know about you, but I sunburn like crazy - so save yourself the experience of awesomely itchy skin and use sunblock lotion.  Anyways, summer is very busy.  We are buying a house, getting sunburned by the pool, going tubing, going to a wedding, etc.  One of the things I have been trying to do a lot is to ride my bike where I can.  Its cheaper and more enjoyable than driving.  However, I sweat like a maniac - so if I am riding I either need a shower when I get to where I am going, or to keep about 10 feet away from everyone else who has a good sense of smell at all times.  Enough, with how much I sweat and what I am doing this summer, what did I just buy?

Yesterday, I added a new position by purchasing shares of J.M. Smucker Co. (SJM) in my Roth IRA account.  I bought 11 shares, with a total cost of $1281.85 ($115.90 / share, including commission).  The current yield is 2.62%.    The P/E ratio for SJM sits today at approximately 22.44, trailing and 14x forward earnings.  These are both better than the historical 5 year average for the stock with the average yield being 2.19% and the average P/E being just under 24 (with a high of 41!).  SJM boasts a trailing payout ratio of 57% and a forward payout ratio of approximately 35% (looking at the data from multiple sites...).  SJM has 19 years of dividend growth and is a member of the Dividend Contenders.  This purchase will add $33.00 to my 12-month forward income.

SJM is a consumer staple stock, and that sector is finally entering good buying territory (thanks to one Amazon, which one day will find itself on the wrong side of anti-trust litigation I would think).  It is nice to get a security that is approaching 5 year highs in terms of yield.  On a macro level, it has been nine years since a recession so the likelihood of having one is increasing.  When it does hit, people will continue to buy the staples.  Perhaps even buy the cheaper items.  No fancy food, but stuff they can afford to put on the table all week.  This is where companies like SJM come in; they have been buying healthier brands and securing space in that market and they still have the old guard value brands.  Not to mention to mention that many store brands are made by large companies like SJM.

This is a company and a sector I am very confident will still be around decades from now.  The fact is, people need to eat and there are now more people than ever.

I will update my portfolio page at the end of the month.  Stronger 2017!

What do you think of SJM? 

- Gremlin
- Long SJM

Monday, July 3, 2017

June Review / July Preview, 2017

Sweaty Gremlin here to talk about last month and look forward to the next.  June was a busy month, I turned 32, my wife and I found and made an offer on a house, which was accepted, I was in a wedding, and on and on.  Now we face the prospect of our rent payments becoming mortgage payments, so we can build some equity.   Now I can literally talk about the situation on the 'home front' and mean it.

On the work front I got to travel a little bit, and it is likely I will be required to do so again soon.  The projects I support like to do visits and tests in the summer months.  Traveling for work is not always ideal, but looking on the bright side, I rack up points, and all my required expenses are covered for those days - so I save some of my money.  

June:

This past month I did not make any new investments.  I have the cash on hand, but I did not see any stocks I wanted to purchase, also there is my whole housing situation.

Last month I brought in a total of $294.87 in dividends ($101.16 taxable, $61.80 Roth, and $131.91 IRA).  This is an increase from last year ($116.44 total) by 153%. The IRA money does it again, destroying a prior month.

In terms of dividend increases, I realized four this month from Pepsico (PEP), Unilever (UL), Johnson and Johnson (JNJ), and Exxon Mobile (XOM).  Raises were between 2% to more than 8%.  Thus far for 2017, I have realized 29 dividend increases!

Next month I will realize one raise, Realty Income (O).  The increase is approximately 0.2% - the 4th from O this year.

July:

At the moment we only have low interest auto loans, in terms of realized debt.  This past month I covered my net-worth, which be very much in flux in the coming months.  This month we anticipate closing on a house, which will set us back a little bit [about a metric ton], but allow for a longer term building of wealth.  Owning our house has been a long time coming, and it is the smarter long term financial move.  However, it did impact stock purchases as I have held back potential Roth IRA and taxable purchases in case the cash is needed in the short term.  I will likely make the Roth move in July, but sit on the other cash until at least August.

Next month should produce around $71 in dividends, which is a 8% YOY decrease, which is  attributable to Kraft-Heinz (KHC) switching its payout month.

My portfolio page is currently up to date.

Hope everyone has a great July, get some sun and some fireworks!
- Dividend Gremlin
- Long all stock tickers mentioned

Wednesday, June 28, 2017

Gremlin's Asset Review

Bookkeeping Gremlin here to discuss a topic that deserves a good solid review: my net-worth.  Technically, it is our net-worth between my wife and I, but she does not care to do the math so its just me doing this number crunching exercise.  So in this review I will cover a lot of things: my current and future debts, investments, employment / income, goals, and some miscellaneous items.  What will not be covered is my liquidity, height, weight, etc.  This is a look to see where we are and how we are, starting naturally with the ugliest of things.

Debts:

Debt sucks, period.  Most people accept debt as normal, and I have personally found arguing with them to be taxing.  Most people just accept it, but I fight it.  Still, I have debt.  I have worked to alleviate some of it, but I will likely come into more debt due to my housing situation.  So here goes:

Car #1 (my car): $10028.96 (maturity: 6/2021, $240 / mo.) interest = 1.9%
Car #2 (her car): $18,044.33 (maturity: 10/2020, $475 / mo.) interest = 1.5%
Student Debt: None. Eliminated as of 10/2016.
Mortgage*: None at present.
Revolving debt / credit cards: None at present, credit cards are paid off monthly.
Total monthly payments = $715 + revolving

At the end 2015 is when I first started actively tracking my debt.  At that time it was approximately $46000.  Today it stands at a total of $28073.29.  In less than two years we have managed to eliminate just under $18000 worth of debt, including student loans totaling $7000+ (to be fair, my wife had done a lot of work on this already before I decided to squash it).  Currently, we pay my wife's car in exact amounts, and I pay a little extra on mine.   The dates listed are estimated by the loan company, my goal is to finish them in advance.

* = We are in the process of buying a house.  It was determined this is necessary, mainly because of future space constraints we will have related to a mini-Gremlin.  This will be discussed in the future.  At present we expect to close on a house next month, and will begin the journey of home-ownership.  For now, that number is $0, but not for long sadly.

Income:

My wife and I both work, however with the advent of mini-Gremlin in the future, there will be a slight time gap concerning her paychecks.  I have steady employment, at a solid firm, doing niche work that is needed and not easily back-filled.  To date I have received a small pay increase, and likely will receive another one later this year.  In addition, I work a second job at a brewery, and have plans to take on a third line of work using the internet (not here).  At present the extra cash goes towards investments, but it may end up shifting towards debts in the future.

Assets:

This is the fun part.  Current assets that are to be considered are my taxable investments, Roth IRA, IRA, 401K, and other retirement savings.  Cash, Health Savings Accounts, and miscellaneous assets are not counted unless they fit into another category.  I work to shield liquidity this way, and separate out what is needed versus what can be invested.  Assets including cash in accounts:

Taxable Invested Assets: $31021
Roth IRA: $17993
Traditional IRA: $34211
401K: $6707
Wife's Retirement / Pension: $10915
Total = $100847

At the beginning of 2015 the total stood at $47000.  At the end of 2015 it was $54000, and at the end of 2016 it was $87000.  Since the start of 2016 both my rate of investment and the market have been on tears.  Purchasing a house will stifle this, but only briefly.  This past month is the first time our total assets broke $100000, so time to double down.  It is my goal to make this number hit $150000 by end 2018.

Total Net Worth = $72773.71


Goals:

My short term financial goals are - eliminate one car loan in the next two years (early) and increase my taxable investment account by $10000 per year (in addition to Roth and 401k additions).  My income goals are to increase my take home pay by acquiring more useful certifications and adding extra income / employment where needed.

My long term goal as always is financial independence.  There will always be bumps in the road, but those are the times to double down - not to change course.

Conclusion:

At the moment we are doing well relative to our peers.  However, though our peers represent a good metric, they are not what I want to use to measure my life's progress.  The primary drive will be to substantially increase general income and use the proceeds to bolster investment accounts.

- Gremlin

Wednesday, May 31, 2017

May Review / June Preview, 2017

Summer Gremlin here to discuss the wonderful month that was May.  So far this past month has been relatively uneventful, which is good.  I had one weekend away from my home, and it was only one day at that.  Things are moving at what seems to be a breakneck pace, specifically searching for housing.  It would appear that my hope that we would buy in 2 years, is more like we will buy this summer.  These things happen, and other people have ways of changing your plans faster than you can yourself (if you are married, you understand this).  That is not always a bad thing, indeed this is smarter in the long run in generating value and wealth.

As of this moment I am still waiting on ol' Loyal3 to transfer funds, as requested.  Apparently their transfer department was swamped by transfer requests.  Guess they found out you cannot dupe thousands of people into paying you money easily.  The new brokerage that has my account has told me to wait about 10 business days, and that was 7 business days ago, so time will tell if they can get it done in any normal amount of time, doubtful.  I hope it goes smoothly, much easier to be nice on the phone instead of a big jerk.

May:

This past month I put $1035.26 dollars to work in my IRA account, and started a new position in T. Rowe Price (TROW).

Last month I brought in a total of $246.08 in dividends ($36.86 taxable, $66.14 Roth, and $143.08 IRA).  This is an increase from last year ($85.54 total) by 187%. The IRA money does it again, destroying a prior month.

In terms of dividend increases, I realized four this month from Apple (AAPL), Ameriprise Financial (AMP), General Dynamics (GD), and Omega Healthcare Investors (OHI).  Raises were between  1.5% to more than 9%.  Thus far for 2017, I have realized 25 dividend increases!

Next month I will realize four raises, from Pepsico (PEP), Unilever (UL), Johnson and Johnson (JNJ), and Exxon Mobile (XOM).  The increases range from around 2% to more than 8%.

June:

This is my birthday month.  I will post a serious look at my net-worth and general progress in life in terms of FI (and still having a roof over my head / food in the fridge).

Our only remaining debt is extremely low interest auto loans, however that may change.  Stashing of cash for the impending house continues.  In addition, I expect a significant amount of cash to come my way when my Loyal3 account transfers.  This should speed another purchase in my brokerage account.  At the moment the market is all over the place, the cash might sit for a month waiting for instructions.

Next month should produce around $293 in dividends, which is a 152% YOY increase, which is mainly attributable to my IRA and a few newer positions plus some growth in my other accounts.

My portfolio page is currently up to date.

Hope everyone has a great June, suns out - guns out!
- Dividend Gremlin
- Long all stock tickers mentioned

Wednesday, May 24, 2017

Recent Buy, May 2017

Clean Teeth Gremlin here to talk about some more recent buys. Today I accomplished two things.  One, I went to the dentist then starved myself for a few extra hours because my teeth felt so damn clean - minty fresh.  And two, I bought some stock.  I have been making fewer purchases since the demise of Loyal3 (which I will also discuss today), but going forward my purchases will all be bigger in terms of quantity.  Also because I cannot shotgun approach investing as I could with Loyal3, I a being a little more price conscious.  Still those are not bad things, and what did I buy?

Today, I added a new position by purchasing shares of T-Rowe Price (TROW) in my IRA  account.  I bought 15 shares, with a total cost of $1035.26 ($69.01 / share, including commission).  The current yield is 3.21%.    The P/E ratio for TROW sits today at approximately 13.34, below it historical average.  TROW boasts around a 43% payout ratio and 31 years of dividend growth.  This purchase will add $34.20 to my 12-month forward income.

TROW has been raising their dividend as long as I have been alive.  Last year was their weakest raise in a long time, below 4%, however looking at them over the last 5-10 year frame one can see their assets under management (AUM) have increased, and the dividend TROW pays has typically been increasing between 6 and 10%.  That is the kind of growth I want.  Overall, I am a supporter of asset managers, after all I already own AMP and would like to own a few others.

I agree with dividend bloggers who have stated online before that 'the market and investing are not that hard to understand.'  Still most of those people (and people less driven or intelligent than them)  who even do understand the basics jump for ETFs, Mutual Funds, and other types of index funds.  Why?  Because it is easy.  Investing as a dividend growth investor takes time and patience.  Most people don't have those things.  Picking a few low cost index funds is much easier (for the record if you're not interested in stocks, I fully support people going that route). In a sense this investment along with AMP show that I do think people will invest, but I don't think they will doing the investing.  Perhaps that is a somewhat cynical thought, but in doing my regular work, my side job at a bar, and overall daily life it is easy to think most people fall into that category.

As for Loyal3, I am still waiting on them to transfer my assets to my main account.  Apparently the tiny transfer division at Loyal3 was completely swamped with transfer requests when they announced their recent shutdown.  Who did not see that coming?  Answer - clearly just Loyal3.  I would imagine a lot of the low costs users immediately looked for the next best option, and it was not the one being offered to them at the outset.  So all those fleeing the ship did the same thing, jumped to a better ship or an island in my case.

I will update my portfolio page at the end of the month.  Here, again, is to a stronger 2017.

What do you think of TROW? 

- Gremlin
- Long TROW and AMP

PS - I hope Nashville gets the Stanley Cup!