Thursday, January 10, 2019

Recent Buy, January 2019

Shutdown Gremlin here to talk about a recent buy.  It is getting cold here in the DC area both inside and out; thanks to the government shutdown and a nice cold front.  The shutdown has been unfortunate as it impacts a significant number of people in the area, including friends and family, most of whom are not even direct Federal employees.  You would think that a shutdown would happen over something more valuable than $5B, but its not.  Which is comical, considering most companies I hold in my accounts are worth more than $5B, and indeed many have that much cash on hand or generate it in a quarter!  I digress, whether you like the movie Fences or if you prefer Wide Open Spaces by the Dixie Chicks - I can assure that neither can be built or enjoyed while stuff is shutdown.

So getting past the shutdown, I had accumulated solid amount of cash in my IRA account and decided to use it to take advantage of some low prices.  Mr. Market has been a fidgety mess since December, so its high time to let the gravity of low prices do some of the hard work for me.  So let's see what I bought.

Yesterday, I added shares of Aqua America (WTR) in my IRA account.  I bought 32 shares, with a total cost of $1,075.88 ($33.40 / share, plus commission).  The current yield is 2.61%. For a detailed summary of their history, etc. please visit: WTR's Seeking Alpha Profile.

The only other utility I currently own is Dominion Energy (D).  WTR is the only water utility in my portfolio.  Potable water itself is not something, at least not in urban areas, that can be substituted easily.  Electrical utilities face pressure from renewable energy, improved efficiencies of electronics, emissions targets, and potential pressure from competitors like natural gas for heat and cooking (my house is electric for the record on both).  Pressures such as those do not really impact the water utilities in a meaningful way.

WTR itself does not boast a massive yield, but has had a couple of decades of 7% dividend increases annually.  Its current yield is one the highest I have seen in the last few years.  WTR has also been expanding its reach, adding numerous local water utilities to its portfolio.  I really like the geographic reach, the industry, and the history of the company.

However, there is some risk associated with the industry especially, capital expenditures (Capex).  The Capex for any utility is high, but for water utilities its even higher.  Water is a heavy and difficult item to move long distances relative to items like electricity or gas (though humans are excellent at engineering and figured them all out).  Also a lot of water infrastructure was built before WWII, especially during the Great Depression.  Old infrastructure leads to higher failure and loss rates.  This will improve over time, but it will be a constant drag on the industry.  Not to mention older infrastructure can effect water quality as seen in Flint, Michigan.  Still its a risk I feel is acceptable - even though I routinely hear of water main failures in the DC area where ~100 year old terracotta or wooden (yes, I am not shitting you on those materials) pipes break.

This purchase will add $28~ to my forward 12 month dividend income.

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

What do you think of WTR?

- Gremlin
- Long WTR, D

Thursday, December 27, 2018

December 2018 Review / January 2019 Preview & End of Year Review

Happy End of Year Gremlin here to discuss the difference a year makes.  At the start of 2018 I was looking at 1 income for 7 months plus all of the other issues that come with a new baby.  For those of you who have kids, I am sure you can think back to being a new parent and just how terrifying it really is.  Anyways, like everything else - you get through it and grow stronger from the challenge.  Though at times when getting stronger you will get the stomach flu, and other times you will fall asleep at 8pm because when the kiddo sleeps - so do you...

In the meantime, locally we are dealing with a government shutdown.  It has not affected me yet, but if it continues it has real potential to affect me.  I am not overly concerned, I have savings and vacation saved for this emergency - but if I could avoid using that it would be swell.  Hopefully 2019 starts better than 2018 ended!

December:

This month I added one new position, TD Bank (TD), in my taxable account.

Last month I brought in a total of $408.49 in dividends ($164.48 taxable, $99.01 Roth, and $145 in my IRA).  This is an increase from last year ($349.36 total) by 16.9%.  This total is my new highest ever, and the first time I have collectively broken $400 in a month.

In terms of dividend increases, I realized five this month from McDonald's (MCD), Microsoft (MSFT), VF Corp (VFC), YUM China (YUMC), and Emerson Electric (EMR).  The increases range from 1.5% to about 16% (all but EMR are higher than 9%).  This brings my total raises to 51* on the year, one more than last year's final total.  A few shares held their dividends in place due to acquisitions and or prudent management.

Next month I will realize two dividend increases from Realty Income (O), Disney (DIS), and Eastman Chemical (EMN).  The increases range from 0.2% to around 10%.

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

January:

The mortgage continues has started to see more cash flowing towards the principal - not a huge number, but every little bit counts. Our debts currently outstrip our assets (I choose not to count the house as an asset).  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  My car is getting paid at doublish time, and I suspect I can finish it off within 8 months from now - which will be nice because I plan on keeping that car for 20 years.  Debt is being eliminated, and we are still building and assets.  A second income goes a long way.

I should be making another buy in January in my IRA account.

Next month should produce around $100 in dividends, which is a 35% YOY increase.

My portfolio page is currently up to date.

2018:

What a year.  So let's look at how I did last year compared to the goals I laid out for myself.

(Results in RED):
  • Invest a total of $8000 next year, $6000 in taxable accounts, at a minimum. Success. $11708.15 total, breakout goals also met.
  • Achieve forward total dividends for all accounts of $3000.  Success. $3150 (ish)
  • Keep getting into shape - lifting 2x and running 2x / week and bike to the train station + other places.  Success, I average 4 days a week, plus biking.  New dad win.
  • Reduce total spending (after debt payments) by at least 10%.  Fail.  We reduced spending by 7.5%, and perhaps some of that is due to the new child.  We must do better here.
Overall that is a 3/4 success rate.  Much better than 2017, the train is back on the right track.  The best part about 2018 was that these goals were met on one income for 7 out of 12 months last year.

2019: 

So what will become of 2019?  I have organized a few goals to make sure I stay on target.
  • Invest a total of $13000 across all accounts.
  • Receive $1500 in dividends from the taxable account.
  • Maintain or reduce weight while continuing to exercise ~ 4x per week and bike wherever I can.
  • Hold the line / reduce total spending (after debt payments) by around 5%.
I have a feeling, no matter what happens 2019 will be another wild ride.

Hope everyone has a great January and a Happy New Year!
- Dividend Gremlin
- Long all stock tickers mentioned

Monday, December 17, 2018

Recent Buy, December 2018

Tinsel Time Gremlin here to discuss my most recent buy.  It might surprise some of my relatives and some of my friends, but Christmas is one of my least favorites.  My favorites are the 4th of July and New Years, for a variety of reasons. Do I really need 3 or 4 new button down shirts?  Actually probably for work, but I really should get them because nothing ever seems to fit right.  Also as an adult, there is not much that I really want, well I do want to sleep in - but lets get realistic here.

Moving on, I added to my holdings to continue my push towards FIRE.  My long term goal is probably a decade or two out, but those building blocks are best lain right here, right now.  So lets get to it.

Today, I added shares of Toronto-Dominion Bank (TD) in my taxable account.  I bought 20 shares, with a total cost of $1,036.75 ($51.49 / share, plus commission).  The current yield is 3.84%. For a detailed summary of their history, etc. please visit: TD's Seeking Alpha Profile.

I already own the other 4 major Canadian Banks - BMO, BNS, CM, and RY.  This buy of TD completes the set for me, however it is my goal to continue adding to all of these holdings.  The Canadian banking complex is just that much more structurally sound than its USA counterpart.  In addition, it is hard to find a better dividend history than these 5 stocks.  Each can date their dividends back to the 1800s, which is before any of my ancestors even made their ways to North America.  That is consistency I am happy to live with and will let me sleep well at night.

This purchase will add $34~ to my forward 12 month dividend income.

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

What do you think of TD?

- Gremlin
- Long BNS, BMO, CM, RY, and TD

PS - a relative of mine works for TD bank and talking with her has echoed so much of what I read about TD.  They are conservative in their approach and do an excellent job of making sure their investments are headed in the right direction.

Friday, November 30, 2018

November Review / December Preview, 2018

Cold Air Gremlin here to talk about last and next months.  In the DC area it has been fairly cold recently, skipping fall and heading straight into winter.  As I just got over a cold, this has made running and biking outside a lot more interesting - and disgusting according to my wife.  Still its good to stay in shape, and I enjoy leaving the parking lot at the train station on my bike, getting out of there long before those in the car lines even exit the parking deck.  Speaking of sports, having a 1 year old is a real lesson in not being able to keep up with the news and current events.  Ironically, it does not feel like I have missed anything - and it is always easy to get back into something if I choose to.  This appears to be a year for that, at least because my Eagles are trying real hard to take a year off and not make the playoffs.

In terms of investing, this has been another good month.  All of my accounts have already surpassed their dividend output of last year, so next month will be a real profit maker.  Looking even further down the line, next year will even bigger, I cannot wait to push harder for FI that I have before.

November:

This month I made one purchase adding by adding acquiring shares of Eastman Chemical (EMN) in my taxable portfolio.

Last month I brought in a total of $294.85 in dividends ($82.22 taxable, $63.75 Roth, and $148.88 IRA).  This is an increase from last year (240.04 total) by 22.8%.

In terms of dividend increases, I realized* three raises from American Express (AXP), Royal Bank Canada (RY), and Verizon (VZ).  The increases are from 2% to about 11%.  I have now realized 46 raises thus far this year.

Next month I will realize five raises from McDonald's (MCD), Microsoft (MSFT), VF Corp (VFC), YUM China (YUMC), and Emerson Electric (EMR).  The increases are from about 1.5% to about 16% (all but EMR are higher than 9%).

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

December:

The mortgage continues has started to see more cash flowing towards the principal - not a huge number, but every little bit counts. Our debts currently outstrip our assets (I choose not to count the house as an asset).  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  My car is getting paid at doublish time, and I suspect I can finish it off within 9 months from now - which will be nice because I plan on keeping that car for 20 years.  Debt is being eliminated, and we are still building and assets.  A second income goes a long way.

My next purchase will be in December, which makes for 6 consecutive months of buys going back to July (sweet).

Next month should produce around $400 in dividends, which is a 14% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great December.
- Dividend Gremlin
- Long all stock tickers mentioned

Tuesday, November 20, 2018

Recent Sale / Recent Buy, November 2018

Caffeinated Gremlin here to discuss a recent sale and buy (I never used to drink coffee, then I became a dad... so it happens sometimes).  I have mentioned the sale before, but I am going to give it a brief discussion here.  The proceeds of the sale, combined with new capital, fueled my new stock purchase.  I like to think of the new stock purchase as my Thanksgiving Day gift, to myself.  The spirit of the holiday is being appreciative for everything around you, so I am just showing some love to the portfolio that will build wealth and passive income for me.

The Sale:

I sold out of my General Electric (GE) position about two weeks ago.  GE.  GE has been on a spectacular downward slide, presenting a cautionary tale for both investors and company executives.  The first lesson is to not over expand beyond logical competencies.  The second is do not load up on debt or buy back shares at terrible valuations.  The third is that any company cannibalizing its holdings to pay off debt has major problems.  GE did all three.

Those lessons are generalizations to an extent, but think about a couple of ludicrously stupid red flags that GE presented the world.  The biggest being flying two corporate jets, you know in case one breaks down.  This company is literally known for its jet engines, so this totally inspires confidence.  GE's aviation group, along with healthcare, is one of their strongest arms; but still it is so dumb.  Then the CEO claimed he did not know about the practice; good job.

The other issue was that of GE's TV ads.  Their ads featured a young girl who has a knack for engineering and grows up to be a GE engineer OR a guy explaining all the coding he does for GE locomotives and wind turbines.  Why on earth is a company that sells jet engines, wind turbines, power systems, and large health machines advertising on regular TV?!  People who are buying those items are not influenced by watching TV.  "Ohh I like the GE turbofan, lets put that on our next plane," said Joe the Aircraft designer - approximately zero times.

If you're going to do things like that, what are the odds your company is installing continuously running toilets in the C-Suite so they can flush money down the drain faster?  So I sold out, and put the cash in a better place.

The Purchase:

Yesterday*, I added to an existing position by purchasing shares of Eastman Chemical (EMN) in my taxable account.  I bought 13 shares, with a total cost of $1,067.75 ($82.12 / share, includes commission).  The current yield is 2.7%. For a detailed summary of their history, etc. please visit: EMN's Seeking Alpha Profile.  This is my second purchase of EMN this year, and I am now at approximately 6% of my portfolio in basic materials between EMN, SON, and WLK.  At this point I am maxed out in this sector, but its one that is clearly underrated.  For all the reasons in that earlier entry, plus a better price, I added to EMN.  My total share count now stands at 25 for EMN.

This purchase will add $29.12 to my forward 12 month dividend income, the sale will decrease my forward income by $21.52.  Net is $7.6 gained.

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

What do you think of EMN?

Happy Thanksgiving!
- Gremlin
- Long EMN, SON, and WLK
* - had I waited a day, the price would have been even better.  Time in, not timing, the market.

Wednesday, October 31, 2018

October Review / November Preview, 2018

Busy Gremlin here to chat about October and November.  Work is ramping up for me, which is a good thing.  I am staring down a new work title, and the new assignments that come with it.  Normally this thing would receive a sigh, but in this case it should be hugely positive in terms of both my day to day and my bottom line.  On the home front the boy is moving a lot, which is great for him and my daily step count.  As a parent there is never a night off and rarely any down time.

While my step count gradually increases, the stock market has taken a recent nose dive.  I think this has been a long time coming, no growth has been historically maintained forever (even if China thinks they can do it today).  Sure enough, history shows this repeated boon / bust business cycle over and over again.  There are always numerous causes for success or failure, the only thing that seems to change is new triggers that cause the next economic downgrade.  Anyways, time to start taking advantage of these prices, especially in the coming month(s).

October:

This month I made one purchase adding by adding acquiring shares of AT&T (T) in my taxable portfolio.  I also sold all of my shares of General Electric (GE) at a loss with their announcement of a dividend cut (essentially all but elimination).  My GE move merits a longer write up, but I don't have time.  So suffice to say, GE is beyond frustrating and reminds me of a train wreck.  "Since the dawn of train man has loved train wrecks" - save for if you are invested in that wreck.

Last month I brought in a total of $95.72 in dividends ($76.22 taxable, $9.5 Roth, and $10 IRA).  This is an increase from last year (68.22 total) by 40%.

In terms of dividend increases, I realized* three raises from Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CM), and Realty Income (O).  The increases are from 4% to about 19%.  I have now realized 43 raises thus far this year.

Next month I will realize three raises from American Express (AXP), Royal Bank Canada (RY), and Verizon (VZ).  The increases are from about 2% to about 11%.

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

November:

The mortgage continues has started to see more cash flowing towards the principal - not a huge number, but every little bit counts. Our debts currently outstrip our assets (I choose not to count the house as an asset).  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  My car is getting paid at doublish time, and I suspect I can finish it off within 10 months from now - which will be nice because I plan on keeping that car for 20 years.  Debt is being eliminated, and we are still building and assets.  A second income goes a long way.

November should be slow, and the holidays should help that.  My next purchase will be in November, I hope this market maintains its current unpredictable course, since who doesn't like bargain?

Next month should produce around $265 in dividends, which is a 10% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great November.
- Dividend Gremlin
- Long all stock tickers mentioned, except GE

Wednesday, October 10, 2018

Recent Buy, October 2018

Phone A Friend Gremlin here to discuss my most recent buy.  Recently a friend of mine got to be on Who Wants to Be a Millionaire.  The main shock for me is that someone is still making new episodes of that show.  Having watched him play, I wish he could have done better, but at least he got to have a good time and win some money.  Definitely seems like something worth trying, who knows maybe I will sign up for it too!

Moving on from that earned game show cash, I recently made another stock purchase.  This means I have been able to purchase shares once each of the last four months counting October.  This is the goal, to be able to add capital and increase my bottom line in terms of future taxable income.  I am still relatively early in the process of accumulating a passive dividend income, but still each action is exciting.  Indeed it feels like a game as well, similar to a long haul strategy games such as Civilization, Caesar, or Sim City.  Each new addition provides more cash to buy more shares.  That comparison reminds me that this is a meaningful venture that can also be fun in addition to producing real value.

Last week, I added shares of AT&T (T) in my taxable account.  I bought 30 shares, with a total cost of $1,027.51 ($34 / share, includes commission).  The current yield is 5.95%. For a detailed summary of their history, etc. please visit: T's Seeking Alpha Profile.

I already own T in my Roth account and Verizon (VZ) in my IRA.  I like that T will be a fully integrated communications company.  The future of both companies, despite current debt and headwinds, is promising.  People just rely on these entities more than they realize, and that reliance will only grow over time.  I work hard on a personal level to disconnect, but even for someone who works at it - it is hard.  Most people are plugged in all the time (if you are here reading this, think about how and why), and they don't even realize how dialed in they are.

Also being plugged into the FIRE movement (online, because where else?), we know how to cut these bills - but most still don't and even then most cut rate companies pay royalties or in some cases are outright owned by the big players.  Also the issue of spectrum ownership will be a huge issue within a few decades, and that will be interesting to witness.

This purchase will add $60 to my forward 12 month dividend income.

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

What do you think of T?

- Gremlin
- Long T and VZ