Wednesday, January 31, 2018

January Review / February Review, 2018

Relaxed Gremlin / Winter Gremlin here to discuss this past month.  I am grateful for the holidays and massive amount of birthdays to be over.  It is a good time to look forward to a new year, one where the little dude starts moving (and probably talking back), and one where our savings and financial side will be pressed to flourish.  My wife will not be making any meaningful income for at least 8 more months, which means that we need to be smarter than ever.  So far, we are off to a good start, and I predict we will only do better as the year progresses.  So far my personal spending has almost dropped off a cliff, and I will do my part to keep us marching towards financial freedom.

January:

This month I made one purchase, adding Dominion Energy (D) to my taxable account.

Last month I brought in a total of $74.41 in dividends ($65.41 taxable, $9 Roth, and $0 IRA).  This is an increase from last year ($67.05 total) by 10.9%.  My new investment in Leggett and Platt (LEG) pushed my dividend growth inspite of the General Electric (GE) dividend cut.

In terms of dividend increases, I realized* two this month from from Realty Income (O) and Disney (DIS).  The raises range from 0.2% to 11%.  These are first two increases of 2018, added to that is one cut of 50% from GE.

Next month I will realize four raises from O, Abbott Labs (ABT), AT & T (T), and Omega Healthcare (OHI).  The increases range from 1% to about 5%.

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

February:

The mortgage continues, so at least part of our 'rent' counts towards our house. Our debts currently outstrip our assets.  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  Both my car and house are receiving slightly out-sized payments monthly.  We are effectively eliminating debt, while still building and assets.  Even with a new Gremlin in the lair. This is a long game, and I am nothing if not patient.

My next buy will likely be in March.

Next month should produce around $219 in dividends, which is a 0% YOY increase.  Several holdings are transitioning to paying in the 3rd month of the quarter from the second, which may impact my numbers on the surface, but not from an annual perspective.

My portfolio page is currently up to date.

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

Tuesday, January 9, 2018

Recent Buy, January 2018

Resting Easy Gremlin here to talk about a stock purchase I made.  The new year seems to be off to anything, but a slow start.  Markets are climbing higher, people won't stop talking about how they have all broken their resolutions already, people are returning the gifts the don't want or know how to use, work has resumed, and the cold has parked its butt right on my front lawn.  So many things to ponder, do, and forget about.  For myself the year has started off with a bang, with a mini promotion, some extra cash from work, and of course a meeting to talk about it all (insert sense of dread even if you know they like you).  So lets forget about all of those things and focus on what really matters, such as what I bought in pursuit of financial independence.

Today, I added a new position by purchasing shares of Dominion Energy (D) in my taxable account.  I bought 14 shares, with a total cost of $1,087.32 ($77.17 / share, plus commission).  The current yield is 3.97%.  The P/E ratio for D sits today at approximately 22.85, trailing.  These are above the historical 5 year average for the stock with the average yield being 3.65%, and significantly better than average P/E being 40.32.  D has a trailing payout ratio of approximately 87%.  D has 15 years of dividend growth and is a member of the Dividend Contenders.  This purchase will add $43.12 to my 12-month forward income.

D is my first utility stock.  It's metrics have become a lot sweeter of late, due to decreased belief in its value as it plans to take over Scana (SCG), a South Carolina utility.  This deal could be huge in terms of future gains, but also will come with short term headaches.  As a long term investor I am comfortable with this.  In addition, D sports a higher than usual payout ratio for me, however they are a utility and that is common within that space.  Being a mainly electric (but also gas) utility it is fairly understood what they do, however I will let them explain in detail:

"Based in Richmond, Virginia, Dominion Energy is an integrated energy company with approximately 25,000 megawatts of electric generation capacity; 15,000 miles of natural gas transmission, storage, distribution and gathering pipelines; and more than 63,000 miles of electric transmission and distribution lines. Dominion operates one of the nation's largest natural gas storage systems, is nearing completion of an LNG export facility in Maryland, and is 48% owner of the proposed Atlantic Coast Pipeline."

I am now both a shareholder and customer of D.  They have proven very good as my electric provider.  The area I live in, Northern Virginia, has been growing at an astounding rate over the past two decades.  Growth here and in the other major areas serviced by D currently has been very good and consistent.  So it is not a stretch to say that their growth will continue.  If the acquisition of SCG goes through, then it is just icing on the cake.

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

What do you think of D? 

- Gremlin
- Long D

Friday, December 22, 2017

December 2017 Review / January 2018 Preview & End of Year Review

Happy End of Year Gremlin here to talk about December and the end of this year.  This December has been very busy.  I have completed another professional certification (CSP), dealt with Christmas shopping, run the holiday party gauntlet, and delivered a work presentation.  All while changing diapers and doing all that good dad stuff.  Most positive things should be challenging, so it makes sense that December has indeed been a splendid month.  I expect the hard work to pay off strongly in a monetary, professional, and social fashions.  Part of getting better opportunities are the credentials you have and putting forth a good personality along side of it.

It is also the end of the year.  2017, for all its hubbub and commotion, was good year for me.  Bought a house, had a baby, etc.  My investments and life have a lot of momentum, and the goal is to keep that going into 2018.

December:

This month I added one new position, Leggett and Platt (LEG), in my Roth IRA. 

Last month I brought in a total of $349.36 in dividends ($135.59 taxable, $80.64 Roth, and $133.13 in my IRA).  This is an increase from last year ($262.32 total) by 33.1%.  This total is my new highest ever.  My IRA is now a year old, and my percentages will not look as ridiculous, but the totals will continue to look juicy.

In terms of dividend increases, I realized five this month from McDonald's (MCD), Microsoft (MSFT), Starbucks (SBX), Union Pacific (UNP), VF Corp (VFC), and Emerson Electric (EMR).  The increases range from 1.3% to 20% - most being in the 6-10% range.  This brings my total raises to 50 on the year, with 1 cut and 1 initiation.

Next month I will realize two dividend increases from Realty Income (O) and Disney (DIS), at 0.2% and 11.5%, respectfully. Also one cut from General Electric (GE).

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

January:

The mortgage continues, so at least part of our 'rent' counts towards our house. Our debts currently outstrip our assets.  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  Both my car and house are receiving slightly out-sized payments monthly.  We are effectively eliminating debt, while still building and assets.  Even with a new Gremlin in the lair. This is a long game, and I am nothing if not patient.

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

Next month should produce around $73 in dividends, which is a 3% YOY decrease.  This decrease is thanks the the excellent leadership at GE.

My portfolio page is currently up to date.

2017:

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):
  • Break $2500 in total dividends.  Fail. $2481 - Ugh dammit.
  • Achieve forward dividends for taxable accounts of $1000.  Fail. $926 - Dammit, again.
  • Get back into shape, specifically workout 5 times a week.  Mostly a success, I am about 5lbs lighter than I was at this time last year.  Even with the baby I am able to workout 3/4 times a week, so thumbs up.
  • Bike to as many local places as possible, do less driving (already half way there as I do not drive to work).  Success.  I usually bike to the train station from my new house (but my bike seat was stolen recently, sigh).  I have biked and walked to the store bunch to do shopping too.
Overall that is a 2/4 success rate.  Not the best performance overall.  2017 had a lot of challenges, a new baby, a new house, etc.  I came pretty close to what I wanted and that is a success itself.

2018: 

So the question becomes what do I attack for 2018?  My main goal is to achieve the biggest swing in net worth overall.  There are two facets to that, first targeting debt and second adding wealth.

  • Invest a total of $8000 next year, $6000 in taxable accounts, at a minimum.
  • Achieve forward total dividends for all accounts of $3000.
  • Keep getting into shape - lifting 2x and running 2x / week and bike to the train station + other places.
  • Reduce total spending (after debt payments) by at least 10%.
A huge goal for 2018 will be to invest more and spend less.  This is a bigger challenge than it seems because my wife will not be working in any capacity until August.  We have decided it best for her to stay with the baby for the 1st year of his life, before he gets to spend his days with Grandma.  We both strongly believe this is in his best interest for healthy development.

We are admittedly boring these days, and that is fine by me.  Its cheaper and honestly, I do just as much enjoyable stuff without blowing loads of money.  I believe 2017 was a turning point and 2018 will reflect that.

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

Monday, December 11, 2017

My Second Double

Investor Gremlin here to talk about the second time a stock of mine doubled in value over its initial purchase cost.  Today, my shares of Westlake Chemical (WLK) broke through the 100% barrier, becoming the second stock in my portfolio to do so.  My position in WLK was initiated at the end of 2016 using rollover 401k funds in my IRA.  Of all the companies in my IRA WLK was added as the "large percentage / low yield grower."  In addition, WLK represented the first materials company in my portfolio overall, which is now augmented by my recent acquisition of Sonoco Products (SON).

Overall the ride with WLK has been pretty wild.  My 45 shares were worth $2500 at the end of last year, and now are worth more than $4500 (original investment was $2270).  I have had a few friends tell me 'time to sell.'  I disagree, I am here for the income primarily.  The capital gains are nice, but I currently do not see the upside in selling without risking future payouts.  I see WLK continuing in its prosperity, and that the price run up is due more to sound fundamentals as opposed to rampant speculation.

What do you think of WLK?

- Gremlin
- Long WLK and SON

Wednesday, December 6, 2017

Recent Buy, December 2017

Admiring the Furniture Gremlin here to talk about my recent buy.  It has been a very busy couple of weeks going between the holidays, which means breaking down the past one and setting back up for the next one.  On top of that I have several work related functions, including another professional test that are eating into my time.  Not to mention a baby Gremlin with his own demands and needs.  Keeping up with exercising, the market, and everything else I enjoy is harder.  It makes me want to work not only harder, but also smarter so I can get as much time back as possible.  So in working smarter one typically acquires new skills and knowledge.  So here is a new bit of knowledge I am adding to the pile, which will contribute financially:
Today, I added a new position by purchasing shares of Leggett and Platt (LEG) in my Roth account.  I bought 25 shares, with a total cost of $1,159.08 ($46.09 / share, plus commission).  The current yield is 3.12%.  The P/E ratio for LEG sits today at approximately 19.23, trailing.  This is about the same as the historical 5 year average for the stock with the average yield being 3.12% and significantly better than average P/E being 28.07.  LEG boasts a trailing payout ratio of approximately 56.7%.  LEG has 46 years of dividend growth and is a member of the Dividend Champions.  This purchase will add $36.00 to my 12-month forward income.

LEG has provided dividend increases for a long time, and generally averages around 4% dividend growth each year.  LEG is a well known company, so most people probably know what they do.  In case you don't here is a description in their words:

"Leggett & Platt Inc is a manufacturer that conceives designs and produces engineered components and products found in homes, offices, retail stores, automobiles and commercial aircraft."

LEG is my first Consumer Discretionary company housed in my Roth account.  LEG makes mainly furniture, of all shapes and sizes.  The residential and industrial components have plateaued, but their commercial and specialty groups have ballooned.  I believe they will ride those two groups to be a major continuing success.  The commercial group supplies automakers, airplanes, trains, etc. and the amount of those will only go up the more people there are in the world moving around.  In addition, their specialty line fills in a lot of niches that are hard to fill otherwise.

Humans are more concerned about better furniture - make sure it is ergonomic, comfortable, useful, stylish, and portable - and with burgeoning growth in terms of both world population and wealthy segments of that population this growth in success will continue.  Lastly, this is also not an industry I see poised to lose out to internet mania.  Perhaps one day robots will need a chair and an ottoman to rest their feet (or circuits), but now is not that time.

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

What do you think of LEG? 

- Gremlin
- Long LEG

Thursday, November 30, 2017

November Review / December Preview, 2017

Turkey Trot Gremlin here to discuss November.  As we speak it is high time for the holidays; the Turkey Festival of Winter Fattening is in the rear view mirror and the Big Red Suit Display Case is on the horizon.  This means getting gifts for my nieces / nephews and seeing the family for a second time (or 1st if I missed them prior).  Hockey is now in full swing (though sadly the Olympics will be a bit short on that end), football is winding down.  It is a great time of year.  Time to be frugal and continue to workout without using a gym, make lunches for under $2 every day, and generally skimp on unneeded luxuries.  Having a kid helps out with this a lot.  This is the last month of 2017 coming up, and I view it as a strong springboard into an even better 2018.

November:

This month I made no new purchases.

Last month I brought in a total of $240.04 in dividends ($36.25 taxable, $58.34 Roth, and $145.45 IRA).  This is an increase from last year ($235.86 total) by 1.8%.  Affecting this change were several stocks moving their payment to December including Discover (DFS), and some companies such as Dunkin Brands (DNKN) not paying out early like they did last year in November.

In terms of dividend increases, I realized* three this month from from American Express (AXP), Omega Healthcare (OHI), and Verizon (VZ).  The raises range from 1.6% to 9%.  Thus far for 2017, I have realized 44 dividend increases!

Next month I will realize six raises from McDonald's (MCD), Microsoft (MSFT), Starbucks (SBX), Union Pacific (UNP), VF Corp (VFC), and Emerson Electric (EMR).  The increases range from 1.3% to 20% - most being in the 6-10% range.  This will propel me to a total of 50 increases, 1 initiation, and 1 cut I discussed earlier this month.

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

December:

The mortgage continues, so at least part of our 'rent' counts towards our house. Our debts currently outstrip our assets.  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  Both my car and house are receiving slightly out-sized payments monthly.  We are effectively eliminating debt, while still building and assets.  Even with a new Gremlin in the lair. This is a long game, and I am nothing if not patient.

I should be making a buy in December, unless the Mr. Market goes bonkers.

Next month should produce around $348 in dividends, which is a 32% YOY increase.  I anticipate ending the year with a YOY increase of 75%, thanks mainly to my new IRA holdings.

My portfolio page is currently up to date.

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

Monday, November 20, 2017

2017's Dividend Increases

Dividend Gremlin here to discuss this 2017's dividend increases that have been received.  At this point in the year no new increases are expected to hit my account, though some may still be announced before the end of the year for 2018.  At this point these increases are not the driver of investment income growth, and they can be easily forgotten about.  However, though their present impact is minimal, longer term their impact will be both easier to quantify and undeniable.  The real power of compounding is not comprehended until much later in the game, which means that those who do not foresee this in the present will miss out on it in the future.

So far this year I have received a record fifty (50) dividend increases from a total of forty (40) companies.  The increases range from 0.2% at the low end given quarterly by Realty Income (O) to 16% and over given by Discover (DFS).  Of note, four of my companies had multiple increases including Bank of Nova Scotia (BNS), CIBC (CM), O, and Omega Healthcare (OHI).  These increases reflect growth coming from a wide variety of industries, products, and businesses.  All told they have added approximately $175 to all my accounts in terms of forward projected income.  It would take an additional ~$5800 invested at a 3% yield to nominally achieve that.

In addition, I experienced spin off one company, YUM China (YUMC), establishing its first ever dividend; chronicled earlier here.  That was exciting news, but there was one sore spot with a singular dividend cut coming from problem child General Electric (GE).  GE started the year off with a dividend increase, only to cut the yield by 50%.  Even with that dividend cut, my projected income is still significantly higher than last year (my above $175 total reflects this change). 

My stock holding diversity shows, in a positive light, that when one company gets out of line and cuts its dividend the impact is minimal.  There are so many others working out there to boost my income regardless of GE's failure to even maintain its dividend.  This is the second most important part of investing, that the rest of your portfolio keeps moving even if some parts fall behind.

I have discussed these issues with friends, who usually just scoff at these increases as being mere chump change.  That is their prerogative, but it will not alter my methods or progress.  Sure it is chump change now, but get back to me in a few years, see how you feel then.  It is my sincere hope that those of you crazy enough to read anything I post see this logic, and put on your running shoes because this game is a marathon not a sprint.

- Gremlin
Long O, DFS, BNS, CM, OHI, YUMC, and GE (😒)