Friday, April 6, 2018

Recent Sale / Buy April and Other Developments, 2018

Doing What I Have Done Gremlin here to talk about two recent sales and a buy.  Sales you say?  I rarely sell stuff, but recently I sold two of my positions, the only two that do not generate a dividend.  That was the entire reason for selling.  These two stocks, Pengrowth Energy (PGH) and Willamette Valley Vineyards (WVVI) have been in my portfolio since about 2010.  It was a tough move to sell both, however it was decided that all hands should be on deck working for me.

PGH was sold at a big loss, though proceeds + dividends received + tax harvesting makes up for some of that - but not enough.  It was a dead weight in my portfolio, and every dollar that cash can earn back is appreciated.  It is at a point where waiting and watching continual failure was just not worth it.  WVVI, on the other hand, was sold for a very handsome profit.  I liked owning them, it felt cool.  I would like to own a vineyard or a brewery in real life, and I am sure one day I will get there.  However, at this point I want that cash onboard driving this FI ship faster and faster. So enough of this sad selling news, what did the proceeds buy?

BUY:
Today, I added a new position by purchasing shares of the Royal Bank of Canada (RY) in my taxable account.  I bought 15 shares, with a total cost of $1,154.72 ($76.52 / share, plus commission).  The current yield is 3.90%.  The P/E ratio for RY sits today at approximately 12.99, trailing.  The yield is slightly below the 5 year average of about 4.01%, and P/E is slightly above the average of the past 5 years (12.18).  RY has a trailing payout ratio of approximately 51%.  RY is a member of the Canadian Dividend All-Star list, with 7 years of growth.  They, along with the other major Canadian banks froze payouts during the 2008 Financial Crisis, only to resume them with two years.  RY has been paying dividends since 1870, and has never once missed a payment.  I am comfortable with the current and historical ratios, this is a solid stock and will serve me well for a long time.

RY, along with my other Canadian bank holdings of Bank of Nova Scotia (BNS), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CM) make up four out of the five big Canadian Banks.  I intend to add the other, Toronto Dominion (TD), too.  Their collective history and the regulations that bind them make them, as a whole, the juiciest banking group in the world to me.  Indeed, just look at their general Wiki entry if you don't believe me.  That history says it all - during the Great Depression no banks closed, during the 1980s only 2 closed.  By contrast, 9000+ banks failed during the Great Depression in the USA.  The USA has a banking industry that seems to waver between stable and made out of spaghetti; so for my investments in banking I favor the stability of the Great White North.

OTHER NEWS:
In other news I am aiming to start a secondary portfolio using M1 Finance.  M1 is a fee-free brokerage of sorts in the vein of old Loyal 3.  However, it allows access to the whole market and investments are triggered in a batch style when the necessary amount of funding is reached.  For a much better review of the site please read Retire Before Dad's take.

My goal with this account is to make a team of also-rans.  What I mean by this is choosing stocks that I routinely want to buy, but when the time comes I always pass over them for a better deal at the time.  So this will be a team of number 2s.  To that end I have titled the fund, The 2nd Bananas.  This is a tribute to an old article on the website Grantland, describing the best 'side kicks' of all time.

By the time this account is getting to where I want it to be it is likely fees will be introduced.  At that point I will close the account moving all the assets back into my standard brokerage.  So it goes, so it goes.

Finally, I will be doing some work travel in the next few weeks.  Hopefully I will be able to put up a brewery review, as its been a while since I have done that.

What do you think of RY and M1 finance?

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

- Gremlin
- Long all stocks mentioned minus TD, PGH, and WVVI

Friday, March 30, 2018

March Review / April Preview, 2018

Personally Intrigued Gremlin here to discuss this past month and upcoming April.  Dividend wise March was a madhouse, more on that later.  March was also busy at home with almost every moment at home consumed by baby care or social gatherings in some way related to baby stuff.

Meanwhile, I am also working at saving cash all the time, in most every aspect of my life.  So far the results are pretty ordinary, but given enough time the result will be extraordinary.  Those results will be very rewarding and in spite of whatever political or economic action that may come - my path is directly forward with saving and investing.  Living in the DC area I hear a lot of theorizing of how things can go.  Most of that stuff is just noise, and I patiently disregard most of it, while personally mocking some of it.

March:

This month I made one purchase, acquiring shares of the Bank of Montreal in my taxable account.

Last month I brought in a total of $380.58 in dividends ($156.97 taxable, $82.86 Roth, and $140.75 IRA).  This is an increase from last year ($282.82 total) by 34.5%.

In terms of dividend increases, I realized* 11 raises from Amgen (AMGN), Archer-Daniel's Midland (ADM), Dominion Resources (D), Dunkin Donuts (DNKN), Eaton Corp (ETN), Union Pacific (UNP), Waste Management (WM), YUM! Corp (YUM), Prudential (PRU), 3M (MMM), and T-Rowe Price (TROW).  The increases ranged from 4% to about 20%.  I have now realized 18 raises thus far this year.

Next month I will realize five raises from the Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), Coca-Cola (KO), Realty Income, and Walmart.  The increases range from 0.2% to about 5.5%.

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

April:

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 on just one income

The weather has gotten nice and I have 'recovered' some bike parts that might have gone missing thanks to someone who wanted bike parts at the end of last year.  That means I will be riding my bike almost every day (I ride to my nearby commuter train station).  Between riding my bike, having work cover my train cost, and keeping food costs very low - I am saving a ton of cash despite my wife having taken the year off to spend with our son.  Once she resumes work our income will be outstanding, and our investments will benefit handsomely.

My next buy will probably be in May, but there is an outside chance it will come in April.

Next month should produce around $75 in dividends, which is a 6% YOY increase.  The first month of each quarter remains a bit of a weak link on my dividend calendar.

My portfolio page is currently up to date.

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

Monday, March 19, 2018

Recent Buy, March 2018

Bracketed Gremlin here to discuss a recent stock buy.  Did anyone here finally call the 16 seed blowing out a 1 seed in the NCAA Tournament?  I didn't, but I did find the whole thing amusing.  In sports, if I have no horse in the race, I universally root for the underdog.  Its just more fun seeing someone win when they were not supposed to do that.  Anyways, if I cannot win Buffett's million, I might as well just buy some quality dividend paying stocks.  So that is what I did, picked up some more shares to further pump my dividend income.

Today, I added a new position by purchasing shares of the Bank of Montreal (BMO) in my taxable account.  I bought 15 shares, with a total cost of $1,135.94 ($75.27 / share, plus commission).  The current yield is 3.90%.  The P/E ratio for BMO sits today at approximately 13.77, trailing.  The yield is slightly above the 5 year average of 3.88%, and P/E is slightly above the average of the past 5 years (11.75).  BMO has a trailing payout ratio of approximately 51%.  BMO is a member of the Canadian Dividend All-Star list, with 6 years of growth.  They, along with the other major Canadian banks froze payouts during the 2008 Financial Crisis, only to resume them with two years.  BMO has been paying dividends since 1829, and has never once missed a payment.

BMO is my third Canadian Bank stock, after Canadian Imperial Bank of Commerce (CM) and Bank of Nova Scotia (BNS).  The Canadian banking sector is very solid, even with all the press surrounding the very real housing bubbles in Toronto and Vancouver.  BMO has the least exposure to those markets of all of the Canadian majors, and it has a strong presence in the USA with Harris Bank.  It may not be as conservative as Toronto-Dominion Bank, but it still has an impeccable and set of credentials.

This purchase will add approximately $36 to my forward 12 month dividend income.

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

What do you think of BMO? 

- Gremlin
- Long BMO, CM, and BNS

Thursday, March 1, 2018

February Review / March Preview, 2018

Hanging Out Gremlin here to discuss this past month.  February was a strong month.  I got to watch enough Olympics to be tired of winter sports, minus hockey, until the next go around.  Speaking of hockey, it was also one of the best gold medal games I have ever seen.  Onto the real world, there are a lot of challenges going on right now.  The little one has learned to roll and is getting more engaged every day.  Some point soon, in say the next 10 years, I am sure he will intentionally try to make me mad.

On the home financial front, I have continued trimming finances, and the wife has done a fairly good job with that as well.  I am still able to continue stockpiling fresh cash with dividends in the effort to make new purchases.  The goal for the next few months is to pad my main accounts with cash so I am able to act should a very nice opportunity arise.

February:

This month I made no new purchases in any account.

Last month I brought in a total of $233.83 in dividends ($28.49 taxable, $59.14 Roth, and $146.2 IRA).  This is an increase from last year ($225.94 total) by 3.5%.  The percentage would be higher, but Discover (DFS) has switched its payout month to March.

In terms of dividend increases, I realized* five this month from from O, Abbott Labs (ABT), AT & T (T), Omega Healthcare (OHI), and my employer (B**).  The raises range from 1% to 11%.  I have now realized 7 raises thus far this year.

Next month I will realize 11 raises from Amgen (AMGN), Archer-Daniel's Midland (ADM), Dominion Resources (D), Dunkin Donuts (DNKN), Eaton Corp (ETN), Union Pacific (UNP), Waste Management (WM), YUM! Corp (YUM), Prudential (PRU), 3M (MMM), and T-Rowe Price (TROW).  The increases range from 4% to about 20%.  Next month will be nuts.

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

March:

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 on just one income!

My next buy will likely be this month (in March).

Next month should produce around $375 in dividends, which is a 32% YOY increase.  Boom.

My portfolio page is currently up to date.

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

Tuesday, February 20, 2018

One Eye on the Future, the Other on the Crystal Ball

Patient Gremlin here to chat about the stocks I am currently watching.  Its been a hectic month so far, thankfully its almost done.  Little Gremlin has decided that sleep is not always his thing, though clearly it should be.  On top of that are the numerous birthday parties and events that seem to run up until the end of this month.  March will be a welcome reprieve from all of this.  In the meantime, at least the Olympics are happening.  I am always a big fan of them, regardless of the absurdity of the event.  For instance, I like watching ski jump, luge, skeleton, bobsled, but I am curious as to when did people think any of these were reasonable modes of transportation?  Clearly they are not, but they are as always entertaining.

The market has been superbly unpredictable.  I have stated online and to friends that I believe a serious correction (or worse) is knocking on our economic doorstep.  The overall economy, both globally and in the USA, has been rocketing upward.  That cannot continue forever.  Indeed, there are many avenues through which a small meltdown could occur - crypto-currency instability, real estate development (number of issues here), car debt, low savings  rate, etc.  Pick your poison, one of them or something completely unexpected, will throw a wrench in the gears.  History shows these things often surprise the vast majority of people and experts at the time, so my bet is on whatever is farthest out in left field.

Considering all of that, what am I looking at in terms of future investments?  Below are a few stocks from different sectors that I have a strong eye on heading into the end of February and beginning of March:

Basic Materials:

Eastman Chemical (EMN): Current (TTM) PE = 9.90, yield = 2.24%

EMN is a diversified chemical company.  They have an 8 year track record of dividend raises, which are consistently in the double digits.  Despite being an American company, most of their revenue comes from abroad, especially Asia.  This is a novel source of income for US based companies.  The company is unique itself, having started as a spinoff of the now sad Eastman Kodak in 1920.  It produces chemicals, plastics, and fibers in seven countries.

Celanese Corporation (CE): Current PE = 16.75, yield = 1.80%

CE, much like EMN, is a chemical corporation with an 8 year dividend raising track record.  However, it lacks the big name history and is more focused primarily in the coatings and adhesives sub-sector.   CE has a lower yield as EMN, despite similar payout ratios.  Still, CE has managed to put down monstrous 20+% increases over the last 7 years. 

Consumer Staples:

Hormel (HRL): Current PE = 21.55, yield = 2.18%

HRL has managed to increase dividends for 52 years, and averages double digit (mid-teen) raises annually over the last 10 years.  That is just nuts.  Their main products are pork, turkey, and other meats.  Its valuation is indicative of the quality that surrounds this company.

Diageo PLC (DEO): Current PE = 19.67, yield = 2.46%

This London based company has raised its dividend annually for the last 25+ years, paying them semi-annually in GBP.  They make liquor (mostly), wine, and beer.  When times are good people celebrate and drink.  When times are bad its a different emotion with the same outcome.  This is a rain or shine stock, and one I have been watching closely for sometime now.

Finance:

Bank of Montreal (BMO): Current PE = 12.25, yield = 3.51%

BMO is the least flashy bank of the big 5 in Canada.  It is the least invested and exposed to explosive housing growth there, and its more or less the slowest growing.  However, it is rock solid.  The yield is excellent and growing consistently.  Additionally, it has a significant exposure to the US market allowing it to hedge both nations.

Toronto Dominion Bank (TD): Current PE = 19.67, yield = 2.46%

TD is the most conservative of the Canadian banks, though it is not the largest.  Sure the yield is lower than its neighbors, but the extra serving of growth they have with it covers that up nicely.  It has excellent exposure to the US market too.  However, what I like most is their risk tolerance.  This would probably be the best balance to my more risky Canadian Banks: CIBC (CM) and Bank of Nova Scotia (BNS) at this point.

What stocks are you looking at right now?

- Gremlin
- Long BNS and CM

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