January, Review / February, 2016 Preview

Blizzard Gremlin here to talk about January. This past month has been interesting.  It started with a great New Year's, followed abruptly by my last deployment for a week to upstate New York and the six hour drive each way that entailed.  Afterwards things calmed down in my work and private life.  I am quickly approaching working for my same company on site for a major Federal agency.  I will still be in the same position nominally, but I will be providing support only to that organization, for an extended period of time.  The position is not very interesting, mildly intimidating, but it also kind of saddens me in that I will not have the breadth and depth of projects I used to have.  That was one of the cool parts of my career, I hate to think I could miss out on cool projects that help build my career and salary.  In the long run my aim is still to find a new job, one that suits me better and does a great job compensating me for my limited time I have on this planet.

In more fun and less serious news, I finally saw the new Star Wars movie.  It was much better than the new trilogy, not better than the original trilogy, but was entertaining nonetheless.  I've also kicked off the year by listening to a new Podcast.  This year will be a great year for entertainment as a whole.  I will take a (cost reduced) trip to Europe this summer, the Olympics will happen, and my favorite sporting event, the European Football (Soccer) Championships, will take place.  All of this will keep my eyes and mind busy, but my portfolio and pursuit of FI will continue.  The march towards FI is a long one that must be consistent, persistent, and irresistible despite being surrounded by heavily consumer culture that wants you to buy everything and is always looking to waste your cash.  Outside of trying new beer and wine, they have a tough sell with this guy right here.

January:

I was able to put $556 to work in Loyal3 over the course of last month, so that was a good start. I also initiated two new positions in Ameriprise Financial (AMP) and Discover Financial Services (DFS) both in my Roth IRA account.

Last month I brought in a total of $75.76 in dividends ($49.41 taxable , $26.35 Roth).  This is an increase from last year ($70.04 total) by 8.17%.  This is a little more than I had expected, which is pretty cool.  2016 should build upon the improvements to quality positions that I started last year. 

In terms of dividend increases, I realized one this month from Realty Income (O) of approximately 0.26%.  I find this growth to be the best kind, as it happens with no extra effort or investment on my part.

Next month I will realize 2 dividend increases: O and AT&T (T).  The increase from O is almost 5%, which is simply fantastic.  I had not expected anything beyond O's normal quarterly increases, and here they go again blowing up the spot.  Got to love that.  T's increase is in the 2% range, not a lot to get excited over, but the fact is they are steady and can be counted on to add one penny per share each quarter every year.  I can live with and appreciated that approach.

Sadly, I will also live with Kinder Moragn's (KMI) 75% dividend cut.  I will be selling KMI at some point, just when though is undetermined.

February:

Our only long term debts are our cars and my wife's student loans, and her loan won't last the year.  I continued this month to throw some extra money at her student loans.  If we paid her student loans at the minimum rate it would take around 2.5 years to finish otherwise.  I have already gotten ahead on my monthly payments on my car and that will not stop as well.  Her student loan should be finished as early as May or as late as September.

Next month should produce around $67 in dividends, which is a 8% YOY increase.  On the Loyal3 front I will probably invest $500 on existing and new positions.  I am trying to pump up our safety net savings a little bit on the side as well, which is the reason for the slight edging down of Loyal3 investing.

My portfolio page is currently up to date.

Hope everyone has a great February!
- Dividend Gremlin
- Long all stocks mentioned

Recent Buy #2 January, 2016

Ready For Snow Gremlin here to talk about another recent buy!  As a huge snowstorm barrels its way up the East Coast of the USA, I sit confidently in my knowledge the my Roth IRA will continue to grow and kick butt.  And that my house will stay warm and the power on, fingers crossed.  Today I added another new position to the account.  This comes after today I sold by shares in Ace Limited / Chubb Corp. (CB) after they reached the limit I wanted.  I sold approximately 7.2 shares of CB for $111.15 each.  This capital combined with extra I had saved up and received from the prior ACE / CB action allowed me to make this purchase.  My prior CB purchase has been an overwhelmingly successful one in that it has spawned two positions for the price of one.  Honestly, I had hoped to hold CB for a long time, but I will roll with the punches and it does not hurt to get some Gremlin-style multiplication.

Anyways, today I added shares of Discover Financial Services (DFS).  I bought 26 shares at $48.55 / share, plus a $6.95 commission.  The current P/E* ratio is approximately 9.99 and yield is 2.29% (on current cost).  Looking at past dividend payouts, DFS has managed a 5 year DGR of 62.2% while keeping an approximate payout ratio of 21.2%.  DFS has a five (5) year history of dividend growth, and sports Tweed and Chowder factors of 59.3 and 70.4, respectively.  This purchase adds $29.12 to my forward 12-month dividend income.

DFS represents only my third Financial sector stock across all accounts.  That sector, along with Industrial and Healthcare, is one that I am very interested in building.  DFS operates in similar fashion to Visa (V), MasterCard (MA), and American Express (AXP).  As the world continues to modernize and banking becomes more decentralized, we will see these companies become more important.  These act as pass through money pipelines (damn you KMI!), though the streams of finance and customers are more numerous and stronger.  Plus they do not deal directly with commodity prices.  The complex web these companies serve is astounding.  Also DFS provides some of the best credit card services; many of my friends and family use the DFS credit cards because they are simply known for providing some of the best benefits.  So it is nice to know that they get and keep customers due to excellent products.

I like also DFS because of their low payout ratio and potential for growth.  The payout ratio has been low for several years, sitting currently at just about 20%!  Of those companies mentioned above only AXP and DFS are the most generously valued at the moment, with DFS currently being 21% below its 52 week high.  Another interesting fact is that DFS carries very little debt compared to other companies their size.  They are not worried about default or running in the red like some unnamed pipeline companies clearly were of late.

DFS does have risks of course, all companies do.  The most glaring was that in 2008 the dividend was cut by two thirds (2/3).  It was maintained the same until 2010, when it began getting raised again.  It appears leadership has either changed their mentality or ways.  Times certainly have changed since the last financial disaster, and it appears that DFS has put themselves on a successful track.  I look forward to riding this wave, and am confident it will be a nice ride.

What do you think of DFS?

I will update my portfolio page at the end of the month.  Enjoy the snow and stay safe, East Coast!

- Gremlin
- Long KMI (sadly) and newly long DFS

* This reflects trailing P/E unless noted.

Recent Buy #1, January 2016

Cold Weather Gremlin here to talk about a recent buy, and the weather of course!  This Friday is supposed to be the first winter storm of the season that the DC area receives.  For those of you unfamiliar with the DC area, suffice it to know that it does not take much to bring this area to its knees, and we are looking at potentially 12 inches (30.5cm) or more of snow.  I don't know what kind of winter you want or like, but I want to see snowmen, snowball fights, stuff closed down, and a general winter wonderland + outdoor hockey.  In fact, I am super pumped to the point of being 'hype' for this upcoming storm.  Anyway, aside from the storm I have some more good news.  I made a recent purchase in my Roth IRA.

Chubb Corp (CB) was recently acquired by ACE Insurance LTD (ACE).  As part of the deal I gained approximately 7.2 shares of "new" CB ticker that represents ACE stateside and around $750 for the deal.  That deal finally closed in my brokerage account today, and lucky for me its another one of those days were stocks are taking a serious beating.  I cannot thank the proverbial worry warts, Cautious Caleb's, and Negative Nancy's enough for a sweet buying opportunity.  After all, I intend to hold my purchases for a long time, perhaps forever.  In fact, I believe this will be the first of two to three purchases in my Roth this month as I will liquidate the remaining CB shares due to foreign tax implications in what is supposed to be my post-tax account.  So let's get on with it now, what did I buy?

Today I added shares of Ameriprise Financial, Inc. (AMP).  Side note, AMP is probably one of the coolest tickers out there, especially if you like music or work with electricity.  I bought 13 shares at $90.02 / share, plus a $6.95 commission.  The current P/E ratio is approximately 10.44 and yield is 2.97% (on current cost).  Looking at past dividend payouts, AMP has managed a 5 year DGR of 31.7% while keeping an approximate payout ratio of 31%.  AMP has an eleven (11) year history of dividend growth, and sports Tweed and Chowder factors of 19.8 and 32.1, respectively.  This purchase adds $34.84 to my forward 12-month dividend income.

It will be easy to sleep well at night with this stock.  On top of those nice numbers above, scanning the recent news you can see they are working hard to improve shareholder value in their brand.  AMP has authorized an additional, $2.5 billion in share repurchases; that is really nice, increasing my share value and potentially allowing for great dividend growth in the future.  It is doubly nice because as it states those are extra buybacks, so the theme is not a one off event.  I also see that it is ranked in the top places to work for the 10th year running; perfect I want my shares to hire the best talent to do the best job at really making these shares succeed.

This purchase was a tough one to make because I did not know if it was going to be my first buy or my last one with this influx of capital.  It was pushed to the front of the line because it just seems to be a grand value, buying a stock of such quality at this price.  I like the industry it is in too.  It is money with the purpose of making people more money with their money.  In a wealthy nation, or 'first world economy' it is easy to see the historic precedent that wealth begets wealth much faster.  It is similar to the snowball concept, or in board games like Monopoly* the idea being that once you have achieved a certain base of resources it allows for stockpiling and expansion of income generating resources at a theoretically exponential level.  Anyways enough science and history, here's to some new passive income and more to come.

What do you think of AMP?

I will update my portfolio page at the end of the month, keep enjoying winter everyone!

- Gremlin
- Long CB and newly long AMP.

*I would prefer to reference games such as Splendor, Agricola, or Dominion; however the point is made with the better known Monopoly.

Loyal3 Buys January, 2016

New Year Gremlin here again to talk about how I've been improving my portfolio via Loyal3.  Over the past two years I have been using Loyal3 as a low cost way to start a bunch of positions in stocks I intend on keeping for a long time.  I am not always getting the best deal, but I usually am getting a decent one.  Using cost averaging and knowing I have a long time frame allows me to invest perhaps with more freedom than people who desire instant returns.  This month I put a solid amount of our "disposable income" into new income generating stocks, instead of doing something cool with it.  So, let's see how I did!

Company	Ticker	$ Invested	Shares Purchased	Annual Income Added
Apple	AAPL	$201	2.0106	$4.18
Dunkin Brands	DNKN	$100	2.4691	$2.62
Hershey's	HSY	$90	1.0464	$2.44
McDonald's	MCD	$115	0.9822	$3.50
VF Corp.	VFC	$50	0.8817	$1.30
Totals		$556		$14.04

A total of $556 was put to work, a decrease of 4.95% from last month when I added $585.  It adds $14.04 of annual income to my 12-month forward outlook.  It is perfectly find that my total invested decreased, because I have been adding more money to my Roth account in anticipation of some nice large moves.  In terms of valuations, AAPL is probably the best value.  All of the others are a little richly valued, but I am confident that all of the positions will be long term generators.

This month has a seen a lot of drops in price.  Using paid dividends and fresh capital I added to positions that I thought were approaching a nice value.  AAPL in particular has been beaten down of late, so I added to that position though I had been done with adding to it for a long time.  DNKN and MCD are decently valued, but I see a lot long term potential on them - specifically if we are heading for a recession.  Those kind of stocks do surprising well in economic downturns as MCD has shown repeatedly.  DNKN is a newcomer to the dividend scene, but I hope high hopes for it for similar reasons (in addition to their nice balance sheet).  HSY and VFC are approaching reasonable valuations, which may not do as well in a recession.  Still, I see great value and balance sheets across the board and like dipping my toes in their waters.

There are about a few other stocks I like that Loyal3 offers.  I do plan on acquiring them if they fairly valued or better in the time I plan to use Loyal3 to build positions for my standard account.  I may add one new position here next month, pending prices.

- Gremlin
- Long all stocks

December, 2015 Review / January, 2016 Preview

Winter Gremlin here to talk about December.  Oddly I am still on the road right now for work.  It is truly weird, but due to the nature of the project I am on I am back on the road.  This particular project is a technical nightmare, however the work is mandated to continue (regardless of the pace of progress).  I hope to have some changes in my life shortly.  There are variety of ways this may happen, and I am pursuing a better situation that gets me home faster during the majority of weekdays.  In the mean time, I am have been documenting my portfolio's dividend performance and increases.  So let's see how I did for last month.

December:

I was able to put $585 to work in Loyal3 over the course of last month, so that was a good start. I also initiated a new position in Eaton Corp. (ETN) by purchasing 24 shares. 

Last month I brought in a total of $101.34 in dividends ($73.41 taxable , $27.93 Roth).  This is an increase from last year ($78.11 total) by 29.79%.  This is the first month I earned more that $100!  I am simply very excited by this news. 

In terms of dividend increases, I realized three this month; McDonald's (MCD), Microsoft (MSFT), and VF Corp. (VFC). Each was above 4%, with MCD being the lowest at 4.7%.  I find this growth to be the best kind, as it happens with no extra effort or investment on my part.

Next month I will realize 1 dividend increase: Realty Income (O).  The increase is 0.26%, but O often has quarterly increases of its monthly payout.  In addition, it has had years where it provided more than 4 increases (including last year).  O is probably one of my favorite stocks; these increases are totally predictable and the company is very stable.

January:

Our only long term debts are our cars and my wife's student loans, and her loan won't last the year.  I have already gotten ahead on my monthly payments on my car and that will not stop as well.  Her student loan should be finished as early as May or as late as September.

Next month should produce around $71 in dividends, which is a 2% year-over-year increase.  On the Loyal3 front I will probably invest $500-550 on existing locations, with the goal being to push up next year's forward income.

My portfolio page is currently up to date.

Hope everyone has a happy new year!
- Dividend Gremlin
- Long all stocks mentioned