Monday, September 24, 2018

How Many Stocks, Is Too Many Stocks?

Phone-a-friend Gremlin here to discuss my portfolio size.  There have been numerous articles posted on websites as to how big a portfolio should be, along with talking heads on TV stating that X number of stocks should be the maximum.  Some people on the internet claim that a portfolio of five (5) stocks is sufficient to make one diversified.  Others state 10, 15, or 20 as their numbers.  These hosts include professionals and amateur internet enthusiasts who are all about making wise long term OR extremely speculative short term investments.  My answer is, that their advice is best for themselves, but it is dated.

Currently my portfolio contains 58 stock positions across my taxable, Roth, and IRA accounts.  They run the gambit of industries, with multiple names in most sectors.  It is as if I am building my own personal index fund, which pays me a higher yield than an index.  Portfolio management is minimal, I rarely sell a stock, and my expected holding period is for as long as possible.  Considering my view point, versus that of others, why am I happy to hold many positions?

My answer is threefold.  First, the elephant in the room that modern professional advisers try to brush off is the internet.  The fact is I could have 200 stocks in my portfolio, and as long as I keep my apps on my phone up to date, I would never miss a news piece, dividend issuance or anything else (if I chose to be that plugged in).  The press release happens and within minutes the notice hits my email.  This was not possible 20 years ago.  So to borrow a phrase from a large investment adviser, I don't need anybody to 'make sense of investing' for me.  I can do it faster than they can, reading the same things that most of them do (sure some in high finance have special access, but the information gap small and closing all the time).  So tracking my 58 positions is pretty easy.

Second, I don't chase momentum or yield.  Those kind of plays require constant attention, tracking daily changes even, or risky bets on companies that are always dancing near a cliff.  By focusing on quality stocks that will maintain or increase their dividends with or above inflation, I eliminate the need to buy and sell (aka feed the brokerage).  So having a bigger portfolio does not increase my handling of it all, unlike some more streamlined portfolios that aggressive chase returns upfront.

Third, and most important to me, is that I memorize stuff rather quickly.  So when I research a company I can quickly understand what they do.  After that I can analyze if the company would be a good investment for me at the moment.  For a long time many educators (I know a lot of people are in teaching...) told me that memorization is not as powerful of a skill as understanding and critical thinking.  I find that argument to be a fool's errand, as they are each powerful in their own right for different things.  Specifically, by memorizing facts I can create short cuts - in terms of finding and accessing the right information.  It also helps me track a company over time, as a stock is easier to track the more familiar you are with it.  Knowledge is cumulative, so the

So in the end, how big should a portfolio be?  My answer is as big as you want it to.  Sure not every stock will be a home run, but home runs aren't the only way to score points.  Consistency is the key to making my portfolio become my personal index fund, which reports to me.

- Gremlin

Friday, September 14, 2018

Recent Buy Part 2, September 2018

Back to back to back Gremlin here to discuss another buy.  Over the past three months, including September, I have managed a buy in my taxable account each month.  This is pushing up my taxable dividend income at a rate that is more rapid than ever before.  This is thanks to three things: a special dividend from DPS merger with Keurig to KDP, the fact my brokerage is moving to E*Trade so my partial shares were all sold, dividends accrued, and the fact that my wife returned to work (which means we are back to being a two income household again).  I am unsure if this rate of growth can be sustained as eliminating debt payments might supersede equity growth priorites.  Additionally, my wife is only paid 11 months of the year.  Still, the rate of growth gives me a lot of confidence that I can get our passive income to a place I want it to be sooner rather than later.

Today, I added to a new position by purchasing shares of Cardinal Health (CAH) in my taxable account.  I bought 20 shares, with a total cost of $1,069.35 ($53.12 / share, plus commission).  The current yield is 3.6%. For a detailed summary of their history, etc. please visit: CAH's Seeking Alpha Profile.

CAH is a major distributor of medical goods, especially pharmaceuticals; I will borrow the Seeking Alpha description:

"Cardinal Health, Inc. engages in the provision of pharmaceutical and medical products. It operates through the Pharmaceutical and Medical segments. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products in the United States. The Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. The company was founded by Robert D. Walter in 1971 and is headquartered in Dublin, OH. "

CAH has been battered this year.  One horrible quarter coupled with intense political / public pressure on their industry (due to opioids) and the Amazon (AMZN) scare are definitely the biggest causes, but not the only reasons.  They operate in a thin margin industry, but it is one of an long term oligopoly.  The distribution industry is something that takes time to build.  Its low margins means those thinking about joining the industry, such as AMZN, would probably look to other parts of that food chain for better margins (they did buy an online pharmacy).  For this reason, along with the long term trends of better availability and necessity of medications, it is clear that CAH and the industry will be around for a long time competing primarily among themsevles.

That is the 800 lb gorilla in the room.  CAH also sports a comfortable payout ratio and still has a steady Medical segment arm.  This gives me exposure to multiple sides of the healthcare sector, which is always appreciated.

This purchase will add around $38 to my forward 12 month dividend income.

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

What do you think of CAH?

- Gremlin
- Long CAH, KDP

Thursday, September 6, 2018

Recent Buy, September 2018

Grab Your Popcorn Gremlin here to discuss my most recent buy.  Also why the popcorn?  Well tonight the NFL season starts.  Though I am not the biggest or best fan by any means, my team is still coming off their first championship win and they start the season tonight.  So go Eagles!  This should be a good season, though if past experience serves my memory right they will probably tank.  Almost no one has their division in back to back years, though I want to see myself proven wrong.

Otherwise, I added to my Roth account today.  I have been mostly neglecting my Roth account due to our former single income set up, and because my focus is now heavily on the taxable income positions that I want to build.  Still today is my Roth's day.

Today, I added to a new position by purchasing shares of Broadcom Inc (AVGO) in my Roth account.  I bought shares, with a total cost of $1,091.04 ($216.82 / share, includes commission).  The current yield is 2.29%. For a detailed summary of their history, etc. please visit: AVGO's Seeking Alpha Profile.

AVGO is a major producer of semiconductors and other technological components; I will borrow the Seeking Alpha description:

"Broadcom, Inc., is a holding company, which engages in the design, development and supply of analog and digital semiconductor connectivity solutions. It serves four primary end markets: wired infrastructure, wireless communications, enterprise storage and industrial & other. Its products include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays. In April, 2018, Broadcom redomiciled from Singapore to the United States. The company was founded in 1961 and is headquartered in San Jose, CA. "

AVGO has been growing its dividend at a massive clip for the last 8 years.  In addition, the payout ratio is super low and the stock is clearly undervalued at this point.  However, what is most exciting is that they are a direct supplier to something that will definitely only become more important over time - technology.  I already own MSFT and AAPL, but this perspective is one of the physical needs that drive technology production and efforts.  Sure having a smartphone is a necessity for life, but it is clear that people find it harder and harder to separate themselves from technology.  I try to get away from it all the time, but it is nearly impossible to avoid it - even when you work hard to do that.  So in the meantime AVGO and similar companies will make the chips and materials that feed the tech beast.

This purchase will add $35 to my forward 12 month dividend income.

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

What do you think of AVGO?

- Gremlin
- Long AVGO, AAPL, MSFT

Thursday, August 30, 2018

August Review / September Preview, 2018

Back to school Gremlin here to talk about this month and the next.  The end of this month coincides with the tortured 1 income timeline ending.  My wife is just now finding out that working and being a parent at the same time is just as exhausting (or more so) as being at home full time is with the baby - something she clearly never wanted to hear from me.  However, all the work and tired eyes are not in vain.  Her income will allow us to take on financial independence in a way we have not been able to for a long time.  Though honestly, she doesn't care about this stuff as much as I do...  So how did we do last month?
August:

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

Last month I brought in a total of $281.30 in dividends ($69.00 taxable, $64.30 Roth, and $148.00 IRA).  This is an increase from last year (239.61 total) by 17.4%.

In terms of dividend increases, I realized* three raises from Bank of Montreal (BMO), Starbucks (SBUX), and John Deere (DE).  The increases are from 3% to about 20%.  I have now realized 37 raises thus far this year.

Next month I will realize six raises from Hershey's (HSY), Kellogg's (K), Target (TGT), Discover (DFS), J.M. Smuckers (SJM), and Westlake Chemical (WLK).  The increases are from about 4% to about 19%.

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

September:

The mortgage continues, so at least part of our 'rent' counts towards our house. 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).  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 (for now) With a second income, investments and debt will be crushed!

August was family beach time, and I am now slightly tanner because of it (that tan should last 10 more minutes).  Back to school means everything picks up in the near term as the new routine starts.  Soon my accounts will begin to transition from Capital One to E-Trade, which won't change anything for investments.  My next purchase should be in September, potentially two of them.  I am looking to make a buy every month from here on out for 2018.

Next month should produce around $400 in dividends, which is a 25% YOY increase. It will be close, but if I break $400 it will be the first time ever.

My portfolio page is currently up to date.

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

Monday, August 20, 2018

Recent Buy, August 2018

Tan(ner) Gremlin here to discuss a recent buy.  I just got back from the beach, and I was hit by the general realization that everyone returning from vacation faces - that they would prefer to stay on vacation.  That is the goal here, to build this passive income stream so one day I can make every day a free day.  Part of building that income stream is purchasing quality dividend stocks.  Today I added one that has long been in my cross hairs, but is rarely mentioned in other places...

Today, I added to a new position by purchasing shares of Eastman Chemical (EMN) in my taxable account.  I bought 12 shares, with a total cost of $1,189.80 ($98.578 / share, includes commission).  The current yield is 2.29%. For a detailed summary of their history, etc. please visit: EMN's Seeking Alpha Profile (for the record my time is getting more limited by the day, thanks to having a kid, so I am cutting out this section and giving a general view, I do read multiple websites, this just seems to be one of the more accessible ones).

EMN is a major producer of chemicals; I will borrow the Seeking Alpha description:

"Eastman Chemical Co. engages in the provision of specialty chemicals. It operates through the following segments: Additives and Functional Products; Advanced Materials; Chemical Intermediates; and Fibers. The Additives and Functional Products segment includes chemicals for products in the transportation, consumables, building and construction, animal nutrition, crop protection, energy, personal and home care, and other markets. The Advanced Materials segment produces and markets its polymers, films, and plastics with differentiated performance properties for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The Chemical Intermediates segment consists of large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support operating segments with advantaged cost positions. The Fiber segment offers cellulose acetate tow for use in filtration media, primarily cigarette filters. The company was founded by George Eastman in 1918 and is headquartered in Kingsport, TN."

EMN is the kind of company I love because of their super small payout ratio and massive earning potential.  The dividend is only 8 years old, growing at around a 10% clip, and their is tons of head space.  They provide products that are constantly in demand, and the barrier to entry is really high.  In addition, EMN has excellent geographic distribution, which means they can meet demand as it ebbs and flows in parts of the world in smooth fashion - relying less on middlemen.

I have eyed this company for a long time.  It, along with my position in Westlake (WLK), should stand to be in demand for the foreseeable future.  They make products that plenty of people use, but few want to be in the business of making.  The industry is capital intensive, but through conservative leadership they have both created strong financial positions.

This purchase will add $26.88 to my forward 12 month dividend income.  Part of the funding for this came from the sale of partial shares in my brokerage account.  Capital One's brokerage arm is being purchased by ETrade, so my stock quantities are getting cleaned up into nice round numbers.

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

What do you think of EMN? 

- Gremlin
- Long EMN and WLK

Thursday, August 2, 2018

July Review / August Preview, 2018

Beach Gremlin here to talk about July and ponder about August.  Its that time of year again, beach time - to be fair I did not get any beach time in last year.  In a few days I head off to a warm sunny place to catch up on work inside, get some long runs in, cook a few huge dinners, and maybe get some sand around my feet (I can work from anywhere so I save time off when I can for use when I really need / want it).  Life will take on a huge new flavor this month as my wife returns to work.  I know she is in some ways ready, but in many ways it is hard to leave your child for any extended period of time.  At least her job will keep her close to him, and he will be with family.

In addition, we will no longer just have 1 income.  This means that debt will be slashed faster, savings will rebound, and investments will be made.  The remainder of this year will be strong.

July:

This month I made one new purchase, acquiring shares of Kraft Heinz (KHC) in my taxable portfolio.

Last month I brought in a total of $81.72 in dividends ($62.22 taxable, $9.50 Roth, and $10.00 IRA).  This is an increase from last year (73.19 total) by 11.6%.

In terms of dividend increases, I realized* two raises from Realty Income (O) and Leggett & Platt (LEG).  The increases are 0.2% to about 5%, respectively.  I have now realized 34 raises thus far this year.

Next month I will realize three raises from Bank of Montreal (BMO), Starbucks (SBUX), and John Deere (DE).  The increases are from 3% to about 20%.

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

August:

The mortgage continues, so at least part of our 'rent' counts towards our house. 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).  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 (for now).

August has family beach time.  I will be semi working while at the beach as to preserve some of my paid time off.  Likely my next buy will be in August too as my accounts will begin to transition from Capital One to E-Trade, which means my fractional shares will be sold.  That capital along with existing funds should allow me to make some more purchases.  Its fine by me, since I prefer round numbers anyway!

Next month should produce around $269 in dividends, which is a 12% YOY increase.

My portfolio page is currently up to date.

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

Tuesday, July 17, 2018

Recent Buy, July 2018

Reunion Gremlin here to talk about a recent buy.  Over the weekend was family reunion time, which is always fun and exciting.  Sure it requires a good bit of driving, but its important to see people you care about - even more so when they are scattered about the globe.  Before we left on this journey I added to an existing stock position.  This was partly fueled by the merger of Dr Pepper Snapple (DPS - formerly) with Keurig to form Keurig Dr Pepper (KDP).  I will continue to hold my new shares of KDP, I do think there is value in the combined company.  Now to the proceeds, what did I buy with them?

Last week, I added to an existing position by purchasing shares of Kraft Heinz Corp. (KHC) in my taxable account.  I bought 17 shares, with a total cost of $1,087.81 ($63.58 / share, plus commission).  The current yield is 3.88%

This purchase nicely rounds out this position, and is in addition to KHC shares I hold in my Roth account.  I am not going to rehash the fundamentals of this stock as it is an existing position.  However, it is in an industry that will always be in demand - food.  Sure they are a little bit of an aged giant, but they have the ability to add newer products and acquire new brands.  I suspect that KHC, and its competitors, will continue to gobble up smaller / healthier products until each has its own respectable portfolio of these items.  Each added product might not move the needle on its own, but collectively I suspect companies will be seeing ever higher profits in the long run as trends continue.

This purchase will add $42.5 to my forward 12 month dividend income.

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

What do you think of KHC? 

- Gremlin
- Long KHC and KDP

Monday, July 2, 2018

June Review / July Preview, 2018

Beach Bod Gremlin here to talk about June and look towards July.  June in someways was, thankfully, a lazy month with a few plan-less weekends and only 1 trip (to a wedding).  It was nice to slow down a little and enjoy some quiet time.  The baby continues to grow rapidly, and he will soon be mostly mobile - a scary thought for the uninitiated.  Meanwhile the World Cup marches on, and it has been full of some awesome upsets.  Its great to watch new teams win, makes the whole thing more exciting when none of your teams remain.

July should an interesting month.  We have the 4th of July, a family reunion, and a week of dog sitting in the cards.  Sadly, it won't out perform June in dividends...

June:

This month I made no new stock purchases.

Last month I brought in a total of $384.54 in dividends ($157.37 taxable, $84.31 Roth, and $142.85 IRA).  This is an increase from last year ($298.63 total) by 28.7%. This is my biggest month ever, just edging out last March.

In terms of dividend increases, I realized* 5 raises from Pepsico (PEP), Sonoco (SON), Unilever (UL), Johnson and Johnson (JNJ), and Exxon Mobil (XOM).  The increases range from 5% to about 15% (mostly around 5-7%).  I have now realized 32 raises thus far this year.

Next month I will realize two raises from Realty Income (O) and Leggett & Platt (LEG).  The increases are 0.2% to about 5%, respectively.

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

July:

The mortgage continues, so at least part of our 'rent' counts towards our house. 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).  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 (for now).

July has a small family reunion, which should be an interesting time, otherwise I am hoping for a little bit of boredom - its nice to unwind sometimes.

My next buy will occur after the closure of the Dr Pepper Snapple (DPS ) - Keurig / Green Mountain merger - July 5th - which is nice.

Next month should produce around $82 in dividends, which is a 12% YOY increase.

My portfolio page is currently up to date.

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

Tuesday, June 26, 2018

Gremlin's Asset Review - 2018

Bookkeeping Gremlin here to discuss my net-worth.  I first made this type of post a year ago, because its my birth month so I might as well see how current me compares to newborn me (financially).  This is something I like to do on annual basis to help me gauge what kind of progress we are making towards financial independence.  This report honestly is the not best I have ever had, but there are glimmers all over the place and it will not take decades to correct the issues that remain on my personal balance sheet.

Debts:

Debt sucks, period.  Most people accept debt as normal and expected, but that is crap.  Still, I have debt though, and am working on crushing it.  So here goes:

Car #1* (my car): $7,198 (maturity: 6/2021, $250 / mo.) interest = 1.9% ($2831 reduction from last year)
Car #2 (her car): $12,585 18,044.33 (maturity: 10/2020, $475 / mo.) interest = 1.5% ($5459 reduction from last year)

Mortgage: $329,855 ($2100 / month, 30 year, 4% interest)
Family Cash: $30,000 - a family obligation 0%, no timetable (help received purchasing our house)
Revolving debt / credit cards: No balances carried or maintained, used as debit cards with credit points.
Total monthly debt payments = $2825
Total debt: $379,638

Currently, we pay my wife's car in exact amounts, and I pay a little extra on my car and our house.  I count our house exclusively as a debt.  Could it be an asset? Yes, but at the moment its a little more important than that.

* - I almost sold my car, but due to work family and obligations, doing so would be a real problem.

Income:

My wife took the end of last year off to spend time with the baby, and will head back to work at the end of this summer.  Last year our total income was approximately $110,000 before taxes.  This year our expected income is closer to $94,000.  Her return to work, coupled with a very conscious effort on my part to cut expenses should help me to eliminate debt and make purchases of stock.

Expected income (2018):
My main job: $80,000
Wife: $14,000
My side gigs: $1,000
Total: $95,000

Looking forward to the second half of this year is a very pleasant thought.  Our income will balloon, savings will grow, and we will focus extra cash on more stock.  Additionally, I will like to dispose of one of my car loans.

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 investment accounts:

Taxable Invested Assets: $39,775
Roth IRA: $20,078
Traditional IRA: $38,468
401K: $19,305
Wife's Retirement / Pension: $15,416
Total = $133,042 ($32,195 total growth)

At the beginning of 2015 the total stood at $47,000.  At the end of 2015 it was $54,000, and at the end of 2016 it was $87,000.  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 $100,000, so time to double down.  It is my goal to make this number hit $145,000 by end 2018.

Total Net Worth = (-$246,596)

Goals:

Last year I wanted to increase my income and investments, and decrease non-housing debt.  That was a success.  So I want to now lay down concrete debt related goals to reach before my next birthday.
1 - Begin retiring some of my family debt.
2 - Eliminate a car payment.
3 - Networth approaching or above $-230k.

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 is to achieve financial independence in a meaningful way - that independence would then be leveraged to pursue work and life goals that my current 9-5 does not give me time the time to chase.

- How is your net-worth coming along?  Buy a house recently?
- Gremlin

Wednesday, June 13, 2018

Gremlin's 2018 Soccer Call...

Sports Gremlin here, been a while since I've been around, but I have time for a quick visit.  Where has the time gone?  Seems it was just yesterday I was watching Germany win a World Cup, Portugal a Euro, and watching the US Men's team flame out in spectacular fashion - sigh.  That is just soccer, there have been tons of other sports, life, investing, and other moments which have come and gone.  Now the next World Cup is upon us all, so comes time for a quick review.

This year I will not be making any calls.  Last time, the teams seemed a bit more straight forward in terms of who was dangerous, who will play well below their means, who were the powerhouses, etc.  The field this year is much more level than years past.  The usual heavy weights - Germany and Brazil are here to play.  France, England, Spain, and Argentina are all there too, who along with Uruguay round out the past winners.  Italy did not even make the field!  Those are the 'traditional' powerhouses.  Of them, Brazil looks like it will struggle, Spain fired its coach a day before kick off, the German Machine's cogs are getting a little older, and Argentina's stars are even older than the cogs.  France has some amazing players, but they seem to also have huge egos that might beat them before the step on the field.  England looks to be in great form, however it seems this always happen right up until they blow it.  Uruguay has not been dangerous since 2010.

Then there are the dangerous teams no one wants to play - Egypt (looking at you Salah), Iceland (they create goals from nothing), Belgium, Denmark, Senegal*, Poland*, Colombia*, etc.  The presence of one of these teams can easily knockout one of the traditional powers, and most groups feature at least 3 legitimate contenders.  * - all in the same group

So enough kicking the dirt on this.  I think there are several likely outcomes:

1 - Russia makes it through the 1st round.  Russia, the host, is not highly rated, but only one host ever, South Africa, did not advance beyond the opening round.  I think that will trend will continue.
2 - Something stupid happens with a crowd.  Soccer fans are just prone to this, and I speak from first hand experience.  That being said those crowds are in Russia, so its like mixing an acid and base.  My call here is that the games should look pretty good on TV.
3 - France, Germany, England, and Brazil are the favorites.  I would guess one of them wins, but also likely is that a new team wins this year.  I would add Poland, Colombia, and Belgium to the likely final 8 teams (pending bracket shake out).
4 - Enjoy the game.  This is my favorite sporting event.  The field is wide open (dammit USA), and it should be a great spectacle.

Will you watch?  Is there someone you want to see win... or lose?

- Gremlin
- going to go Long Germany on this one...

Thursday, May 31, 2018

May Review / June Preview, 2018

Tired Gremlin here to talk about May and peer forward into June.  Kids make you tired, that is a straight fact, if you're not tired you should own stock in Starbucks (SBUX) or Dunkin Donuts (DNKN).  Between work, home, hobbies, and everything else that fills the air it was nice to recently have a long weekend.  I've heard it said people cannot catch up on sleep, but that doesn't mean we won't try.

Looking past rainy and busy May, June is a big month.  My favorite sporting event starts- the World Cup.  Its my birthday - a bittersweet reminder that I am not 23 anymore.  The weather has finally gotten nice, minus the rain, so its high time to spend more moments outside.

May:

This month I made one purchase, adding shares of Kimberly-Clark Corp. (KMB) in my IRA account.

Last month I brought in a total of $267.98 in dividends ($57.07 taxable, $62.91 Roth, and $148.00 IRA).  This is an increase from last year ($246.08 total) by 8.9%.

In terms of dividend increases, I realized* 4 raises from the Gap (GPS), Ameriprise Financial (AMP), Kinder Morgan (KMI), and General Dynamics (KMI).  The increases ranged from5% to about 60%.  This includes KMI coming back to life.  I have now realized 27 raises thus far this year.

Next month I will realize five raises from the Pepsico (PEP), Sonoco (SON), Unilever (UL), Johnson and Johnson (JNJ), and Exxon Mobil (XOM).  The increases range from 5% to about 15% (mostly around 5-7%).

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

June:

The mortgage continues, so at least part of our 'rent' counts towards our house. 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).  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 (for now).

June has 1 wedding on the calendar and the start of the World Cup.  Between the World Cup and my annual net-worth review, I should have more updates than usual.

My next buy will occur after the closure of the Dr Pepper Snapple (DPS ) - Keurig / Green Mountain merger (should be this month).

Next month should produce around $372 in dividends, which is a 24% YOY increase.

My portfolio page is currently up to date.

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

Thursday, May 10, 2018

Recent Buy, May 2018

Pollen Gremlin here to chat about a new buy.  Its spring and that means pollen is in the air, so allergy meds are in my system.  Its the biggest downside of nice weather, and the main reason spring ranks as my least favorite season.  In between sneezes its been a busy time here.  I also just completed another short bit of work travel and there is a laundry list of things that need to get done at home.  It will be nice in the future when baby Gremlin finally can help out with some of those - especially the sneeze inducing ones.  In particular his job list will include dusting, as it is the singular chore I despise above all others.  Anyways, what did I buy?

A few days ago, I added a new position by purchasing shares of Kimberly-Clark Corp (KMB) in my IRA account.  I bought 10 shares, with a total cost of $1,039.57 ($103.26 / share, plus commission).  The current yield is 3.83%.  The P/E ratio for KMB sits today at approximately 16.19, trailing.  The yield is slightly above the 5 year average of 3.4%, and P/E is well below its average of the past 5 years (28.35).  KMB has a trailing payout ratio of approximately 58% (it seems be reported between 55 and 65%, with some stating 77% - likely a skew from taxes at the end of 2017).  KMB is a dividend champion, having paid increasing dividends now for 46 years.  Its long term average dividend raise is around 7%, however recent increases tend to be between 4 and 6% - with the most recent being just above 3%.

What does KMB do in their own words:

Kimberly-Clark is a leading manufacturer of personal care (around half of sales) and tissue products (roughly one third of sales). Its portfolio of brands includes Huggies, Pull-Ups, Kotex, Depends, Kleenex, and Cottonelle, among others. The firm also operates K-C Professional, which partners with businesses to provide safety and sanitary products for the workplace. Kimberly-Clark generates slightly north of half its sales in North America and more than 10% in Europe, with the rest primarily concentrated in Asia and Latin America.

KMB is a $36B company, which produces a bunch of consumer staples.  Consumer staple stocks have been beat up of late, they are not new or cool.  There is no fast or flashy money to be made.  That being said, KMB is surely feeling the squeeze other old consumer stocks are - new organic / hypoallergenic (among other things) products, lower price points of generic breads, and less millennial brand recognition.  At least that is the drum that is beaten today about these types of companies - neglecting their general role in those things (lots of store brands are tied to branded items - either in manufacturing or materials) and their general ability to buy up newer / smaller competition.  Companies like KMB are starting to get hard to ignore at these levels.

This purchase will add $40 to my forward 12 month dividend income.

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

What do you think of KMB? 

- Gremlin
- Long KMB

Monday, April 30, 2018

April Review / May Preview, 2018

Busy Gremlin here to talk about how my investments performed in April, and what is expected of May.  April was a very solid month for my investments; while many of my coworkers and friends lamented the roll coaster in the stock market, I just smiled and kept collecting cash. I also smile when any jest is made about how inexpensive my lunches are (never really break $1.50 cost except for rare occasion) and that through my bike and the train my commute is free.  Small savings and side cash, are a formula for success.

April also had some work travel for me.  I am not the biggest fan of work travel, as I have done a lot of it over the years and it can be a drag, however I do try to take advantage to save extra cash and see something new.  Last month as part of my travel I wedged in a brewery visit.

April:

This month I made one purchase, buying shares in the Royal Bank of Canada (RY), while selling legacy holdings Pengrowth Energy (PGH) and Willamette Valley Vineyards (WVVI).

Last month I brought in a total of $74.85 in dividends ($65.85 taxable, $9 Roth, and $0 IRA).  This is an increase from last year ($70.94 total) by 5.5%.

In terms of dividend increases, I realized* 5 raises from the Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), Coca-Cola (KO), Realty Income, and Walmart.  The increases ranged from 0.2% to about 5.5%.  I have now realized 23 raises thus far this year.

Next month I will realize four raises from the Gap (GPS), Ameriprise Financial (AMP), Kinder Morgan (KMI), and General Dynamics (KMI).  The increases range from 5% to about 60%. For the record KMI raised their dividend 60%, which is clawing back from the 75% cut they had in early 2016.

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

May:

The mortgage continues, so at least part of our 'rent' counts towards our house. 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).  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

Hopefully May is a quiet month, but I would not hold my breath.  Nothing gets quiet, slows down, or goes exactly according to plan when you have a baby.  That being said, none of those concerns are a bad thing!

I should have a buy in my IRA, but I might old off until June depending on the market prices and closure of the Dr Pepper Snapple (DPS ) - Keurig / Green Mountain merger.  In addition, I will likely write a quick historical analysis relating the stock market, business cycles, and historical revolutions.  If that sounds weird to read, it felt weirder to type, but it will all wind itself together in a rational sense.

Next month should produce around $270 in dividends, which is a 9.5% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great March.
- Dividend Gremlin
- Long all stock tickers mentioned (except PGH and WVVI)

Thursday, April 26, 2018

Brewery Review, April 2018

Beer Gremlin here to conduct a brief brewery review.  Recently I had to travel for work, which is not the most desirable thing in my opinion.  The trips are short, the free time is minimal, and I am away from my family.  However, while I am out I might as well make the most of the situation.  After all, it is a slight break from the norm and my expenses are essentially covered, so the little extra freedom is I use to my advantage.

For this trip I was in Kansas City.  While there I popped into the new (2-3 month old) brewery called Casual Animal, close to the heart of the town.  I tried a total of six (out of nine) different drinks before heading straight to bed.  The six were their lager, honey ale, wit style, Belgian spiced ale, the double IPA, and the brown ale, which I will discuss briefly.

Cutting to the chase with the three light beers; they were alright.  A little light on flavor for my taste, but I think they would make excellent choices in the summertime.  Of them the wit was my favorite, and the honey ale was the one I thought could use more kick.

The darker drinks I found more to my liking.  The brown was nice, but needed some extra malt to really pull the flavor through.  The two winners, hands down, were the double IPA and the Belgian spiced ale.  The IPA was not too bitter, still had a solid hop crispness to it, and packed a ton of juicy flavor.  If you like IPAs that are not just a cyclone of bitterness and you live in Kansas City - that is your move right there.  The Belgian was strongly spiced, now I know that can rub some the wrong way, but its something I like.  It reminds me of the darker Belgian styles, something to really get you ready for the fall.

Casual Animal is new on the scene; having worked in a brewery I realize there are kinks to sort out, but they are starting out with strong promise.  They had a lot of variety, and its clear they have done well on a wide variety of styles.

Have you been there, had any favorites lately?

- Gremlin
- Full disclosure, I like all styles of beer though my favorites in no particular order are pale ales, Belgian style spiced beers (dubbels, trippels), sour beers, IPAs, German style lagers, hefeweizens, and creamy stouts.  So really I do like them all, though some are much better seasonally.

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