Wednesday, September 28, 2016

Recent Buys Part 2, Sept. 2016

Relaxed Gremlin here to talk about some more recent buys.  Before I get started, let it be known that the reason I am relaxed is because I did a good number on one of my ankles recently, I won't be moving at a pace faster than a hop for a little while.  So, after much deliberation and thinking I have decided to keep all of my old 401K as pre-tax money.  I view my future retirement as something best dealt with by attacking from multiple angles, akin to a Hydra.  The cool thing is that one day my other retirement accounts will need to be dumped, and they will have a home waiting for them.  So let's get to it, what did I buy and why?  For starters these are definitely different companies than I bought in my last round a little over a week ago.  They are strong, but as I said different.

First I added shares of Westlake Chemical Corp. (WLK), which is a new position in my IRA account, and it is my first Basic Materials sector stock.  I bought 25 shares, with commission.  The current yield is 1.50% (on current cost).  I like WLK a lot, they have been aggressive in expansion and done a nice job at growing the dividend over the past few years with a growth streak of 13 years.  They have low P/E and payout ratios compared to the rest of the industry, 12.3 and 18% respectively.  These are excellent numbers.  To build on that they just acquired rival Axiall.  From what I read about them I see they have good leadership, an eye on growth and they exist in a boring - but needed - industry.  Here is a brief description from them:

"Westlake Chemical Corp was founded in 1986. It is a manufacturer and marketer of basic chemicals, vinyls, polymers and fabricated products. The Company's products include some of the chemicals, which are fundamental to many diverse consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, residential and commercial construction as well as other durable and non-durable goods. The Company operates in two principal business segments, Olefins and Vinyls, and it is one of the few North American integrated producers of vinyls with downstream integration into polyvinyl chloride, or PVC, fabricated products."

Second I added shares of CVS Health Corp (CVS), which is a new position in my IRA account (note they will be classified as Healthcare in terms of sector, because that is their largest segment).  I bought 25 shares, with commission.  The current yield is 1.90% (on current cost).  The P/E ratio is just around fair to slightly high at 20, but the payout ratio on the yield is a sweet 35%.  CVS needs a lot less of an introduction, though it should be said it has paid dividends at an increasing rate for 13 years too.  CVS is almost on as many street corners as Starbucks these days.  They also just inked a huge deal to manage and run Target's (TGT) in store pharmacy.

What I like most about CVS is just that, their pharmacy department.  The amount, type, and reliance on certain types of medicine seems to only be trending in one direction, and that is higher.  Few others are poised to do this at the capacity of CVS (though RiteAid and Walgreens certainly can).  In addition, that income is augmented by strong retail and consumer staples sales.  What is even crazier is how much room they have to grow and it does not even touch the amount of sales growth that their division of TGT pharmacies can bring to the table.

All in all, both buys are not going to be golden eggs layers today, but they may be tomorrow.  They also represent growth in the face of economic downturn.  After all both increased their payouts during the recent recession.

What do you think of WLK and CVS?

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

- Gremlin
- Long WLK, CVS, and TGT
- Fuller disclosure, my first part time job was at a CVS many years ago.

Monday, September 19, 2016

Recent Buys, Sept. 2016

Retirement Gremlin here to talk about some recent buys.  In the last few months I switched jobs, which freed up my old 401k money, which was promptly deposited into a new IRA with my broker.  I am contemplating moving some of the money to my Roth IRA via the backdoor conversion process, but a big slice of the money was going to be invested right away.  So last week I watched the market like a hawk, especially since it seems to be in a weird mood where it goes up on one day and down on the next.  No point in timing the market, but if a few dollars can be saved up front that will work.  If every dollar can be stretched out to provide a few more pennies, well then that could add up to a significant long term amount of money.  So just be aware these purchases were all made when stocks were generally trending downward for that day.

Anyways, there will be no individual listing about these stocks that now comprise the core of my new IRA.  These are all stalwarts; of the six stock purchases I made five are Dividend Champions and the other one is a Contender.  Some of them do share sectors, but none of them entirely share industries (though their is crossover).  Of the six, three are generally viewed as industrial.  The others are one in each of these spaces - consumer staples, healthcare, and telecommunications.  Enough blabbering here are the stocks purchased.

Thanks to My Dividend Pipeline for the idea of using screenshots for posting buys; I like it for big moves.
As you can see these are all big players in their respective industries.  My goal is to make this a very strong defensive account that will be ready and waiting for future 401k capture.  As noted above a decent amount of money is still available in this account.  The question becomes do I move it to my Roth after a time or invest it right away.  For now what is most important is knowing that my retirement is in my hands exclusively - and that is a freedom that is totally worth it.

Thanks for reading,
Long all stocks above.

Friday, September 2, 2016

August Review / September Preview, 2016

Getting back to business Gremlin here.  So this past month I started a new job.  One that I already know will have a measure of interest significantly greater than my last job.  It will involve some travel, in fact I've already been out on one trip to Kansas City, but not the life robbing travel I had before.  Also the money is way better, which is the key thing.  This month somewhat normal investing and debt squashing activities will resume.  Next month those will be ratcheted up in intensity.  No I did not build a gaggle of wealth in my 20s, but I am going to make up for that right now.


I bought no new stock of any sort, but much financial reading was done.

Last month I brought in a total of $95.21 in dividends ($36.50 taxable, $58.71 Roth).  This is an increase from last year ($67.45 total) by 41.6%.  The march forward is truly accelerating.

In terms of dividend increases, I realized one this month from from Discover Financial (DFS), which was really cool because I expected to have none.  The raise was around 7%. 

Next month I will realize four dividend increases.  They will be from Hershey's (HSY), Kellogg's (K), Realty Income (O), and Target (TGT).  The increases range from around 1% to above 7%. Thus far for 2016, I have realized 21 dividend increases.  Boom.


Things are about to get exciting.  To start, sometime between October and November I will clear out my wife's student loans.  Since last December (when I first looked into this) we have plowed $7.2k into her debt and now just $1.25k remains.  Its a drop in the damn bucket.  This reinforces my belief, along with my extra salary that my car can be paid off by the end of next year.  On top of that more money coming in means more investing.  Its exciting times to be sure.

Next month should produce around $114 in dividends, which is a 43% YOY increase.  I will almost have made as much already as I did last year.  On top of that due to my work change I have some extra retirement money to play with; my 401k is being migrated as we speak to a new Sep IRA with my broker.  That is about $31k, and once that comes online my dividends overall will rocket up (though I will not count them towards my goals until next year).  .

My portfolio page is currently up to date.

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