Tuesday, August 15, 2017

Recent Buy, August 2017

Rained Out Gremlin here.  It has been a strong summer.  My wife and I moved, I was a best man in a wedding, we had a mini family reunion, and on and on.  The new house is mostly set up, but it feels like there is always something to do.  As a new homeowner, yes we bought a house, it feels like there is no time to slow down.

Perhaps that is why, now more than ever, I view each dollar I make passively as getting some of my time back.  I figure for every $25 made passively, it is as if I have worked one extra hour.  Thus, at some point those extra bucks will become the main bucks, and I will be able to sleep in with no one stopping me.  Therefore in the back of my mind, I make a tally of how many extra hours that my money has worked for me.  So to keep the train rolling, I made another dividend growth investment.

Today, I added to a position by purchasing shares of Archer Daniel's Midland (ADM) in my taxable account.  I bought 30 shares, with a total cost of $1263.95 ($41.90 / share, plus commission).  The current yield is 3.10%.  The P/E ratio for ADM sits today at approximately 17.74, trailing.  This is better than the historical 5 year average for the stock with the average yield being 2.38% and the average P/E being just under 17.84.  ADM boasts a trailing payout ratio of approximately 53%.  ADM has 42 years of dividend growth and is a member of the Dividend Champions.  This purchase will add $38.40 to my 12-month forward income.

I already have ADM in my IRA, where I hold 70 shares that I purchased for a similar valuation back in September of 2016.  It was a monstrous amount of buys that I made with my transferred 401k funds from old job.  With this purchase I finally have 100 shares of a DGI stock in my portfolio.  If I want, options are literally now on the table.

So ADM, what do you do?  Well here is a description in their words:

"Archer Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the firm owns an extensive network of logistical assets to store and transport crops around the globe. The company's end products include vegetable oil and meal, corn sweeteners, flour, feed ingredients, and ethanol."

I like that description.  It is simple and understandable.  The need for food products, oils, sweeteners, and similar foodstuffs will not likely go down.  It is possible the products could become cheaper, but the demand should always be present - pending any worldwide catastrophic events.  As someone who likes to cook a lot, I recognize that these items are so essential.  Even more necessary, but often misunderstood, is the food transport, distribution, and warehouse network.  I work near train tracks where daily ADM rail cars come by as part of larger trains.  This infrastructure takes a long time to build and is cost prohibitive.  This framework has an intrinsic value that is difficult to quantify, but is impossible to deny.

I will update my portfolio page at the end of the month.  Stronger 2017!

What do you think of ADM? 

- Gremlin
- Long ADM

Wednesday, August 2, 2017

July Review / August Preview, 2017

Let Me Dress for the Weather Gremlin here to talk about July and August.  It has not been the hottest July on record, which is very nice.  I took two trips out of the area.  One for a mini family reunion over a weekend, and another to Las Vegas to work.  I am ever the cautious investor, I did not even step foot into a casino.  Sure gambling can be fun, but its not fun to do it by yourself (as I said business trip), nor is it fun to lose money in such vast quantities as the average person does in Vegas.  Also no interest in their shows, especially since the town I live in is already part circus.

On serious note, my wife and I closed on a house.  We will be moving in shortly, and as everyone knows - moving sucks (ask all of my friends who owe me for helping them move, its their turn).  I digress, the fact is our 'rent' is now going to be headed towards equity, which is a nice change.  My wife's commute should stay the same.  I will be on a new train line, though farther out - it is more direct. Overall buying a house is smart in the long term, however it is stressful.  For some reason it is less stress inducing than buying a car, until you see that final number on your mortgage...


This month I added one new position to my Roth account, J.M. Smucker's (SJM).

Last month I brought in a total of $73.19 in dividends ($72.19 taxable, $0.00 Roth, and $0.00 IRA).  This is an decrease from last year ($84.98 total) by 14%. The decrease is mainly related to KHC switching their payout month.

In terms of dividend increases, I realized one from this month from Realty Income (O).  The raise was around 0.2%.  Thus far for 2017, I have realized 30 dividend increases!

Next month I will realize two raises from Discover Financial (DFS) and Omega Healthcare Investors (OHI).  The increases are 16.8% and 1.5%, respectively.


Within the last week my wife and I bought a house.  I have stated it earlier that this would happen, and sometimes things move faster than plans, so here we are.  Our debts for the first time, since practically ever, outstrip our assets.  However, I am not selling stocks to pay for it all.  Rather it is time to double down - blast debt and buy assets. 

I have cash on hand to add a new position, but I might not depending on how moving goes.

Next month should produce around $250 in dividends, which is a 160% YOY increase.

My portfolio page is currently up to date.

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