Recent buy - September 2015

Looking at my current holdings, we see a reasonable balanced breakdown of sectors I'm invested in.

Those who are familiar with the sectors used in David Fish' CCC list, might miss 2 sectors.
You are right! I am not yet invested in any company related to the Materials or Utilities sector.

Keeping my portfolio diversified is one of my main goals. This is why I was specifically looking for opportunities in these sectors. However, I did not find many great looking quality stocks here. During my research I came across ALB, SYT and CMP as potential purchases, but they didn't make the cut for different reasons. If theres anyone who might have a good suggestion, please let me know down below.

The next best thing was adding a position to either Information Tech, Energy or Industry.
This is where I found Caterpillar.

Caterpillar Inc (CAT)
Buy 12 shares @ $73.75 at 9/8/2015

Caterpillar is a huge company that manufactures mining and heavy industrial equipment. It is founded in 1930 and has grown to be the largest company in their business.

Most of their segments, like mining, energy & transportation and resource industries are depended on natural resources. This is why their profits are not steadily growing, but making pretty big swings instead. In Q2 2015 they suffered a 13% decline in revenues, compared to Q2 2014, as indicated by the comparison below.

Source: CAT Q2 2015 earnings release

Growth
The company has been raising their dividends for 22 consecutive years.

Their growth over the years has been amazing. As with many other companies, I wish I knew about this company about 25 years ago. If you would have invested $1,000 in CAT at 8/31/1990, it would have been worth $13,823 right now. (source)
Of course, this is just hypothetical, as people probably did not have the ability to for see the future, back in 1990.

However, recent growth numbers are still double digits.

DGR-1, 11.1%
DGR-3, 13.0%
DGR-5, 9.1%

Yield & competitors
The yield of 4.03% is well above the sector average of 2.06% (all industry contenders).

Valuation
With a payout ratio of almost 53%, the payout of future dividends should be maintainable.
With a forward P/E of just 13.11, it sure looks like we get some value for money.

The Coca Cola Company (KO)
Buy 1 share @ $38.76 at 9/8/2015

This is an addition to my existing holding, because I had a little bit of money left in my account.
KO goes ex dividend tomorrow.

What do you think of these purchases?

Thanks for reading!

Recent buy - July 2015 (2)

Recently, I put some fresh capital to work!

Kinder Morgan Inc.
Buy 19 shares @ $34.79 at 7/25/2015

Kinder Morgan Inc is the fourth largest energy company in the US.
They transport and store petroleum on a very large scale.

From an investor point of view, this is one of the few non-Aristocrats I added to the portfolio.
Their current dividend increasing streak is only 4 years, but according to David Fish' CCC list, they are a former Contender.

We have seen recent declines in all Energy related stocks.
CVX, down 16% since I bought it, last September.
HP, down 45% in the same period.
XOM, down 20%.

This does not worry me at all.
We cannot time the market and we have to treat it as opportunities to average down.
I will definitely try to do so with CVX, if their decline continues.

On the bright side: my yield on cost on this KMI purchase starts at an amazing 5.52%.
Theres more good news, as KMI could transfer and store other products as well. For example natural gas. This should maintain a very nice income stream in the future.

DGR-1, 9%
DGR-3, 31.9%
DGR-5, n/a

The yield of 5.00% is below the sector average of 5.45%, but I'd take a 5% yield any day.

What do you think of this purchase?

Thanks for reading!

Recent buy - July 2015

Recently, I put some fresh capital to work!
Here's a short breakdown of the purchases I made.

T. RowePrice (TROW)
Buy 12 shares @ $76.44 at 7/6/2015

T. RowePrice is a global investment management firm.
They manage US and international stocks, mutual funds, blended assets and bonds.

Main reason for buying this stock is their strong growth over the last decade.
The Great Recession obviously has hurt the stock price, but their funamentals never changed.

Despite the recession, even the 10-year growth numbers are double digits!
DGR-1, 15.8%
DGR-3, 12.4%
DGR-5, 12.0%
DGR-10, 16.6%

These numbers beat 20 of the 21 Financials in the CCC Aristocrat list. Pretty amazing if you'd ask me.

The yield of 2.68% is below the sector average of 3.16%, but with these growth numbers, I'm not worried at all.

Looking at the valuation of TROW, the numbers are looking very nice.
EPS - $4.46
Payout ratio - 46.64%
P/E - 17.43

This high EPS combined with a low payout ratio and a low P/E leads me to believe that the stock is currently undervalued. Theres definitely enough room for future growth. I'm new to valuating stocks, so I don't know what a fair price would be, but I am studying this subject.

Qualcomm (QCOM)
Buy 13 shares @ $62.81 at 7/6/2015

If you own a non Apple smartphone, the heart of your phone is probably manufactured by QCOM.
Their Snapdragon processor is widely used in the current generation of smartphones.

Qualcomm is my first holding in the Information Tech sector.
I'm not a huge fan of Facebook, because there is no product to sell. As with MySpace, Facebook could be worth nothing in a matter of a couple of years. Same goes for Twitter.
Apple seems to be overvalued to me. Will we keep buying an iPhone every 2 years until they release iPhone 27? I'm not sure.

I do think smartphones and other smart products are here to stay, so buying QCOM makes perfectly sense, despite not liking Apple so much from an investor point of view.

As with TROW, QCOM has some impressive growth numbers.
DGR-1, 23.8%
DGR-3, 24.5%
DGR-5, 19.2%
DGR-10, 21.7%

These numbers beat all the other 17 stocks in this sector for the Contenders section!
This amazing deal comes with a 3.07% dividend yield, which is above average.

EPS - $4.22
Payout ratio - 45.50%
P/E - 14.84

With these numbers, there should be more than enough capital to sustain current dividend payouts as well as a lot of money to be used to growth the relative new company. They have been raising their dividends for 13 consecutive years.

AT&T (T)
Buy 1 share @ $35.57 at 7/6/2015

After buying TROW and QCOM I had about $40 left in my account.
My broker does not support buying fractial shares yet, so I added 1 share of AT&T to my portfolio, as they went ex-dividend at the 8th of July.

What do you think of these purchases?

Thanks for reading!

Recent buy - June 2015

Omega Healthcare Investors (OHI)
Buy: 33 shares @ 35.49 at 6/4/2015

Recently, many investors picked up some shares of OHI.
Although this should not mean you should buy it as well, it did trigger me to dig some deeper.

Omega Healthcare Investors is a Real Estate Investment Trust, a REIT.
While reading DGI blogs I have seen the term REIT regularly, but I had no idea what it was. The only things I knew were: high yield, high payout ratio and pretty risky if you compare it to regular Dividend Aristocrats which produce tangable products, like MCD, JNJ & KO.

Fortunately I came across the official website about REITs, www.reit.com. They provided a very solid, basic explanation. If you're not familiar with REITs, I suggest you read this website carefully.

After reading that, I concluded REITs could be a great addition to my portfolio, but I don't want too many of them. It is very good for diversification though. So, let's get into the interesting parameters of this REIT.

DGI stats

The attrictiveness of the stock was immediately clear when I took a look at the amazing 6.00% yield. They usually raise their dividends every quarter and they have been doing so for the last 11 quarters. With several raises per year, the snowball grows even faster!

Talking about growth, their DGR numbers are looking very good as well. The DGR-3 is 9.2% and the DGR-5 is even at 11.0%. Those are fantastic numbers if you combine them with the high yield.

Because REITs usually have a huge amount of depreciation on their statement, metrics like P/E and EPS are not very useful. Instead, we determine the valuation of a REIT by their price per funds from operations, or P/FFO. The lower the better. The P/FFO of OHI is 12.45, which is a very attractive value.

Last, the stock value took a hit over the last couple of months. The decline from the 52-week high value of $45.46 (which occurred in January) down to my entry point of $35.49 is roughly 22%. As you probably know, price is just a number, but this is another valid reason for current shareholders to average down.

Looking forward

Looking forward I think there is a lot of potential growth for the Healthcare sector.
Technically REITs are financial products, but as OHI invests in Healthcare facilities I think their profit highly depends on that sector as well.

I think this picture says it all.

Disclosure: Long MCD, JNJ, KO & OHI

Thanks for reading!

Recent buy - May

Procter & Gamble (PG)
Buy: 13 shares @ 80.30

Before I started this blog, I never heard of Procter & Gamble.
It is a huge American company, but they do not operate with that name in Europe.

However, many of their companies are very well known through all of Europe. For example: Oral B, Gilette, Pampers, BrAun, Head & Shoulders and Duracell.

So what about the interesting numbers?

Dividend yield: 3.33%
3yr growth rate: 7.2%
5yr growth rate: 8.0%
P/E: 23.59

Besides these numbers, they have been raising their dividend for 59 years in a row!

The growth rates could have been better, but this yield is pretty decent for a Dividend Aristocrat like PG.

This adds $34.47 to my annual dividend income.
My portfolio has been updated accordingly.

Thanks for reading!


Disclosure: Long PG

New investment oppertunity

Looking at my watch list there are currently 12 stocks trading close to their 52-week low figure. This month, I'm trying to add a stock in the Industry sector, as I do not own any stock in this sector yet.

There are a few possibilities I'd like to discuss with you!

3M Company (MMM)

3M is a huge manufacturer of a wide range of industrial products. From Post-Its to petcare, this company owns a large number of well known brands. They have been raising their dividends for 57 years in a row! That sure sounds like music to my ears.

The only disadvantage: it currently trades close to their 52-week high value.

Illenois Tool Works (ITW)

ITW is another global manufacturer of industrial products. They operate in segments like Automotive, Food Equipment & Construction Products. The company has been raising their dividends for 40 years in a row. Not too shabby!

Deere & company (DE)

Founded in 1837, this company sure knows how to design and manufacture farm equipment. It is the largest agriculture machinery company in the world. Although they announced to lay off 600 of their employees in the US due to less demand of their products, I'm pretty confident they will find other ways in upcoming markets to increase their revenue.

They have been raising their dividends for 11 years in a row.

Textainer Group Holdings Inc (TGH)

Textainer is a freight company managing containers. They sell, manage and lease containers to various shipping lines. With over 2 million containers in their fleet, this is one of the largest companies at their segment.

During Q3 and Q4 in 2014 the stock went down from $40 to $28. As it is currently trading at $29, this should provide a very nice entry point.

They have been raiding their dividends for 8 years in a row.

General Electric (GE)

General Electric is a diversified technology and financial services company. It serves customers in more than 100 countries. Their products and services range from power generation, water processing to medical imaging. The company has shown a steady growth over the last few years, but their 5 year growth number is very low. Despite the short 5 year streak of dividend raising, they have been paying dividends for 40 years now.

This is another stock that's trading close to its 52-week low number.

Stock stats

All of these companies look like solid investments to me, but when we compare some growth and yield stats, there are huge differences.

I'm definitely looking for double digit growth numbers, so ITW will not be the winner here.
Do you have any thoughts?

Thanks for reading.

Recent sell - TICC

Back in July I did a small investing experiment.
Despite all the alarms around this company, I bought a few stocks of a company called TICC.
Main reason for this was: I had not enough capital left to buy a blue chip stock, but the 12% dividend also looked very attractive.

This extremely high yield obviously has its reasons. The stock has been declining ever since I bought it.

Bought it at $9.80 and I sold half a year later for $7.44.
Total dividend paid: $1.16. Net result: -$1.20.

Lessons learned: don't invest in companies with extremely high dividend yield. Not even when they have more than 10 years of dividend paying history.

Despite the loss, this lesson seems to be much more valuable than this single dollar.

Have you had any risky operations going?

Thanks for reading!

Recent buy - January

Chevron  (CVX)
Buy: 10 shares @ 107.73

With the low price of crude oil, this was an obvious purchase. Thanks for all the advices in the comments. It's much appreciated!

Thanks for reading!


Disclosure: Long CVX

Recent buy - August

Despite the fact I had to buy a new bike, I'm happy to announce a recent buy.

My job is asking a lot of my attention, so that's why I haven't been very actively blogging recently.
Hopefully I'm able to blog more in the near future, as I love to be part of this great community.


McDonald's (MCD)
Buy: 11 shares @ 94.77

This stock is in many portfolio's for a reason.
They increased their dividend for 39 years in a row and this year is no different.

Thanks for reading!


Disclosure: Long MCD

Recent buy - July

At my last post I did some research about a couple of blue chip stocks which are currently trading close to their 52w-low figure. Some of my readers gave me valuable advice, which is much appreciated!

Getting so much kind words and good advice from fellow bloggers is great to notice and I have to say this feels like a warm welcome in this very kind community, as I am just the little new guy in town.

Aflac (AFL)
Buy: 19 shares @ $63.02

My broker is very cheap with their transaction costs (about $1 per transaction), but the interface is very basic. Another downside is that it does not allow fractional stocks to be purchased. After last month purchases I had about €80 in my account as leftovers. After todays purchases I had about $25 in my brokerage account which was not working for me. This bothered me.

In order to put this money to work for me, I wanted to invest it in some company with a high yield. However, the price for this stock should be as low as possible, since I only had a few bucks left. It was then when I came across a handy website for this matter: DiviData.

At this site, I came across a company called TICC. This was the highest yielding company with more than 10 years of dividend paying history. This stock certainly does not belong in a portfolio focused on long term and growth, but I couldn't resist buying 2 shares at an amazing 11.92% yield. After just 2 terms of dividend from this company, the transaction costs will be covered. I'm probably going to sell this stock shortly after that, in order to use this capital to buy a new blue-chip stock, which I couldn't afford this month.

TICC Capital Corp. (TICC)
Buy: 2 shares @ $9.80

In other news, my watchlist is growing.
I added 52w high/low values to the list, in order to try to find a bargain.
However, this was not easy readable, so I added a percentage. This percentages reflects the growth of the stock, compared to its 52w low value. Hopefully this makes selecting stocks for further analyses a bit easier for me.

Thanks for reading!

Full disclosure: Long AFL

Recent buy - June

My very first dividend yielding stocks are bought!

These are the stocks that I felt were worth my money.
You will find my short motivation below.

Please feel free to comment, as I'm very excited about this first step to financial independance.

• Coca Cola company (KO)

Dividend growing for an amazing 53 years. Very stable stock price, but has shown a steady growth over the last decade. Combine this with their nearly 3% yield and a 3-year DGR of 8.37% and this should be a great champion to start my portfolio with.

• AT&T (T)

One of the few IT related dividend champions in the list. This company originated in 1875, right after Bell invented the phone itself. Despite its age, the company succeeded to bring innovations decade after decade. Their 5.19% yield is huge, as it is amongst the top 4 of the dividend champions list, in this category. However the 3-year DGR of 2.33% is small.

Despite my focus to growth rather than high yield, I think this high yielding company is a safe stock to own.

• Johnson & Johnson (JNJ)

Life care will always be important. Johnson & Johnson provides millions of people with their medical supplies. I could not find any reason why this stock is risky or not worth anyones money. Their stats back me up fortunately. With an average yield of 2.3% and a 3-year DGR of just over 7% I think this is a great low risk addition to my portfolio.

• Target Corp (TGT)

Due to several problems this company has had, its stock price has shown a large downfall over the last couple of months. However, I'm confident that their new CEO will be able to solve these problems over time. Some experts are warning us for rough times ahead, but as always, we can't believe all rumors. Besides that, stocks in a DGI portfolio should be measured over the long run, not over the next months or two.


The company has a current yield of 3.0% and a top 3-year DGR of 23.44%, which makes Target the #1 of the entire Champions list, in this category. Given the price and these stats, I couldn't find a better stock to start my DGI career with.



My total portfolio could be viewed here.

Full disclosure: Long KO, T, JNJ & TGT