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!

Dividend income - May 2015

May was a quite month.
It was just AT&T who paid me their dividends, but it sure is a nice amount.

AT&T's yield is amongst the highest dividend yielding Aristocrats with their amazing 5.43%.
I'm still very happy to have them in my portfolio.

T $22.56

Total dividends received in 2015: $95.09

As we are closing the first half of 2015 in just about a month, it will be tough to reach my $300 annual dividend goal, but I'm still positive. We have to have confidence in the snowball to grow fast enough!

Thanks for reading.

Evaluation of the portfolio

The first anniversary of this blog is just a couple of weeks away!
In the past 11 months I've bought 9 high quality stocks.

During my first year as a Dividend Growth Investor, I tried to focus on dividend yield. As this yield generates money to buy more stocks. However, I'm here for the long run. This means growth is a huge factor in growing the snowball.

That's why I created the table below to evaluate the balance between yield and growth.
It is available at the second tab of my portfolio page.

As you can see, most of my high yield (3%+) stocks, don't have extraordinary growth numbers. It would be amazing if I could average the growth numbers to double digits, while maintaining the 3% yield as well.

While I don't think aiming for double digit growth should be a goal itself, I do think it would be a good idea to focus on growth during my second year of investing.

To prove there are great companies out there with double digit growth numbers, I've extended my watchlist. It now features both yield and 3-yr DGR numbers. In addition to this, I've marked some great companies like DOV, MMM, TROW, HP and ADM in bold. This means these companies have double digit growth numbers in the DGR-5, DGR-3 and DGR-1 categories.

Have a great weekend!

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

Dividend income & dividend raise!

April was not the most lucrative month of all times, but every penny helps.

Dividend income

KO paid me $13.53 for the 41 stocks I own.

In order to achieve the annual $300 of dividends, I should have received $100 by now.
Unfortunately the sum of received dividends is stuck at $75.91.
However, 15% tax is already deducted from the $75.91, so the gross amount of dividends is around $89. I'm not sure whether I meant gross or net when I set the $300 goal..

Being behind schedule gives me motivation to research new investment oppertunities, so expect to see more information on that, as soon as possible!

Dividend raise

My nice friends over at Johnson & Johnson (JNJ) decided to give me a 7.1% raise!
I'm wondering why I'm working so hard at the office. They provided me with a 0% raise, last January. On the other hand, in order to obtain this 7.1% raise, I did absolutely nothing.
Do you see a pattern here? :-)

JNJ raised their quarterly dividend from $0.70 to $0.75.

Thanks for reading!

Dividend Income - March 2015

March was a good month for me. Five of the seven companies I'm invested in, were paying their dividends this month.

JNJ $11.20
TGT $14.56
AFL $7.41
CVX $10.70
MCD $9.35

Total: $53.22

This brings the total dividends received in 2015 at $65.82.
Looking at my goal to receive $300 in dividends by the end of the year, this number is not sufficient.

It means I have to do more research in order to find more investment opportunities. The sooner the snowball grows, the faster it will be running down..

Happy Easter all!

Thanks for reading.

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.