Saturday, April 25, 2015

Weekly Roundup - April 25, 2015

It's been a pretty great week.  I've been off of work, a little bittersweet since no work means less income, but I'm so glad that I've been off.  I got home a week ago Thursday and Luke was not doing all that well and was extremely swollen.  Like worse than Will Smith's character in Hitch when he had the allergic reaction.  But they finally figured out a combination of things to get rid of some of his swelling.  Between a week ago Thursday and this past Thursday he's lost about 1.4 kg.  That's about 3 lbs of fluid.  Luckily Luke has done well since I've been home.  He's still got a long ways to go before we'll even be discussing a discharge date but he's slowly making progress.

Unfortunately I made no purchases for my portfolio this past week but I do have some open limit orders right now on some excellent companies.  One company that I'm pretty excited about it Ross Stores, Inc. but I'm not 100% sure how the upcoming stock split will work.  Ross Stores' stock split had an "ex-dividend" date of 4/22/15 but the split won't take effect until 6/11/15.  I've honestly never paid attention to stock splits before and whether they were announced as stock dividends or not.  So if anyone has a better idea of how the stock split will work I'd appreciate it very much.  I'm not ready to buy shares yet because the valuation isn't where I feel comfortable purchasing shares but I'm definitely not going to buy shares if it means I don't get to participate in the 2:1 split.

Thursday, April 23, 2015

Dividend Growth Investing at Work: Johnson & Johnson (JNJ) Gives Owners a 7.1% Increase

Quick update today as I sit at the hospital with Luke! But it's one that I love, especially since Luke is doing better than last week.

I love hearing about dividend increases.  Like absolutely love them.  There's few things that I like more than getting paid extra just for owning quality companies.  This morning Johnson & Johnson announced they were increasing the dividend payout from $0.70 to $0.75.  That's a very solid 7.1% increase and the current yield is now right around 3.00%.  Since I own 50.213 shares of JNJ this will increase my forward 12-month dividends by $10.04.  I don't own nearly enough shares of JNJ and will be looking to add some more shares to my portfolio because I really want to increase my exposure to the health care industry.

The best part about the increase is that I didn't have to do one bit of research and development, or sales, or marketing.  All I had to do was have the foresight to invest some of my savings in an excellent company.  That's dividend growth investing at work!

Since I own 50.213 shares of JNJ this will increase my forward 12-month dividends by $10.04.  Since my portfolio's yield is 2.97% that's like I just invested another $338 in capital.  But I didn't have to because one of the companies I own decided to pay me more.  That's how you can eventually reach the crossover point where your dividends received exceed your expenses.

Johnson & Johnson was my third holding to announce a dividend increase this month and I expect at least another three and possibly five to announce increases.  Two of my holdings have given multiple smaller increases throughout the year but since they are in the oil and gas industry increases might be delayed.

My FI Portfolio's forward 12-month dividends are now at $5,595.64 and including my Loyal3 Portfolio's dividends of $55.48 brings my total forward dividends to $5,651.12.

Wednesday, April 22, 2015

Shopping for Bargains with TJX Companies, Inc. - Dividend Stock Analysis

Last week I analyzed Ross Stores, Inc. (NASDAQ:ROST) (Full Analysis Here) and today I wanted to take a closer look at their competitor, TJX Companies, Inc. (NYSE:TJX). TJX Companies is an excellent company that sells clothes and home goods at discounts of 20-60% below department store prices. TJX Companies is a dividend contender with 18 consecutive years of dividend growth and a 10 year growth rate of 22.5% per year. TJX closed trading on Monday, April 20th at $65.97 giving a current yield of 1.27%.

The following tables/graphs are from my personal stock analysis spreadsheet. Data for the stock analysis was acquired from TJX Companies, Inc.'s investor relations page, Morningstar, and Yahoo Finance.

Historic Growth Rates:

Historically, owners of TJX Companies have done very well. According to longrundata.com, TJX has rewarded investors with a total return of 638% or 20.4% annualized over the last 10 years. Looking at the historic growth rates for per share dividends, earnings, revenue, and free cash flow paints a solid historical basis.

You can read the full analysis of TJX Companies, Inc. on Seeking Alpha.

Monday, April 20, 2015

This Too Shall Pass: Investment in the Integrated Oil Majors

There's been plenty written already about the decline in oil prices over the last 9 months or so. The per barrel price of oil has declined from $98.70 in June 2014 to $51.77 as of Friday's close. That's a 47.5% decline from the peak last year. This has caused plenty of investors to worry about the viability of the oil and gas sector for investment. Exploration and production companies have announced declines in capital expenditures around 15% and there's a high likelihood of more to come.

We haven't begun to really see the effect on earnings for the integrated majors yet, but will start to see the results later this month when both ExxonMobil (XOM) and Chevron (CVX) report Q1 earnings. For the integrated oil and gas majors this isn't the first decline in oil prices that they've had to navigate through.

Oil, like most commodities, is a rather cyclical beast. In 2002 we saw a cyclical trough that brought the price of oil down to $15.89. The subsequent peak in 2008 saw the price of oil increase to $128.08. The Great Recession brought about another trough in 2009 which saw prices of $34.14 and the last peak was in 2011 at $108.80. Per barrel oil prices are sourced from the U.S. Energy Information Administration website which be found here.

Sunday, April 19, 2015

Weekly Roundup - April 19, 2015

Well the schedule for work was short-lived because the rig ended up getting dropped.  But that doesn't mean I won't have any work coming up I just don't know where it will be just yet.  With the price of oil starting to trend higher it could lead to much more stable times on the work side of life which will be very welcomed.

It's hard to have both the work and family side of life being chaotic and the good news is that Luke has started getting a bit better with his fluid balance.  It had gotten really bad and out of control during the week but on Friday he finally had a day where he was net negative.  Thank goodness!  I think it's been at least a month since that's happened.  His fluid balance was so bad this past week that he had gained over 1 kg in just a week.  All fluid.  That's not good but hopefully we're moving in the right direction again.

Thursday, April 16, 2015

Dividend Growth Investing at Work: Kinder Morgan, Inc. (KMI) Increases the Dividend to $0.48

Quick update today! But it's one that I love.

I love hearing about dividend increases.  Like absolutely love them.  There's few things that I like more than getting paid extra just for owning quality companies.  Yesterday, Kinder Morgan, Inc. announced earnings that missed analyst estimates for earnings per share by $0.01 with revenue coming up short by about $950 M.  But the big news of the day was that they announced yet another increase to the dividend.  I expected them to continue the trend of small quarterly increases that end up being excellent growth year over year, but management surprised me with a $0.03 increase from $0.45 to $0.48.  That's 6.7%!  And the best part is that I had to do nothing for this raise.  I didn't have to help them lay down new pipeline or do maintenance on any of it.  All I had to do was have the foresight to invest some of my savings in an excellent company.  That's dividend growth investing at work!

This increased my forward dividends by $26.22 per year.  Since my portfolio's yield is 3.05% that's like I just invested another $859.57 in capital.  But I didn't have to because one of the companies I own decided to pay me more.  That's how you can eventually reach the crossover point where your dividends received exceed your expenses.

My FI Portfolio's forward 12-month dividends are now at $5,580.31 and including my Loyal3 Portfolio's dividends of $55.48 brings my total forward dividends to $5,635.80.

Wednesday, April 15, 2015

Bargain Hunting with Ross Stores, Inc.

I'm always on the lookout for excellent companies with a long growth trends in front of them. Ross Stores, Inc. (NASDAQ:ROST) fits that bill but are the shares currently priced for perfection? Ross Stores is a discount retailer that offers consumers discounts off department store prices. Ross Stores is a dividend contender with 20 consecutive years of dividend growth with a 10-year growth rate of 23.9% per year. ROST closed trading on Tuesday, April 14th at $103.80 with a current yield of 0.91%.

The following tables/graphs are from my personal stock analysis spreadsheet. Data for the stock analysis was acquired from Ross Stores, Inc.'s investor relations page, Morningstar, and Yahoo Finance.

Historic Growth Rates:

Historically, owners of Ross Stores, Inc. have done very well. According to longrundata.com, ROST has rewarded investors with a total return of 806% or 23.2% annualized over the last 10 years. Looking at the historic growth rates for per share dividends, earnings, revenue, and free cash flow paints a solid historical basis.

You can read the full analysis of Ross Stores, Inc. over at Seeking Alpha.

Monday, April 13, 2015

Can Becton, Dickinson & Company Cure Your Portfolio?

To no one's surprise the health care industry has a long-term bullish thesis with the aging baby-boomer population advancing in age. Unfortunately, as we age we also tend to use more health care services. Becton, Dickinson and Company (NYSE:BDX) provides just about everything a hospital needs to treat its patients: needles, syringes, reagents to identify diseases and so much more. Becton, Dickinson and Company is a dividend champion with 43 consecutive years of dividend growth. BDX closed trading on Friday, April 10th at $143.21, with a current yield of 1.68%.

The following tables/graphs are from my personal stock analysis spreadsheet. Data for the stock analysis was acquired through Becton, Dickinson and Company's investor relations page, Morningstar, and Yahoo Finance.

Historic Growth Rates:

Historically, owners of Becton, Dickinson and Company have done very well. According to longrundata.com, BDX has rewarded investors with a total return of 289% or 11.22% annualized over the last 10 years. Looking at the historic growth rates for per share dividends, earnings, revenue, and free cash flow paints a solid historical basis.

You can read the full analysis of Becton, Dickinson & Company at Seeking Alpha.

Saturday, April 11, 2015

Weekly Roundup - April 11, 2015

Lots of interesting news in the work side of my life this past week.  The really great news is that I finally can have some resemblance of work/life balance.  I have a 20/10 schedule now, so I work 20 days then I'm off for 10.  This is the first time since I started this job where I can actually tell my wife, family, and friends when I'll be home other than when I've had vacation.  That's a huge plus but there's no telling how long it will last so I'll enjoy it while it does. There was also news at the start of the week that our division will be sold sometime this year to help facilitate the acquisition of Baker Hughes.  I'm not surprised by the announcement but it brings up a whole slew of questions and not many answers.  There's rumors that General Electric could be a potential buyer which is a company I wouldn't mind becoming a part of.

On top of all that Luke continues to be very up and down.  Honestly, if he could just have a stable week I would feel better.  They currently think that his fluid balance is the big issue as the pulmonary hypertension has shown slight improvement, but the problem is there's very little solutions for that given his current condition.  So we're at a waiting point right now while we try and figure out the best way to approach this.

I didn't get to do any investing this past week because of capital restraints but that doesn't mean I'm not on the look out for potential investments into excellent companies.  While I rarely sell positions I do have two in mind to potentially end my relationship with.  One shouldn't be too surprising, it's my employer Halliburton (HAL).  I'm a bit wary of selling shares at a down point in the oil and gas cycle but with capital being rather tight the thought has crossed my mind.  I currently have three different lots of shares that were purchased through the ESPP program.  Two of them are sitting on pretty heavy losses and the other is looking nice with a large gain.  Thanks to the quirky tax rules regarding ESPP's I can only logically shed some exposure to my employer with the lot that's increased in value.  I don't want to pay taxes on "income" when I've suffered a loss.  Selling a chunk of those shares could net me about $2k in proceeds to put to work in dividend growth companies.

Friday, April 10, 2015

Net Worth Update - March 2015

While cash flow is more important when it comes to financial independence, it's still good to look at the balance sheet too, which is why I provide these net worth updates.  Since more and more of my net worth is tied to the markets, there's a larger correlation between my net worth and the markets but in the long run as I continue to save and invest the net worth trend should be higher even though short term fluctuations can vary wildly.  As a dividend growth investor I'm not overly concerned with the short-term gyrations as long as the dividend stream remains in tact, but the markets' effect is noticeable.  During March my net worth increased $2,378.96.

Wednesday, April 8, 2015

Income Update - March 2015

I'm a big proponent of tracking every single penny that comes into your hands if you're really wanting to make a change to your finances.  Mental accounting is too difficult to keep track of and the mundane everyday expenses get forgotten.  Once you keep a detailed history you can see that you're really spending $400 per month on restaurants or $100 on coffee or whatever little expenses that are fine by themselves but add up quickly to destroy a budget.  This is why I like to keep track of all of my expenses to help keep myself accountable and looking to see what areas I'm just plain doing poor in.  If you want to improve your finances, then please track everything for a 3 month span and then take action to make positive changes.

Monday, April 6, 2015

How effective are those share buybacks?

Companies have a few options when it comes to creating shareholder value.  The most important is the ability to improve the underlying operations of the company through growth.  My favorite is through dividends and of course share buybacks are another option.  I want to ignore the dividends for the time being and focus on growth and share buybacks.

When a company is growing and able to buy back shares at a cheap valuation, shareholders win.  You benefit from both the underlying growth of the company and a lower share count.  That's the icing on top of the cake that can lead to out-sized returns over the long haul.   While a decreasing share count is excellent, you now own more of the same company, that's not the be all and end all when it comes to analyzing a share buyback program.

Let's take a look at one of my holdings, Visa.

Saturday, April 4, 2015

Weekly Roundup - April 4, 2015

Well I'm sure you noticed that I didn't get a lot of writing done this week.  That wasn't for a lack of "want to" but just a matter of lack of time.  Monday at the hospital with Luke, Tuesday I headed back to work, Wednesday and Thursday was work, and Friday it was back to the hospital again.  And now today I'll be at the hospital and then work.  So I was quite busy and never really got settled and "in a groove" this past week.  While I'm exhausted because I haven't been sleeping well, I would gladly stay up longer if it meant that I go to be with Luke longer.  They started him on a new drug this week that is kind of a last resort option.  It seems to possibly be helping out but he's not up to the full dose yet so we can't really tell.  If it happens to not work then the only real option is to keep him on the same path he's on and hope he can grow out of it before his pulmonary hypertension hurts him.  Pretty scary stuff.

I'm looking forward to getting some more articles written and posted as well as some stock analyses.  There's just so many great companies that I want to own that my attention keeps getting pulled in a million directions.  Sometimes I with there was at least two of me.  One to just focus on data compilation, reading, writing, and company research and another to deal with work.  But until that's possible the two will have to be one in the same.

Wednesday, April 1, 2015

Dividend Update - March 2015


It's the end of one month so it's time for my favorite update: my dividend update.  These updates reflect all dividends that I receive through my investing pursuits.  I hope they can help inspire you to take control of your own finances and invest to build a passive income stream. What you use that stream for is up to you, whether it's to fund early retirement, just provide some FI/FU money, or even to provide for an annual vacation; the key is that it can provide options and open up all sorts of possibilities. You can check my dividend income or progress page to see what dedication to an investment plan can give you.

Sunday, March 29, 2015

Weekly Roundup - March 29, 2015

Quick update this week because I've been spending a lot of time with my wife and son at the hospital.  Luke's been giving us a lot of trouble this week so I didn't have much opportunity to write.  But I've got several ideas for some posts and of course some stock analyses to write up as well.

It was a relatively quiet week for my portfolio although I did finally add some more shares of AT&T to my portfolio.  I had a small position from when I first started my FI Portfolio but just never took the opportunity to add to it.  Well that's now been solved.

The big news for my portfolio though is that Kraft and Heinz are going to be merging into a new company.  Really good news is that the company will remain public and the dividend will be kept at the rate that Kraft is currently paying out and there will be a huge $16.50 per share special dividend.  Plus it never hurts to have Warren on your side.  I only wish I owned more shares since I had just started a position in Kraft within my Loyal3 portfolio and only own 3.57 shares.  Bummer since Kraft's shares popped on the news.  For more information on the merger announcement you can check out posts here and here.

Friday, March 27, 2015

Recent Buy

Whenever I make a new purchase for my portfolio I feel it's only fair to get a post written giving all of the juicy details. I want to be as transparent as possible with my journey to reach financial independence through dividend growth investing. Being open about the moves I make allows for better discussion with all of you and helps spread ideas around as well as letting me create my own "investing journal" to chronicle why I purchased a company in the first place and that way I can revisit if something changes and make the decision on whether to continue owning the company or not.

Purchases for my FI Portfolio should slow down over the next month or two, although I still currently have enough capital for one more purchase.  Of course there's also future dividend payments coming in each month which will help to build up my capital and allow me to make regular purchases.  The great thing about having a fairly sizable portfolio already is that I can expect it to churn out over $1,300 per quarter in cold, hard cash.  I get to use that dividend stream for whatever needs I have, whether that's build up savings or capital for future investments.  That's the definition of a snowball.  It starts off slow but eventually it starts to pick up speed and just continue to churn out more and more dividends.  I'm always on the lookout for opportunities to purchase high quality companies at solid long term valuations and have a few other companies in mind for potential candidates to add to my portfolio.

Thursday, March 26, 2015

Plans for Financial Independence: Part II

Last week I wrote about my plans in regards to financial independence.  You can read that post here: Plans for Financial Independence.  We all have different priorities and needs in our lives so you can't make a direct comparison and see that you're 20+ years from financial independence and others are 1-5 years away.  Don't get discouraged in the least and just remember that you're on your own journey.

If you don't remember at the end of the post I asked you all the following questions.

(1) When do you project you will reach your crossover point?
(2) What's your plan when you reach your crossover point?
(3) Which option do you think I should go for?

 The following graphs show the poll results as of 3/25/15.

Monday, March 23, 2015

Recent Buy

Whenever I make a new purchase for my portfolio I feel it's only fair to get a post written giving all of the juicy details. I want to be as transparent as possible with my journey to reach financial independence through dividend growth investing. Being open about the moves I make allows for better discussion with all of you and helps spread ideas around as well as letting me create my own "investing journal" to chronicle why I purchased a company in the first place and that way I can revisit if something changes and make the decision on whether to continue owning the company or not.

Purchases for my FI Portfolio should slow down over the next month or two, although I still currently have enough capital for one larger purchase or two smaller ones.  Of course there's also future dividend payments coming in each month which will help to build up my capital and allow me to make regular purchases.  The great thing about having a fairly sizable portfolio already is that I can expect it to churn out over $1,300 per quarter in cold, hard cash.  I get to use that dividend stream for whatever needs I have, whether that's build up savings or capital for future investments.  I'm always on the lookout for opportunities to purchase high quality companies at solid long term valuations and have a few other companies in mind for potential candidates to add to my portfolio.

Saturday, March 21, 2015

Weekly Roundup - March 21, 2015

Quick update this week.  I've been back at the hospital with my son since he had a "triple crown", tracheostomy, g-tube and circumcision.  So he's had a bit of a rough week since pretty much the whole front side of his body is sore and got poked and cut into.  He's still got a long road ahead of him but hopefully with a more stable airway he can start making a bit more progress.

I did make a few changes to the portfolio this week as well although I haven't gotten a chance to get the post written yet.  Hopefully this weekend or early next week I'll be able to put something together but for now I just don't have the time.

Also thanks to everyone that has answered my financial independence plans poll.  If you haven't yet done so please go to the post for the poll.  Thanks!

In case you missed them here's the posts from this past week.
Thanks to each and every one of you that read, commented on, and shared posts from here this past week. I appreciate it so much. Make sure you follow me on Twitter@JC_PIP or sign up to receive new post notifications via email so you don't miss anything.

Thursday, March 19, 2015

Plans for Financial Independence

Most of those that visit my blog are working towards a specific end goal, I know I am.  That goal for the majority of us is financial independence.  Financial independence can mean different things to different people.  To me financial independence is the ability to have enough passive income coming in to cover your monthly expenses.  This opens up your options which is what we all want.  To not be a slave to the office because we have to.

Passive income can come from a variety of places such as rental real estate, interest on cash, you can set up target websites to profit from web traffic/advertising, write and sell an e-book, P2P lending, my personal favorite dividend growth investing, and many other possibilities.  There's plenty of other passive income opportunities with a varying degree of passivity.  Most passive income sources require a large amount of initial work and then you get to reap the rewards over time.  The reason that dividend growth investing resonates with me is that it provides a reliable source of income that will grow over time.  Some passive income sources, e-books for one, don't provide the important factor of growth.  They usually have an initially high income that tails off, but that's not the case with dividend growth investing.  If you select your companies properly they will continue to grow over the long term and you can reasonably expect your dividend checks to grow year in and year out like clockwork.

Wednesday, March 18, 2015

Dividend Growth Checkup - Part II

Earlier this month I checked up on the overall dividend growth rate for my portfolio and you can find that article here. I like to take quarterly or annual looks at the organic dividend growth rate for my portfolio to get a "big picture" view of how the companies I own performed in regards to dividend growth as a whole. I was quite pleased with my portfolio since the overall, 1-year, 3-year, 5-year, and 10-year organic dividend growth rates were all above 11%, except the 5-year at 9.88%.

 I don't expect to be able to keep an average 10% growth rate for decades on end, unless I want to constantly change my portfolio around, which would trigger capital gains taxes. It's encouraging to see the growth rates well above my projection of 5% organic growth so there's a built in margin of safety in my projections. A dividend growth rate higher than my 5% level would allow me to reach my crossover point sooner.

Continue reading this article at Seeking Alpha. 

Tuesday, March 17, 2015

Recent Buy

Whenever I make a new purchase for my portfolio I feel it's only fair to get a post written giving all of the juicy details. I want to be as transparent as possible with my journey to reach financial independence through dividend growth investing. Being open about the moves I make allows for better discussion with all of you and helps spread ideas around as well as letting me create my own "investing journal" to chronicle why I purchased a company in the first place and that way I can revisit if something changes and make the decision on whether to continue owning the company or not.

Purchases for my FI Portfolio should slow down from here.  Well, I need them too although there's still enough capital for two smaller purchases.  I do have my eye on a few other potential purchase candidates but we'll see what kind of opportunities that Mr. Market decides to throw our way.  The great thing about having a fairly sizable portfolio already is that I can expect it to churn out over $1,300 per quarter in cold, hard cash.  I get to use that dividend stream for whatever needs I have, whether that's build up savings or future investments.