Cisco Dividend Stock Analysis

I wanted to take a more in depth look at a company I've sold some puts on, Cisco (CSCO).  Cisco is by no means a dividend champion, challenger, or even contender with only 2 years of increases, but the potential is there for rapid growth so I figured we should look a bit more into the company.  Cisco closed trading on Friday, May 17th at $24.04.

Company Background (sourced from Yahoo! Finance):

Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP) based networking and other products related to the communications and information technology industries worldwide. It offers switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, access points, and servers, as well as function as aggregators on local-area networks and wide-area networks; and routers that interconnects public and private IP networks for mobile, data, voice, and video applications. The company also provides set-top boxes; cable modem CPE products, such as data, EMTA, and gateways; cable modem termination systems products; videoscape software products; and headend equipment, which include encoders, decoders, and transcoders. In addition, it offers collaboration products comprising IP phones, call center and messaging products, unified communications infrastructure products, and Web-based collaborative offerings, as well as telepresence systems that integrates voice, video, data, and mobile applications on fixed and mobile networks; and security products consisting of firewall, intrusion prevention, remote access, virtual private networks, unified clients, network admission control, Web gateways, and email gateways, which deliver identity, network, and content security solutions for mobile, collaborative, and cloud-enabled businesses. Further, the company provides wireless products, such as wireless access points, controllers, antennas, and integrated management solutions; data center products, which include blade and rack servers, fabric interconnects, and server access virtualization; and home networking and other networking products. Additionally, it offers technical support services; and responsive, preventive, and consultative support services for its technologies.

Option Expiration Friday and a Closed Option

The 3rd Friday of May just rolled around.  What?  Already?  And with that comes option expiration.  Two of the puts that I sold expired this past Friday and I also closed one out late last week.  Work's been busy and the satellite has been very shady so the report for the closed option is just now getting done.

Weekly Roundup - May 18, 2013

Unfortunately I had to head back to work last Friday so I didn't get the weekend at home, but around 2.5 weeks was still nice to have so I can't really complain.  It was a long drive to get back out to work and it was even worse because it was storming on the drive.  Such is the life of working in the oil field.  I've made up for that time though since then since we pretty much haven't done anything for 5 days or so, but I've still been getting paid.  The only bad thing was that I was stuck on the rig instead of getting to be at home with my wife.  It's times like these that really push me to remain focused on reaching FI at a really young age.

Net Worth Update - April 2013

The markets continued their climb higher and brought my portfolio along for the ride since more and more of my net worth is tied to the markets.  While I don't necessarily care too much about the value of my portfolio increasing as much as the dividend stream increasing, a rising number is still good to see.  I had an absolutely outstanding month of saving with over $7,200 from my after-tax pay going straight into savings.  Got to love months like that.  I also had a little over $1,300 in total contributions to my 401k and just under $1,000 for my ESPP withholding.  Those made up the bulk of my net worth increase that I could control, the rest was from market fluctuation and of course the dividends received.

Recent Option Transaction

Yesterday the markets continued their run higher bringing along Halliburton (HAL), my employer and therefore source of ESPP shares along with it.  I'm still way overweight my company's stock and with another 198 shares hitting long-term capital gains treatment on January 1, 2014 I decided to sell a long-term call to go along with it.  I'm hoping to get a chance to use this as more of a trading vehicle to try and juice the option premiums that I receive but if they get called away that's fine by me as well.  

Income Update - April 2013

Another month has rolled by and it's been just an amazing start to the year.  My income has been higher than average every month so far this year, although June's will take a dip.  April was a pretty standard month with nothing really out of the ordinary so expenses stuck right in line with where I want them to be.  My minimum expenses for the month came in at $1,361.56 which brought my average minimum expenses down to $1,370.09.  My goal when I started the year was to get these expenses to average under $1,400 per month, so I'm on track for that.  My total expenses did creep back higher than I'd like but not by too extreme of an amount.  I spent a total of $1,554.60 in April, which raised my average total monthly outlay to $1,522.89.  I'm still okay with this number although there's still things I want to focus more on.

My food budget still seems pretty high considering I'm paying for myself only for most of the month.  Groceries came in under budget but the restaurants hurt my overall food budget.  Both of these I want to work more on lowering the expenses.  Overall I still came in under budget by $20.46, so there's nothing much to worry about and just some extra attention to be paid.  Cooking for myself while away at the rig is the biggest issue for my grocery budget.  I tend to go for convenience after working because the cooking equipment is different from rig to rig and usually mediocre at best.  I really hate having to learn whether the oven/stove cooks higher or lower than normal every time that I change rigs and it's a huge pain to me.  I love cooking though so I just need to quit being lazy and do it already.

The Trend is Your Friend

Hey Passive Income Pursuit readers! I’m Marvin from Brick By Brick Investing, a blog where I teach the average Joe about investing and how to secure financial freedom by building passive income through the stock market. Quick thanks and shout out to Jonathan for allowing me to grab your attention for a brief moment. Let’s get right to it!

When it comes to investing there are two separate camps, fundamental analysis and technical analysis. When you conduct fundamental analysis you establish a value to a company based on assessing its intrinsic value. While technical analysis involves reading chart patterns to determine bullish or bearish patterns.

You will see or hear some investors swear up and down that one camp is better than the other. Take Warren Buffet for example, I’m not friends with Mr. B but I would imagine he scoffs at the idea of technical analysis. While a technical analyst could care less about the name of the company or what type business it conducts. They simply want to see the chart and remain as unattached as possible.

Weekly Roundup - May 11, 2013

This has been a crazy week.  Getting my mom out of the hospital and back home, followed by getting her healthy again took up most of the time from Saturday until Tuesday.  Since then it's been relatively quiet around here until yesterday a little after noon.  I was hoping it would be quiet as far as work was concerned but I got a phone call saying to be ready to possibly head out  Friday night.  No bueno!  I was really looking forward to being home through the weekend since I hadn't received a call yet, but that's what I get for thinking that might happen.  There's still a chance that I didn't have to leave yesterday, so I'll update y'all sometime this morning.

In other news I did loosen up the purse strings this past week and bought 4 books.  Ooops!  I never should have walked into Half Price Books or gone to their website.  I purchased Buffetology, The Single Best Investment, The Ultimate Dividend Playbook, and Options as a Strategic Investment for an average cost of $8.48 per book.  Not bad considering it would have be over $100 if I purchased all of them new through Amazon or Barnes & Noble.  I've never read any books on dividend growth investing and was hoping to find these at the Half Price Books that's near my house.  Well that never happened so it was time to just go on and order some.  I'm looking forward to getting a chance to read through all of them and will share my findings.

Recent Option Transaction

I went ahead and sold another put option on Cisco (CSCO) this morning.  This time it was a $21 strike expiring next Friday on May 18th.  I sold the put for $0.55 and after commission and fees received $47.01 in option premium.  Cisco was trading around $20.95 at the time of sale.

Recent Buy

I'm reporting a purchase from Tuesday, May 7th where I picked up 40 shares of Microsoft (MSFT).  I was actually heading to my brokerage account to try and cancel the order because I felt I was being a bit hasty in the purchase but by the time I had logged in the purchase had gone through.  I'm still happy with the purchase although I think I could have picked up the shares for less.  Microsoft is a dividend contender with 10 years of increases in the books.  The generate boatloads of free cash flow and I don't see that changing anytime soon.