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. I normally try and get these posts up within a day or two of the purchase but like I mentioned in my option transaction post my grandfather was in the hospital and so I needed to be there. Things are looking much better and he's supposed to get moved to a rehab/PT center today if things still go as planned.
On May 15th I initiated a new position in YUM! Brands, Inc. (YUM). I really like the company's growth prospects mainly in the emerging/developing markets and they even have a few new store concepts that they're testing out here in the United States. China and India offer huge potential for companies that can develop a foothold with the consumers in these two massive markets. YUM Brands' store count is around 60 per million people in the United States and at the end of 2013 sat at 4. I don't expect to see the ratio get up to 60 but if it even approaches half the domestic number then we're looking at huge growth potential. I'm very excited to own a piece of YUM! Brands because I think they have a long runway for growth of the company and most importantly of their dividend payment to me. You can read my full analysis on YUM! Brands, Inc. here.
I purchased 20 shares for $75.16 which gives me a per share cost basis of $75.56 per share after commission. Based on the current annual dividend of $1.48 these shares will provide $29.60 in annual dividends and carry a 1.96% YOC. I feel that YUM! isn't exactly a steal at these prices but it was under my fair value calculation by about 2% and it's a company I'd really like to own more of. If we ever get that pullback that we've all been waiting for I'll gladly pick up a few more shares in order to average down my cost basis.
After some dividend increases throughout the month and with the new purchase my forward 12-month dividends for my FI Portfolio are now at $4,332.52. That's 86.65% of the way towards my goal of reaching $5,000 by the end of the year so I've still got a lot of work to do.
I've updated my Portfolio page to reflect this change.
Have you been making any purchases despite the markets' reluctance to provide solid value? Or are you just building cash and your watchlist? What companies are you looking to purchase on a pullback?