Wednesday, December 30, 2015

New Year, New You, New Goals


2015 is winding down and 2016 will be in full swing before we know it.  This past year was very crazy for my wife and I and we're both ready to move forward into 2016 and get back on track.  Financially it was fairly difficult and we ended up taking some steps backwards on our road to financial independence but we would have gladly taken much bigger steps back if it would have meant things would have turned out differently.

The new year is traditionally the time when people make resolutions for the coming year.  Typically resolutions center around health and wealth; however, if you ask the average person about their resolution there's very little meat to them.  A typical answer is something along the lines of lose weight, save more, or something else that is just too broad to keep their focus for more than a few weeks.  That's why you'll see the gyms packed in the first days of the new year but slowly see the headcount drop as the month marches on.

Monday, December 28, 2015

Recent Sell


Whenever I make a new purchase, or the rare sale, for my portfolio I feel it's only fair to get a post written giving all of the juicy details.  Normally I try to get the posts out as quickly as possible but there was way too much going on in my personal life over the past two months that I just didn't have the time.  So I want to update you all on some of the changes made to my portfolio.  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.

Friday, December 25, 2015

Merry Christmas!


Merry Christmas to all of you!  I love the Christmas and holiday season because it traditionally means gathering with family and friends.  I hope you all take the time today to enjoy your time with family and friends and focus on those that mean the most to you.




Image provided by Idea Go on FreeDigitalPhotos.net

Wednesday, December 23, 2015

The Continued Sell-Off In Shares Of V.F. Corporation Is Juicing Expected Returns


Chances are you have at least a couple of clothing items that V.F. Corporation (NYSE:VFC) offers within your closet. Whether it's jeans, backpacks, t-shirts, jackets, shoes, boots, you name it and V.F. Corporation likely sells it. Among its brands, it has 2 that provide over $2 billion in annual revenue and several sporting double-digit year-over-year growth. Shares have continued to trend lower due to low retail expectations and currency headwinds; however, the shares offer a compelling valuation at current levels.

V.F. Corporation is a dividend aristocrat with 43 consecutive years of increasing dividends. Every $1 invested in VFC 10 years ago is worth $5.76 today which is a 19.1% annualized return. Every $1 invested in VFC 20 years ago is worth $15.66 today, which is an excellent 14.7% annualized return. 

Projected Earnings and Dividend Growth

Before we move into the valuation analysis, let's get some general information out of the way. The reference entry price will be the closing price from December 21, $62.35, with an assumed purchase date of December 23. For fiscal-year 2015, V.F. Corporation is expected to earn between $3.11 and $3.18 with dividend payments totaling $1.33. This pegs the 2015 payout ratio between 41.8% and 42.8%. Return calculations will go through December 31, 2018 at a price of 20x 2018 earnings per share.

Continue reading the V.F. Corporation Valuation Analysis on Seeking Alpha.

To view more of my analyses check out my Stock Analysis page or in the following Google Sheet.




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Monday, December 21, 2015

Dividend Growth Investing at Work - Dialing Up More Dividends


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Saturday, December 19, 2015

Weekly Roundup - December 20, 2015


As the Notorious B.I.G. sang "Mo' Money, Mo' Problems", although this past week has been more like "Mo' Problems, Mo' Money".  I'm still out in West Texas which I'm not happy about and to make matters even worse we've essentially made no progress over the last week.  But not all is lost since whenever there's problems out here it means I make more money which means more savings which means more investing.  Plus how many other jobs out there can you get paid to play video games/watch movies while there's issues that aren't related to your specific part of the job?  That's good in small doses but when it keeps happening over and over it gets frustrating since it does mean I'm away from my wife.

Friday, December 18, 2015

Dividend Growth Investing at Work - Raising Rents and Dividends


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Wednesday, December 16, 2015

Net Worth Update - November 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.

October was great for the net worth and November followed up with a very meh month.  The S&P 500 was essentially flat for the month which meant changes were primarily made via savings.  Unfortunately there wasn't much on the savings front due to me forgetting about our homeowner's insurance bill being due. which took away pretty much all the investment capital.  The majority of our net worth is tied to the performance of the stock market so a break from the roller coaster of the last few months was welcomed  The good news though is that the market changes are just noise to try and get your emotions to make you do something foolish.  It's the dividends that help to keep you sane when the markets are crazy or even boring.  Dividends are always a positive portion of return and in November we ended up with over $420 in dividends received.

Even better was the THREE dividend increases announced during the month.  That's extra money for doing nothing and I'm way okay with that.

For the month our net worth was flat just like the markets with a decline of just $12.46.

Tuesday, December 15, 2015

Keep Your Parents and Your Portfolio Moving with Stryker Corporation


When looking at my portfolio, one thing that stands out is the lack of exposure to the healthcare sector. I don't necessarily aim for certain sector allocations within my FI Portfolio; however, I'm very bullish on the sector and would like to increase my exposure there.

There's no denying that the healthcare sector is facing massive tailwinds with the "Baby Boomer" generation retiring daily. According to a 2014 report from the Census Bureau, the U.S. population of those 65+ is expected to nearly double between by 2050. The bulk of that growth is expected by 2035.

Given the demographic trends and vital nature of the healthcare industry, I've been looking for companies that fall into the sector and also fit my desire of being excellent dividend growth companies. Stryker Corporation (NYSE:SYK) is one such company that has grown dividends for 23 consecutive years.

Every $1 invested in Stryker Corporation 25 years ago is worth $55.83 today. That's 17.4% annualized growth. Historically Stryker has delivered excellent returns for investors and I expect that to continue moving forward. However, valuation is key to determining future returns, so I wanted to look at the current valuation for shares of Stryker and the future return prospects over the next 3 years.
Continue reading the Stryker Corporation Valuation Analysis on Seeking Alpha.

To view more of my analyses check out my Stock Analysis page or in the following Google Sheet.




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Monday, December 14, 2015

Why Dividend Growth Investing is Awesome!


There's lots of reasons to love receiving dividends from your portfolio.  For starters they are a truly passive income source.  You don't have to go around making sales calls or doing paperwork for the company.  All you have to do is invest in some of the best companies in the world and collect the checks.  Even better is that many companies increase their dividend payment each year which is a nice bonus since it means you get to collect even more money just for having an ownership stake.

A passive income source that tends to grow each year is right in the wheelhouse of those that are pursuing financial independence.  Financial independence is when your dividends, or other passive income sources, are higher than your expenses.  That gives you the freedom to pursue whatever it is your heart desires.  Whether it's writing the next great American novel, volunteering, spending time with family, doing extensive travelling, changing careers to something that might be more emotionally rewarding but not as financially rewarding as you need for your lifestyle.  The possibilities really are endless whenever your expenses are covered without having to commit 1/3 or more of your day to work.

Saturday, December 12, 2015

Weekly Roundup - December 12, 2015


I can't believe that we're already almost half way through December where in the world has the time gone?  We'll be on to 2016 in the blink of an eye.  I never understood this as a kid but time really does speed up as you get older.  Of course that's why so many of us are working to build up our portfolios to be able to own our time once more instead of slaving away for "the man".

Unfortunately I'm still at work and even worse is that it's out in West Texas.  Don't get me wrong there's some great things about West Texas but working out here is not one of them.  For starters it's about 10 hours from home.  And let's not forget the fact that it takes hours to get to any place worthwhile.  But one of the great things about it is that there's some truly amazing sunrises and sunsets.  I snapped the photo at the top earlier this week.

With Christmas just around the corner what better way to spread some Christmas cheer than with some free stock?  I can't think of anything much better.  Fellow blogger Ben over at Sure Dividend is offering a drawing for a $100 stock gift card through StockPile for the top 3 ranked Sure Dividend Stocks.  That's $300 total to invest in some of the best companies out there just for joining the drawing.  You can sign up for the contest via this link.  But hurry because the giveaway ends on December 15th with prizes awarded on December 16th.

Friday, December 11, 2015

Restarting the Roth IRA


For some unknown reason taxes and tax optimization has struck my fancy since returning back to work and blogging regularly.  Today I wanted to look at some of the benefits of Roth IRA's and why I'm glad that we're finally getting to invest in them again.

Roth IRA's are a powerful tool for long term investors.  The way Roth IRA's work is that you pay taxes on your income now but once you invest your savings inside a Roth IRA everything is tax free whenever you withdraw the funds.  That's tax free capital gains and dividends, at least as the law is currently written.  There's no immediate tax break but you reap the tax benefit later on by not paying taxes.  For those seeking financial independence that's a huge boon to provide tax free income to get you through the in between years of financial independence and access to traditional retirement accounts like 401ks.

Another benefit of Roth IRA's is that you can withdraw your principal after the account has been open 5 years.  That might not be the best route for long term wealth creation, but it's a nice benefit to help you through the bridge years if you just can't stand working any longer.

Wednesday, December 9, 2015

Dividend Update - November 2015


It's the end of one month and the beginning of another so it's time for my favorite update: my dividend update.  These dividend 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 pages to see what dedication to an investment plan can give you.

Tuesday, December 8, 2015

Recent Sell


Whenever I make a new purchase, or the rare sale, for my portfolio I feel it's only fair to get a post written giving all of the juicy details.  Normally I try to get the posts out as quickly as possible but there was way too much going on in my personal life over the past two months that I just didn't have the time.  So I want to update you all on some of the changes made to my portfolio.  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.

Monday, December 7, 2015

Church & Dwight Co Inc.: Dividends Will Satisfy, Total Returns Look Dirty


One of my goals for the year was to increase my exposure to consumer staples companies in my portfolio. Consumer staples tend to have less fluctuations in their operations compared to other sectors of the economy. They also typically have pricing power and a strong baseline demand that doesn't change with the strength of the economy. Their stable nature makes many of them excellent candidates for investment within a dividend growth portfolio.

Identifying high quality consumer staples companies is the easy part. Finding the shares trading at attractive valuations is the hard part. One company that I've been watching for years is Church & Dwight (NYSE:CHD). Their products are likely found within just about every household in America. Looking at companies like Procter & Gamble (NYSE:PG) and Colgate-Palmolive (NYSE:CL), there's no doubt that there's profits and growing dividends within the sector.

What intrigues me most about Church & Dwight is their size. Church & Dwight's market cap sits at just 11.37 B while Procter & Gamble and Colgate-Palmolive sit at 211.74 B and 59.50 B, respectively. This makes them an excellent candidate for outsized growth compared to their competitors that are already behemoths.

Continue reading the Church & Dwight Co., Inc. Valuation Analysis on Seeking Alpha.

To view more of my analyses check out my Stock Analysis page or in the following Google Sheet.




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Saturday, December 5, 2015

Weekly Roundup - December 5, 2015


This past week was pretty boring and quiet.  Work was smooth on our end but unfortunately it was quite slow during what should be one of the faster sections of the well.  I can't stand when things are slow out here because every hour making no progress out here means that's another hour I'm not at home with my wife.  But at least it pays the same whether I'm actually working or just watching tv as long as I'm out here.

There's not a whole lot to report this week because frankly very little happened.  That's good and bad though.  I'm getting frustrated with how many different expenses keep creeping up on me though.  It seems like every month there's another $1-2k expense that I had forgotten about after being out of the loop for much of this year.  I know I've said this before but I think we might finally be caught up on things.  There's still some significant savings we need to come up with regarding our property taxes but if there's no other emergency expenses that need to be covered then we should be able to hit that pretty easily.  I'm excited to finally start getting back to investing because while I love writing about it and analyzing companies I love practicing what I preach even more.

Friday, December 4, 2015

Will United Parcel Service, Inc. Ship More Dividends Your Way?


If I own a company that makes a product for consumers, there's a few options as to how I can get those goods into the consumers' hands. I can build out smaller, local factories and rely on local shipping methods, although that would lead to a decrease in efficiency due to smaller scale plants and profitability due to needing more employees. I can also build fewer larger factories that would improve efficiency and profitability but would require me to build out a distribution network, which would be time consuming and expensive. Or I could contract with one of the best logistics companies in the world to deal with the shipping and likely save money over the long run.

The company I'm talking about is United Parcel Service (NYSE:UPS), a leader in getting goods to where they need to be on time. United Parcel Service currently has a 6-year dividend growth streak after keeping the dividend steady during the Great Recession. However, the dividend has not been decreased since being initiated in 1999.

Every $1 invested in United Parcel Service 20 years ago is worth $2.20 today, which is just a 5.1% annualized return. The lackluster returns are largely due to the lofty valuations that reduced the operational growth of the company. Shares of United Parcel Service currently offer an initial yield of 2.82%.

Continue reading the United Parcel Service Valuation Analysis on Seeking Alpha.

To view more of my analyses check out my Stock Analysis page or in the following Google Sheet.




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Thursday, December 3, 2015

Position in Focus: Union Pacific


Back in October I mentioned how we were going to be in a lower tax bracket this year compared to last year and most years going forward.  We're dropping from the 28% tax bracket all the way to the 15% bracket because of much lower income this year.  Going forward I expect us to be in the 25% tax bracket in most years so it makes sense to try and take advantage of the lower rates while we can.  As such it would make sense to maximize our capital gains this year since we would pay 15% on short term gains and 0% on long term compared to the expected 25% and 15%.

However, there's still the opportunity to do some tax loss harvesting as well.  The downside to doing tax loss harvesting though is that we'll get a bigger benefit out of it in the future when we have higher tax rates.

There's a lot of factors that go into the decision making process when considering whether the harvest tax losses or not.

One holding that I'm considering doing tax loss harvesting on is Union Pacific (UNP).  I originally purchased 2 different lots of Union Pacific at much higher prices in June of this year at $101.81 and $97.49 per share cost basis', respectively.  The current share price is down at $83.99 which means the position is sitting on a 15.87% short term capital loss.  I have received one dividend payment though that helps to ease the sting slightly that bumps the total return to just a loss of 15.32%.

Wednesday, December 2, 2015

Delivering Dividends With Owens & Minor Inc.


I currently own just 3 companies that are directly health care related, although I do own some health care REITs that provide additional exposure to the industry. According to a 2014 report from the Census Bureau, the 65+ population in the United States alone is expected to double from approximately 40 million currently to 80 million by 2050, with the majority of those gains seen over the next 10-15 years.

An unfortunate side effect of aging is that your health care costs rise precipitously. It's estimated that about half of your lifetime medical expenses will be incurred from the age of 65 on. I'm very bullish on the health care sector because it's an essential part of everyone's lives, and the aging population will provide a tailwind for the industry. The demographics for increased health care spending make the industry very intriguing from an investment standpoint, and as such, I want to increase my exposure to the sector.

Owens & Minor, Inc. (NYSE:OMI) is a company within the sector that should do well as the need for health care supplies expands over the coming decades. Owens & Minor is a logistics company that deals with shipping medical supplies across the United States and Europe. Since they don't manufacture the supplies themselves, they are less exposed to potential regulation that could harm their profitability.

Continue reading the Owens & Minor, Inc. Valuation Analysis on Seeking Alpha.

To view more of my analyses check out my Stock Analysis page or in the following Google Sheet.




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Tuesday, December 1, 2015

Has It Really Been Four Years Already?


Four years.  In early November I reached my 4 year "blogiversary".  I honestly don't know where the time went because it doesn't seem like it was 4 years ago that I was writing that horribly brutal post introducing myself to the finance/investing blog world.  Seriously, don't check it out.

So much has changed over that time.  For starters my portfolio has grown significantly.  My FI Portfolio's value was $0 with total investments of $48250.  Just 4 short years later and those numbers have grown tremendously.  My taxable accounts, FI Portfolio and Loyal3, totaled over $190k at the end of October with total investments worth over $360k.  My net worth has grown by a factor of 6 to just over $400k at the end of October.

Even more impressive, to me at least, is that those numbers include this year which has seen a considerable decline in investment capital.  I've only added a net of $7,500 to my FI Portfolio this year due to other demands for my cash.  Yet my portfolio has continued on churning out dividends that have already surpassed $5k for the year.  That's almost as much capital as I've added to my portfolio through dividends alone.