Recent Purchase: 5 shares of KMB

There are some good buying opportunities as of yesterday.  KMB wasn't on my short list, but I needed to get consumer staples on top of my portfolio again.  I was going to purchase PG or GIS, but due to its recent dividend increase, Kimberly Clark Corp (KMB) had the best yield.  While I'm not a big believer in their toilet paper market futures (wait 'til America discovers the bidet), diapers and depends may never go out of style.  Not to mention Kleenex in this flu season.  I dropped TDS from my T-Com watchlist and put KMB in its place.  I should now own enough high yielding staples to re-invest in for awhile.  Wal-Mart is still on my radar, but it needs to drop quite a bit before I'll buy in.  At market close today I will update my charts.  I recently added linear trendlines to a few graphs, to help me predict, or work towards, my future goals.  Right now they show the $2k div mark to hit sometime mid-September, and barring any hardship, I'll try to make that happen sooner.

ORI has been a pleasant surprise, one of the few stocks positive these last few days, and for quite a bit since the short selloff after the bonus dividend cutoff date.  There's a lot to be confident about all around going into the first quarter of the new tax year.  I expect some good buys in healthcare after Bezos threatens to buy something up, and with the president's goal to reduce prescription drugs (may not be a coincidence he mentioned this).

Now that my staples are on top again, I can look at some other possibilities.  The REITs (O, NNN) are high on my list, along with MAIN, both due to interest rates.  Healthcare is next depending on what happens, and of course utilities are still offering some nice buys.  I am also keeping my eye on Alaska Air to finish out my 2 industrials, as it has been downgraded.  I would like to get a better yield on that one. 

Earnings season always reveals some great buys.

Goal Reached!

This is my current annual income, after purchasing 29 shares of ORI and 13 shares of SO.

Having reached my goal with the purchase of ORI, I decided to double-down on SO.  I know the P/E is not acceptable using my criteria, nor is the payout ratio, but I also know that SO is only out of favor because of redistribution in the utility sector, and that SO benefits greatly from the Trump tax cuts.  I also know that YD sold all his SO (I'm assuming for the tax harvesting) and dropped it into AT&T.  This is speculation on my part, I think the yield is worth the risk, despite SO's nuclear infrastructure, which would have occurred with or without the tax cuts.  I think that there are safer options out there, but I am chasing the yield so I can fit the part of the somewhat desperate mid-life investor :)

I would really like to spend next week's investment on O, since REITs are currently sinking due to rising interest rates, but I do plan to hold onto my requirement of keeping staples the largest part of my portfolio.  I am keeping an eye on P&G after their loss from earnings, but will also be watching the possible ADM/Bunge merger, earnings for my other staples, and the possible addition of Wal-Mart or Smuckers.  

I will be updating my charts today, and will take some time later to comment further.  I've been busy the past 3 weeks and need to research some things and digest it.

Breaking News!

Old Republic International (ORI) is giving away a bonus $1 dividend per share if you buy in by Jan. 10th.  This is a stock that I had just bought because I had $300 left over from my initial $20k position purchases because it was an aristocrat (barely) and was considered in the financial sector.  They offer 3.6% yield as of this writing, which amounts to $0.76 a year - so this bonus is more than the actual dividends received if you buy in now.  You can also consider that (excluding broker fees) that "Buy 21 shares, get 1 share free" since at $1 per share at the current share price of $21.  It hasn't motivated much buying since the announcement, which is ok with me, as my next amount for purchasing won't be available until the end of the month.  I guess a good reason to get a decent position on this stock.  They raised their dividend last in March of '17, so I think we can expect a nice increase in '18.

Merry Christmas!  Ok, I'll go update my other pages for real now.

Almost there!

Recent Buys:
15 more shares of AT&T
15 shares of ADM

Recent Dividend Increases:
Abbot Labs (ABT)
Mastercard (MA)
WEC Energy Group (WEC)
Realty Income (O)

Things are chugging along nicely.  The Dividend increases were a nice Christmas gift, along with almost all of December's dividends showing up in my account at the same time (allowed more purchases of ADM).  I am now overweight on AT&T and will have to stop a bit on adding more - besides, it is now above water!  As Hannibal Smith said, "I love it when a plan comes together."  ADM was a recent addition/replacement to my watchlist after eliminating Altria and putting Philip Morris on the hit list.  ADM (Archer-Daniels Midland) is an agricultural middleman that specializes in corn and soybean.  It tends to be volatile, being so close to the farm futures, and is on the decline.  It may decline again due to ethanol de-regulations, but it is a solid dividend payer, and an aristocrat (42 years of payouts).  It was also near its 52 week low, which is a bargain in this market.  I actually had two possibilities for my second purchase this month, O & ADM.  O took off at the last minute, and actually was above water, but ADM was the better buy at the time, and helped my get my staples ahead of the rest again.


Now sitting at about $985 a year, my last purchase for the year should vault me over the $1k mark.  What that purchase will be is hard to tell.  With the tax bill set to pass the House today (passed Senate last night), effects on the market will determine which is the best bargain.  My son, Little Dividend, has received Armanino Foods (AMNF) from his grandparents and The AES Group (AES) from me.  A little consumer staple and utility to add to his growing portfolio.  He now makes $22 a year with those additions.  His stocks tend to be a tad more speculative because his old man is taking care of him.

Have a Merry Christmas all, and a Happy New Year if I don't post until after that time.  I'll update my charts at market close Friday, so check back later.

November Wrap-Up & The Future of Tobacco

I meant to post on 11/30 after market close, but my Google Sheets weren't updating.  I looked into it on the 1st, and found out that Google Finance shut down their API, at least for anything that isn't the company name or the share price!  I'm still in the process of tracking down the correct IMPORTDATA sequence for any website that can provide me with this info.  I'm not the only one affected, so perhaps someone can figure it out before I do.

Anyhow, I decided through much soul searching to pull out of tobacco.  While I don't believe smoking itself is wrong, and I believe everyone has a right to legal choices, and I have nothing against Big Tobacco (heck, this country was built on tobacco!), I have a feeling that it won't end well.  Let me explain.

Tobacco is considered a "sin tax".  I think that it is wrongly labelled this.  Any activity such as smoking or drinking is fine in moderation.  However, I didn't buy alcohol stocks because that particular vice, when not done in moderation, can affect others around the consumer (drunk driving, physical/verbal abuse, etc.).  Smoking is mostly self-destructive in it's extreme form, and harmless in moderation (cigar, vaping, cig a day, etc.).  You ask about second-hand smoke?  Nobody is forcing you to breathe it - you CAN leave the area that has it.  You CAN open a window.  My problem is the evolution, and elimination of tobacco.

E-Cigs are harmless for the most part, and there is little evidence to prove otherwise.  I don't mind E-Cigs or vaping at my work, in a theater, at a restaurant.  Yet they are still banned at these places.  Why?  Sure, nicotine is still used in many cases, but the second-hand aspect is all but eliminated.  By not allowing E-Cigs & Vaping to flourish, this is leaving open a dangerous door to add OTHER chemicals to these machines which ARE more harmful.

Couple this with the fact that marijuana *is* becoming legal.  It is only a natural progression for Big Tobacco to buy the smaller firms that handle this industry to ensure they are "FDA approved" and not unsafe in the manner that you get what you pay for, and nothing else.  They have the ability to turn the mass production of tobacco-based products into MJ based products.  And MJ, in my opinion, has the same effects on driving as alcohol does, and the same effect as cigarette second-hand smoke, in that it isn't healthy to breathe.

I don't smoke.  I don't mind or care if people do.  I'm not here long-term, and I may not even see this prophecy of mine come to fruition.  So why do I care?  Because I plan to leave these stocks to my children to live off of the dividends as well.  While I try to raise them with the knowledge and opinions I have, they will still be growing up during a time where societal norms are much different than what I grew up with, and may very well form different opinions.  I remember seeing a cigarette pull vending machine at a Big Boy's restaurant, Andy Griffith lighting up now and again, and Big Tobacco relentlessly hounded by the media (yet still flourishing).  My kids will be growing up seeing E-Cigs being used by their grand step-father (I mention his relationship to me specifically) and MJ becoming the new societal norm.  I don't want one more "cheerleader" for such vices.  My children will not be rooting for Altria's new MJ-Nicotine vaping cocktail.  

My portfolio transition won't be a fast one.  I did sell my 19 shares of Altria AT A NET PROFIT (even after brokerage fees) and reinvested the funds into my second REIT pick, National Retail Properties (NNN).  This has the effect of giving me a BETTER YIELD, checking one more box on my diversified portfolio list, and unfortunately, reducing my staple ownership below discretionary (again).  Because I eliminated Altria (MO), I put ADM on my watchlist.  It actually is very tempting right now.  Secure dividend, this food company is at a 52 week low.  With the success of Hormel and General Mills coming back from the red, I will probably be buying this soon if it stays at these levels.

Now, there's still the small problem of Philip-Morris (PM) in my portfolio.  It is the only stock I own that is below 5% and is actually at -15% as of this writing.  I don't doubt it will bounce back (someday), but I can't sell it at its current level.  What I *can* do, is tax harvest it in late 2018 for the tax benefits and invest in something else with a better yield, like I did with Altria.  If, by some miracle it goes above water + trading fees, I'll cash it out and reinvest.

My averaging down of AT&T is making some great returns, my portfolio is quite healthy, and it is past the initial investment stages.  I am very close to buying on dips and adding stocks on my watchlist as the opportunity arises on a regular basis.  I am on track to hit $1k per year in dividends, and by April, should increase my contributions by 75%.  I am keeping an eye on the new cryptocurrency that MasterCard (MA) is backing, Glint.  The Senate just got through their messy tax bill vote, so things are looking up economically.  Time to check out David Fish's new list, and buy a Christmas tree! If you remember from my "About Me", I used to keep an artificial tree.  Well, 11 months is too long for any item to not be used, so I tossed it.  I'm trying out a fresh tree this year.

Happy Thanksgiving

Have a break while at work today, so thought I'd share a few things.

I averaged down AT&T yesterday at market open, which was good as the stock went up from there.  Bought 21 shares, and added a nice +$40 to my annual div income.  Now at about $920, I have 3 more paychecks before the end of the year, so I *shouldn't* have any problems hitting the $1k mark for annual income.  Not bad for 6 months of work! :)  I may just average AT&T down again , since I'm not overweight on it yet, and the yield is incredible.  I figure the Time Warner merger will either boost the stock price, or if it fails, I'll be guaranteed my dividend for a long time, I really have a hard time seeing a downside to this.  I wish they would just sell off CNN already and be done with that fake news! :P

AT&T may be my first DRIP stock.  Another round of purchases at the current price and every quarter I'll have enough AT&T dividend income to buy a full share of AT&T stock.  My philosophy is to take dividend earnings and purchase shares of stocks on sale, not throw money at stocks that are overpriced such as Abbot & Mastercard.  If AT&T ever bounces back, I may have to reconsider, but since it is currently underwater in my portfolio at (now) -6%, it is definitely a candidate.  As a middle-aged investor, I need to be a bit more aggressive and meticulous about where each dollar goes.

I learned a real good lesson a few weeks ago.  I was a bit worried about the consumer staples, O, and AT&T falling and maybe never returning to the levels I bought them at, but as I gradually saw everything coming back (especially Hormel), I learned that I need to have more confidence in my stock picks.  I mean, over half are YD picks, have a record of stability, and the ones that are semi-speculative I still did my research on and have at least 6+ years of dividend increases.  I should have a bit more confidence in my choices.  After all, I am quite diversified, so a stock or two under water shouldn't concern me too much.  I was hesitant about buying AT&T initially, but I did my homework, looked at the (small) amount I was investing, and realized the potential reward was worth the risk.  No investor should worry about one particular stock's effect on their portfolio.  If they do, then they need to diversify more, and make sure they aren't overweight in any one stock or sector, that's all.  I guess I had just been burned too many times before, it is good to be cautious, but not paranoid if you don't have data to back it up.

Anyways, Happy Thanksgiving.  I have a lot to be thankful for.

P&G and my watchlist top picks

Bought 10 shares of Procter & Gamble.  I know many Div investors are waiting for a better yield, but getting 3.18% on a Consumer Staple is a bargain in my opinion (last I checked inflation was 1.9% so, all good).

I also filled out my holdings spreadsheet with my top picks to fill out my 32 dividend stocks.  While I may not purchase them yet, they are in line.  Some of them need to shape up before I will buy them anyway or they will get replaced.  I'll take each one at a time to explain the method to my madness.

Tyson Foods (TSN) - Low yield, but a profitable company.  I may have missed the boat on this year's holiday prime purchase time, so it might not be until Spring/Summer before I grab this one.  I know I'm not going to buy a frozen turkey from Amazon, so I expect this company to excel in these times.  This will probably be my last "Consumer Discretionary" purchase.

Wal-Mart (WMT) - With the closing of many K-Marts (and Sears), I believe Wally World will only get stronger.  I may have missed the purchase boat on this one as well, but I might grab it next buy-in pre-shopping season or next pullback.  Having a stake in WMT & Target should cover the bases against Amazon, and you can never have too many Consumer Staples, anyway.


Alaska Air Group (ALK) - I was surprised to find this listed as an Industrial on Fish's list, but then you don't see many airlines with 5+ years of dividend increases.  This airline and Delta both have hit that mark recently.  It is a speculative purchase, but it fills out my 2 industrials, and airlines are always good for profits (at least) if you know when/how to buy them.  I don't care much for using domestic airlines in general, but I know them, and I know how they behave, so I feel this is a safe bet for someone who has made money on airlines over the years.  Probably the only sub-sector I can day-trade successfully.

Telephone & Data Systems, Inc. (TDS) - Ugh, the TCom sector is practically garbage, worse than the retail sector since even retail has a few gems.  AT&T is basically the only shiny piece of glass in the rough of this sector, and that isn't saying much.  I am tempted to just have ONE TCom stock and find some other sector to fill out the "32 Div Stocks".  TDS isn't pretty enough to own, although they have increased divs for quite a long time.  Their Yield Payout too high, their P/E is too high, Beta is too high.  It will be a while for this stock, or even this sector.  I will probably buy this sector last.  Verizon I won't consider due to their debt.


Exxon Mobil (XOM) - What's to say that hasn't been said?  It's Exxon, basically Chevron's twin when compared to everything else in the Energy sector.  Oil may be in a decline, but with the Tesla Tax Break going away, I think Oil will do fine until I expire.  There's also that smug feeling of buying gas at the pump and knowing that what I pay will come back to my pocket.  Go Big Oil!

Owens & Minor (OMI) - Healthcare stocks have done very good for me, J&J and Abbott let me feel a little freer to be somewhat speculative in this sector.  However, I would like to see OMI's Yield Payout lower a little bit more before I buy.  The stock is inexpensive, so if my son, Little Dividend, snaps it up, I may look at something else.

 

National Retail Properties (NNN) - REITs after a certain point become reliable compared to each other in that sector.  I know YD doesn't like the way they operate fundamentally, but they are there and real estate never goes away.  NNN has raised its dividend for quite a few years, and until I can mentally get past the REIT yield payout number (O's is higher) I'll move in here.  There are about two other REITs I am keeping my eye on, so this one may change.



Qualcomm (QCOM) - Mastercard is considered a "Tech" company these days, so that works for me, as Tech is another lame sector for dividend investors.  QCOM and IBM were the only two worth considering for me, and since Mastercard took one spot, I can give the other to QCOM.  That is until they get bought out by Broadcom - I still need to keep an eye on this one in the coming months, and who knows, IBM might get its chance at bat.

Last but not least...

J.M. Smuckers (SJM) - The Consumer Staples have been beat up pretty bad since Amazon/Whole Foods.  If staples have been beat up, then Smuckers has been put into a coma.  The drop is so significant, it suddenly looks attractive.  Their Yield Payout is great, they still have a spot in the grocery aisle, and in my refrigerator.  However, if Clorox or Colgate decide to have an attractive yield, I may head in that direction!  I wanted KMB in this spot, but their fundamentals aren't looking so hot.



Well, there's my tentative watchlist.  I'm pretty committed to TSN, WMT, ALK, & XOM, but the others not so much.  After filling out the list, I can concentrate more on buying on dips in my stocks, getting to the "DRIP Level" (see my post on DRIPping), and getting my monthly payouts closer to each other.  Then I could buy more Abbot on a pullback, or CMP the next time their mine caves in.

Happy Investing!