Follow the dividend investment decisions of a person who has no background in financial investment and wishes to take control of their financial future.

Small Change to Site - 31 Dec 2014 16:45

Tags:

magnifying_glass.png

Going forward I will no longer be displaying my portfolio. My fear is that the portfolio takes away from the journey of learning and refining skills associated with Dividend Growth Investing.

Instead I'll be listing potential dividend stocks of interest that I am tracking for the year that may lead to future analysis or write-ups here on the blog. The list of stocks could grow or shrink throughout the year as I discover more potential growth or bargain equities.

See Stocks to Watch for 2015 page for my latest list ) - Comments: 0

Last Purchase of 2014 - QCOM - 27 Dec 2014 02:33

Tags:

logo_QCOM.png

I thought my last purchase of THOR Industries (THO) would be my last buy of the year but I snuck in Qualcomm (QCOM) at the last minute which will add $33.60 annually to my dividend portfolio.

snapdragon_800_chip.png

Qualcomm is most fammous for deploying technology in the mobile telcom industry with its most recognizable products being ARM snapdragon processors and 3G/4G/LTE modems. While mobile is their current cash cow they are far from sitting on their laurels and heavily investing on developing or acquiring new technologies that support the Internet of Things and quickly building a portfolio of new products.

Financially QCOMM is superbly managed. The have strong earnings & free cash flow growth rates, high profit margins (30%), no long term debt, over $17 billion in cash, a current ratio of 3.73, and a dividend payout ratio of 38%.

On the dividend front, QCOM has increased its dividend for 12 straight years with an average increase of 18.7% annually over the last five years. With a low payout ratio, continuing demand in mobile technology and heavy investment for tomorrows technology Qualcomm is making a stong case for continuing as a dividend growth machine for many years to come.

While some dividend growth investors might skip QCOM due to its low div yield (currently 2.22%) I believe long term dividend growth prospects out weigh the low yield and in the long term will produce a commendable yield on cost. With an aggressive dividend growth rate I calculate a fair value range from $79 to $90 share price, with current share price as of 12/26/2014 at $76 per share this was under my low end price target and a value buy.

QCOM_DIV.png

- Comments: 0

4th Quarter Portfolio Growth Update - 26 Dec 2014 14:28

Tags:

Quarterly Dividend Growth
% from Div Growth 2.23%
% from New Investments 1.87%
% from Reinvested Div 0%
% from Special Dividends 0%
% Overall Growth 4.11%
growth_chart_4.png

The 4th Quarter was one of my best for straight up passive dividend growth which contributed 2.23% dividend growth for just one quarter.

As mentioned in my last update Microsoft (MSFT) had 11% increase in dividends. BP (BP) surprised with a 3.4% increase in dividends despite ongoing legal and oil price concerns though I will temper no growth in 2015 considering the landscape in the oil industry right now. Bar Harbor Bank (BHB) continues with its ever continuing quarterly increases that grew 2.17% and is emerging as a dividend darling in my portfolio.

The largest surprise which I did not see coming was from Seagate (STX) who bumped up their quarterly rate by 25.58%. Every time I think STX will slow down they continually surprise and remain one of my best overall growth holdings in regards to yield and total return. To date my annual dividend yield on original cost is a whopping 8.49%, considering I bought this position 2 years ago it now yields better than most REITs and at a lower tax rate.

Looking forward to the first quarter of 2015 I have already received notifications from Maiden Holdings (MHLD) increasing its payout by 18.18% and General Electric (GE) increasing its payout by 4.55%. Other holdings I am looking forward to announce dividend increases in the first quarter include PPL (PPL) , Air Products (APD), Waste Management (WM), and HCP Inc (HCP).

Overall 2014 was a great growth year and my portfolio now yields a healthy 5.66%. Hopefully 2015 will be just as kind. - Comments: 0

New Purchase THO - 21 Dec 2014 03:31

Tags:

logo_THO.png

This month I initiated a small position in THOR Industries (THO) that should contribute $21 annually towards my 2015 dividends.

rv.png

Thor Industries specializes in Recreational Vehicles (RVs) as well as campers, special haulers, and custom buses. Their revenue over the last five years has increased year over year an average of 19% annually. Industry success is typically tied to the economy which currently accounts for most of the gains but one differentiator going forward will be retirees flush with cash looking to realize their dreams of traveling the country. Of course there are no guarantees that retirees will embrace this type of lifestyle and remains the one area of hesitancy I have and hence the small position I have started.

On the dividend front, THO has increased its dividend for 5 straight years with an average increase of 28% and if their 2015 dividend holds (I see no reason why not) then they are on pace to make it 6 straight years. There was some difficulty with interpreting the annual dividend totals as their were large fluctuations in 2009, 2012, & 2013. These fluctuations were due to special one time dividends of $0.5, $1.5 and $1 and annual payouts had to be adjusted to accommodate to see the underlying dividend growth.

THO_Div.png

Other features I find attractive with THO lies within its balance sheet where it carries no long term debt, has $289M of cash and a current ratio of 2.45. An area of weakness or concern is their overall margins which have weakened over-time and currently gross profit margins shrank from 13.1% to 12.8%. Going forward THO management will eventually have to improve margins in order to maintain growth.

While some dividend growth investors might skip THO due to its low div yield (2%) I believe long term dividend growth prospects out weigh the low yield and in the long term will produce a commendable yield on cost. With an aggressive dividend growth rate I calculate a fair value range from $56.83 to $64.58 share price, with current share price as of 12/19/2014 of $55 per share this was under my low end price target and a value buy. I'm not sure this is my last buy for 2014, I have my eye on Qualcomm (QCOM) and Cummins (CMI), but odds are pretty good that it is. - Comments: 0


Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License