Tuesday, July 30, 2019

ETHICAL STOCK OWNERSHIP


As I ride this long strange trip called life, one of my goals is to be able to retire at a reasonably young age.  I would have time to road trip, garden to my hearts content, and find out what new hobbies interest me. And sitting by the wave pool at the park while my kid swims like a dolphin......

 Basically, I do not plan on working until the day I die..

To achieve the goal of financial independence, I invest in dividend growth stocks.  I buy shares of strong companies that return a chunk of their profits as dividends, and ones that have a track record of increasing the dividend.  Since these  shares would be held long term, as the dividend increases my return rate from my initial purchase would also increase.  

For example, Boeing currently pays a dividend of around 2.42%.  As they have increased the dividend over the years, my investment now earns 5.27%.   Give it some time, and the dividend will pay more annually than what the shares were purchased for.

What kind of companies should I buy?  I want them to increase dividends, hopefully beat the inflation rate with that dividend at original purchase, and not be paying out too high a percentage of profits in these dividends, so they do not have a risk of cutting the payout.

Should I then choose companies that are more suited ethically to my tastes?  Should I buy "green" companies?  Solar companies? Should I avoid petroleum manufacturers?  Should I avoid tobacco companies? Should I stay away from companies like Walmart, that put local stores out of business and have full time employees needing food stamps?   

Or should I buy these companies to have a voice using the theory that if enough people buy shares of a company, they will change their culture?  I actually did that and bought 1 share of BP in 2010, hoping that if enough people did that, there would be a more vigorous clean up.  Hmmm...

One can make a case for unethical behavior or unethical products for 99% of public companies.  Coca-Cola and their sugar sales.  Hormel foods and their processed meats. Johnson & Johnson and their use of plastic.  Tyson foods and the whole concept of processed chicken nuggets....

I am not about to sacrifice my chance at retirement just because I did not want to be a .0000001% owner of a company like Hormel, or Apple, that relies on Chinese plants owned by Foxconn where the workers are in some sketchy conditions.

I own some oil company shares (Phillips 66 and Chevron).  I own some shares of Walmart.  I own shares of McDonald's.  I own Tyson and Hormel. It does not mean I have to eat at McDonald's or shop at Walmart and buy Hormel hot dogs and stuff my face with them.  They are going to be around whether I buy them or not.

But I consciously decided not to own any tobacco companies, like Altria (MO) or Phillip Morris (PM).  
It just crossed some line I have with knowingly poisoning their customers with a guaranteed killer.  I believe in personal freedom, but I will not be any percentage of that enabler.  Yes, they are diversified into other fields, but I just feel better in my soul not owning shares of them.  I have a large enough moat of other ethically challenged companies to avoid going down that road.

Some mutual funds claim to be "green" or "ethical".  But to whose ethical limits?

So what's your take on this?   Is there a company that you would refuse to own over some personal ethics?  Do you balance it our with a company that is "ethically pure"?  Am I a hypocrite for buying Chevron but not Phillip Morris?




By the way, here's my.....
DISCLAIMER:   I am not a licensed professional in any sense.  I am not a financial adviser.  
Far from it...  This site, my posts, and my opinions of publicly traded companies are for entertainment purposes only.  My personal investments should in no way in hell be considered investment recommendations. If you have money, seek a professional before making any financial decisions.  I am in no way liable for any financial losses occurred by any party that visits this site. 






Friday, July 26, 2019

Blog Roll Updated

I updated my blog roll and will be doing so periodically...

Here's a list of of some of my favorite blogs when it comes to dividend investing, food, music, etc.  Usually these are good reads and can be quite informative.

MONEY:

Budgets Are Sexy   Very entertaining website about many aspects of personal finance

Dividend Diplomats One of my favorites for seeing what stock purchases they made and what they are watching.  Much of their portfolios and mine are similar.

Mr. Free @ 33  I've followed Jason from way back in the earlier days of Dividend Mantra.  His portfolio gave me many tips along the way to my own financial freedom.  I do like his "Undervalued Dividend Growth Stock of the Week" articles.  Many of them are already in my portfolio.  Sometimes, I get a new one to check out

Passive Income Persuit  I used this blog's version of a portfolio spreadsheet (with a couple of tweaks) to track my own.  Easily the best spreadsheet I have found online.

DivHut   One of the first blogs about dividend investing I followed.

Mr Money Moustache  - Lots of interesting articles about living a frugal lifestyle.

Here are some more that I feel have a good vibe in regards to dividend growth investing

Mr. Tako Escapes

My Dividend Dyanasty

Dividend Daze

Passive Income Vortex

Dividend Hawk

Passive Cash Blog

The Dividend Pig

Dividend Growth Investor

Dividend Compounder

MUSIC:

I do my research on Discogs.   This is the ultimate database for researching, purchasing, and selling vinyl records  One of me favorite parts is I can add releases to my collection

FOOD:

I'm fortunate to have grown up being fed my my Greek mom and her wonderful cooking.  Other than the recipes I have learned from her, I often go to these sites:

Olive Tomato

Almost Turkish Recipes  One of my favorite sites.

Local Kine Recipes   For Hawaiian

David Rocco   For some amazing Italian

Persian Food Recipes   I've had fun trying some recipes here too

Elly Says Opa!  Another great Greek food blog.




















Wednesday, July 17, 2019

July Stock Purchases

"Hey John.  It's only July 17th. What are you doing?!?"

Yeah, I know.  July is not over.  We're barely half way through the month.  What am I doing?
Well, I'm done making my purchases for the month, and I'm eager to talk about it.

I wanted to take a bit of profits and buy some shares.  I think I had this look on my face....




I wanted to balance out my portfolio a bit more and took profits on some that were a bit more of a position than I prefer.  I stick to around a $4,000 position per company.  Apple (AAPL) was at over $9K cost basis.  The Southern Company (SO) was also well over the $4K threshold.   Both were well in the positive, so it was a good opportunity to take some profits and buy even more shares.  And my purchases all have a higher dividend rate than AAPL.  Win win.

I sold 27 shares of AAPL for $5,526.65 and 22 shares of SO for $1230.54.   SO is now at a $4,000 cost basis.  AAPL is at a $6,700 cost basis (and will not sell any more..).  I sacrificed $83.16 of annual dividend with AAPL and $54.56 with SO.   I need to make up the $137.72 in dividends, and them some.

Time to go shopping!

I first bought 37 shares of CVS for $2079.73 today after getting 3 shares 5 days ago  I owned some in the past, but always wanted to get to my full position.
These purchases added $80 to my annual dividends.  Booo-ya. 

Next, I decided to get Caterpillar (CAT) up to my $4K position.  I bought 17 shares for $2321.36.   Another one I had my eye on, but hesitated to buy just because they were always choice number 2 or 3 on a particular day. 
This added $70.04 to my annual dividends.  Already passed up the $137.72 loss!!!!

Then I got 7 shares for Cracker Barrel for $1256.16 to get to just about a full position.  Strong company that, like CAT, I held for a long time and wanted to get more.  Another one I skipped for too long.
This added $36.40 of annual dividends.

Finally, I spent the rest of my available funds to get 43 shares of Bank Of America for $1270.48.   I got this one up to $3,500 of my $4K goal.  As I had written in an earlier post  (Recent buy - BAC), BAC will soon announce a large dividend increase, and I wanted to get in on it.

This added $25.80 to my annual dividends.

So with my stock switcheroo, I added $86.52 to my annual dividends and $2643.29 of profits to my total cost basis.

Ahhhh.

Any thoughts?

- John






Sunday, July 7, 2019

Watch List

Many of the bloggers who write about dividend growth investing post their current stock watch list, usually focusing on a couple that they are monitoring that current month.

I do things a bit differently.   Instead of focusing on two or three companies that have a good valuation at the time, I have a list of about a dozen companies that have a good track record of dividend growth, low P/E, and low payout percentage.

When it comes time to buy, I look for the one that is the best value at that time.   

I do edit this list from time to time.  I always keep looking for companies with a nice track record and will remove a company if they have awful quarterly financial results or have changed their dividend payouts for the worse.

Image result for stock market

Yeah it looks that crazy....

Here's my watch list.  What you see is the Ticker symbol as well as the amount of shares I'm looking to purchase  (usually around $4,000 worth), my progress, the P/E, the payout ratio, the 5 year increase in dividends, and the track record of their dividend increases.   

I do have to update some of these numbers every few months.

SYMBOL
GOAL
SO FAR
1YR. P/E (under S&P 22.02)
PAYOUT RATIO (under 60%)
5 YEAR DIV INC %
INC DIV YEARS
ADP
26
0
37.18
76.7%
10.48%
44
AEP
57
0
18.03
63.8%
5%
5
APH
45
0
25.2
26.10%
27%
6
D
57
0
17.3
80.9%
8.22%
9
DAL
75
0
9.7
25.1%
12%
4
DE
28
0
13.8
29%
6.23%
1
DG
43
0
16.87
19.10%
4%
2
DUK
51
0
16.5
77%
3%
12
EXPO
77
0
40.7
40.60%
16%
4
GPC
39
0
20.73
58.60%
6.02%
62
HRS
21
0
26.49
36.98%
10.28%
17
KEY
236
0
9.84
39.53%
21.2%
8
LMT
14
0
18.6
46.40%
12.72%
15
NSC
24
0
19.1
35%
9%
8
ORCL
76
0
51.45
74.51%
9.63%
10
QSR
68
0
22.3
68%
81%
3
SCI
95
0
22.8
36.80%
19.42%
6
TJX
80
0
21.4
32.10%
21.88%
21
UNP
25
0
19.9
39%
15%
9


Comments?

Wednesday, July 3, 2019

Recent Buy - BAC


 After receiving my biggest dividend of my portfolio, I pulled the trigger on a purchase I’ve been looking forward to.  

I picked up 20 shares of Bank of America (BAC) this morning for $584.07.   I’m now at 74 shares in the portfolio, with a goal of getting that to around 130.

Even though I will never be a customer of Bank of America with great credit unions out there, it's hard to turn down a growth share when it come to funding my retirement...

After passing the latest Federal Reserve's Comprehensive Capital Analysis and Review (the stress test), they have been given the green light for  their capital plan and retuning $37 billion to their shareholders between dividend increases and stock buybacks.   There will be a 20% increase of their dividend to 18 cents per share from 15.  
That’s what I call a no brainer for hitting buy...  They were not on my normal watch list, but instantly jumped to the front of the pack with this announcement.   So I pulled the trigger.   I did not care about the valuation at this point, I just wanted to get in on it.  Their P/E is at 10.84.  Seems low, but the industry average is only at 10.51.  Still, they are in good financial health and I just could not ignore a 20% rise in dividends.

I picked up 20 shares of Bank of America (BAC) this morning for $584.07.    This increases my annual dividend by $12 before the official announcement.  With a 20% increase, my dividend will go up by $20.88 per year. 
I’m now at 74 shares in the portfolio, with a goal of getting that to around 135.   I’m using $4,000 cost basis for a full position at this time.

I just love buying shares of a company I know I will hang onto forever.