Bold Move – Buying ARCP!

This is an unusual post that I’m writing. Since last couple of weeks, American Realty Capital Properties, Inc. (ARCP) has been pummeled a lot and it has rebounded also but it’s still close to its 5 years low. I’ve been thinking about it since it started falling since end of October month, a bitching month many says :) ,when news of accounting issues start pouring out.

ARCP is a real-estate investment trust (REIT) that acquires, owns and operates single-tenant and multi-tenant commercial real estate properties and is world’s largest net lease REIT. It has in total 4,429 properties across 49 states in 94 industries with portfolio occupancy of99.8%, 99.1 million sq footage and total value of $23.8B. 

I’d written about ARCP in the Stocks watch list of October and Monthly Portfolio Update for November.

Now, ARCP has dropped so much that its current dividend yield is 11.12% and currently trading at $8.99closer to its 5 years low of ~$8. I think that current price provides an excellent entry point to investors. As a REIT, it must pay out 90% of its earnings. There are many other (m)REITs that I own: O, NLY, AGNC, OHI, PSEC, and even a REIT ETF from Vanguard: VNQ in my Portfolio, however, I still consider ARCP as a good bet for long-term investors.

Note that ARCP is still not completely out of woods yet and therefore carries a considerable amount of risk, if further issues are uncovered. Also, if the earnings and hence, dividends were to drop precipitously, I would reconsider my decision and might sell.

I’m making a Buffet’esque (BRK.B) move, a bold move for me, to start rolling my snowball faster, and adding another 50 positions on coming Monday.

Full Disclosure – I am long on ARCP.

What are your thoughts about ARCP. Are you going to buy or sell in near future?

Thanks for reading.

Monthly Portfolio Update – November 2014

The market in October swoon up and down with Dow Jones Average (ETF: DIA) dropping almost 7% in short time of couple of weeks but recovered very well  and then some. The moody market never goes straight up and have bowls of indigestion :)  but that is the most opportune time to invest. These drops indeed serve as buying opportunities for patient investors like us. 

I allocated extra capital in securities that I mentioned in Watch list for October:  American Realty Capital Properties Inc. (ARCP), General Electric (GE),  HCP, Inc. (HCP)AbbVie Inc. (ABBV), and Chevron Corp (CVX) with current dividend yields of 11.38%,  3.33%,  5.05%, 3.19%, 3.6% respectively. A lot has been written about ARCP whether it is a buy, sell or hold and for me, it is a hold as I’m looking at long term.

I initiated 25 positions in GE, 22 positions in HCP, added 50 positions in ARCP and 20 positions in Omega Healthcare Inc. (OHI). Also, initiated positions in Chevron Corp. (CVX) in DRIP account and added positions in ABBV, XOM, CLX, PG in my DRIP Portfolio. At current yields, GE, HCP and ARCP will add $22.00, $47.96 and $50.00 annually to my passive dividend income.

HCP was added in Roth IRA account where you do not pay any taxes when you them take out. This will push me closer to being financially independent in 12 years. The month of October was a busy month for me with a long shopping list in my cart :)

Kimberly-Clark Corp. (KMB) spun- off Halyard Health Inc. (HYH) to realize better their shareholder value and as a result of this, I received 2 positions in HYH and $10.96 for fractional shares.

Currently, I’ve got 4 Portfolios: DRIP, HID1, HID2 and a recently added Roth IRA account. New capital is distributed across these 4 portfolios in both taxable and tax-free accounts so that I’ve freedom to enjoy my passive dividend income whenever they are able to cover all my expenses. I also contribute towards 401K account in order to get employer’s match and help lower taxes as well.

My total portfolio value at the end of October is $50,350.85 which is 12.18% increase over last month of September Portfolio value of $44,881.98. This was mostly due to addition of positions in GE, HCP and ARCP and DRIPs in CVX, ABBV, XOM, CLX, PG. In this month of October, I crossed a very important and big milestone for me, i.e, crossing half-mark across a 6-figures portfolio.

Thanks for reading.

Full Disclosure: Long on the above mentioned securities.

How did your portfolio do in last month of October? Add new securities.

Dividend Income Update – October 2014

Its time for me to post dividend income earned from my portfolios: DRIP, HID1, HID2, & RothI enjoy sharing them as these passive dividend income provides me great inspiration and encouragement to keep chugging along and hopefully to the readers.

Wow, I scored a double hundred plus in total passive dividend Income: $244.91 to be precise, this was 7th time of receiving triple digit dividend income this year. This month alone, my dividend income was more than 244.98% compared to last year’s October. That’s awesome. It only shows the power of Dividend Income engine. I’m that much closer to being Financially Independent (FI) and living a life that I want to live, be independent and not have to rely on someone else. Isn’t that a powerful motivator!

Passive Dividend Income – October 2014

1. Dividend Re-Investment Plan Portfolio (DRIP) 
Glaxo SmithKline Plc. (GSK): $21.57
Kimberly-Clark Corp. (KMB): $15.02
The Coca-Cola Company (KO): $13.27
Altria Group, Inc. (MO): $27.80
Phillip Morris Intl, Inc (PM): $20.10

2. High Dividend Income Growth Portfolio 1 (HID1)
American Capital Agency (AGNC): $32.50
American Real Estate Cap (ARCP): $10.42
iShares Emerging Markets (DVYE): $7.61
Altria Group, Inc. (MO): $17.16
Annaly Capital Mgmt (NLY): $30.00
Realty Income Corp (O): $4.58
Prospect Capital (PSEC): $11.05
Pimco Corp & Opportunity (PTY): $13.00

3High Dividend Income Growth Portfolio 2 (HID2)
Altria Group, Inc. (MO): $13.48

4. Roth IRA
Vanguard Natural Res LLC (VNR): $7.35

Total Passive Dividend Income: $244.91

I want to own securities of Blue chip Aristocrats (companies with 25+ yrs of growing earnings) and Dividend Champions. Once the earned passive dividend income covers all my expenses, I will own my time as well and truly free from 9 to 5 tread mill.

I’d setup a goal of earning $1500.00 in total passive dividend income this year and so far have received $1442.83 which is 96.18% of target for this year. With 2 months remaining, I’ll surely hit that target :)

Thanks for reading.

How did your Dividend Income come along this month of October. On target?

Full Disclosure: Long in all above mentioned securities.

Weekend Reading – October 26, 2014

A learning mind is always open to new ideas, thoughts and endeavors in life and there is no frontier that is beyond human race. Here are some of the best articles that I enjoyed this week and they can sprout seeds of new thinking or reinforce existing ones.

1. Why would an Aerospace Engineer Want to be an Uber Driver by Financial Samurai
In this interesting post, Sam cites various reasons: make easy money, yeah ;) who does’nt want, diversify income, make more money in driving and tax benefits, mixing business with pleasure, talking to people and avoid loneliness. Had lot of fun reading it :)

2. Exposed: V-Shaped Recovery Malarkey by MoneyAndMarkets
Mike has an interesting take on the economic recovery and why markets suddenly dip and dap: algorithmic trading and central bank put speculation. It provides a fresh perspective, a good read!

3. Open fire on these Dividend Stocks by DivHut
Keith has really opened his fire ;) on some of the Firearms and Ammo dividend stocks: Alliant TechSystems (ATK), Olin Corp. (OLN), Sturm, Roger & Co. Inc. (RGR), National Presto Industries Inc. (NPK), and Hawaiian Electric Industries Inc. (HE). Need to ponder if I want to open my fire on these yet!

4. You can escape to financial freedom by TheEscapeArtist
TEA has an interesting take on achieving financial freedom and safe withdrawal rate (SWR) of 4% and how much is enough. I could not agree more that there is no magic formula and everyone needs are unique.

5. Is there value in Coca-Cola and IBM after big respective drops by DividendMantra
Jason wrote an excellent post on KO and IBM‘s value after their big drop in earnings. It details out pros and cons of these two great companies, later one, I’m owning in my own DRIP portfolio.

Did you like any other specific post or book that you have read recently and wish to inform readers of this blog as well? 

Have a good weekend and thanks for reading!

My Watch List for October 2014

I’m always looking out for good quality securities, and if they are under valued that’s great and if they yield high dividend income, even better! However, emphasis is owning quality blue chip companies to grow passive dividend income.

I’ve been pondering about following companies since some time. As soon as more capital becomes available, I’ll be gnashing my teeth in some of these great companies ;)

1) American Realty Capital Properties Inc. (ARCP)

ARCP is a real-estate investment trust (REIT) that acquires, owns and operates single-tenant and multi-tenant commercial real estate properties and is world’s largest net lease REIT. It has in total 4,429 properties across 49 states in 94 industries with portfolio occupancy of 99.8%, 99.1 million sq footage and total value of $23.8B. 

ARCP has a nice dividend yield of 8.65% that is paid out monthly and has a market cap of $10.50B. Its 52 week was $14.96 and currently trading at $11.56 which is close to its 52 week low of $11.54. Current price provides an excellent entry point to investors. As a REIT, it must pay out 90% of its earnings and a diversified portfolio, ARCP is a good bet as a long-term hold.  ARCP was also a recent buy by Dividend Mantra.

2)  General Electric Company(GE) 

GE was founded in 1892 by none other than famous Thomas A. Edison and is headquartered in Fairfield, Connecticut. GE is a huge multinational company and diversified across several major segments: energy, infrastructure, technology, capital, healthcare , etc. among others. GE is ranked as one of top Fortune 500 company with a market cap of $243.52B.

GE is trading at P/E ratio of 19.20 with a nice dividend yield of 3.63%. It touched a 52 week high of $28.09 and currently, trading at $24.27, almost close to its 52 low of $23.82. GE had run into rough weather in last recession of 2008 due to its financial division but it is on mend and on its path of becoming a stable company. At current valuation, its provides a good opportunity to investors looking for long haul.

With the market taking a dip, read handing you opportunities, there are few others that are under my radar: ABBV, HCP, CVX, YUM, and T.

Full Disclosure: I plan to purchase above securities in near future.

Are you also considering to purchase these securities in near future? 

Thanks for reading.