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.

Dividend Income Update – September 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.

I received close to double hundred bucks in total passive dividend Income: $178.95 to be precise, this was 6th time getting triple digit dividend income this year. This month alone, my dividend income was 359.84% of last Sept. Sweet! Of-course, I’m starting from a small base. But, it only shows the power of Dividend Income engine.

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 like a free bird :)

Passive Dividend Income – Sept 2014 

1. Dividend Re-Investment Plan Portfolio (DRIP) 
ConocoPhillips (COP): $19.81
McDonalds Corp (MCD): $15.26
Wal-Mart Stores, Inc. (WMT): $10.91
Exxon Mobil Corp. (XOM): $4.38

2. High Dividend Income Growth Portfolio 1 (HID1)
American Real Estate Cap (ARCP): $6.25
BP Plc  (BP): $11.70
ConocoPhillips (COP): $10.95
Realty Income Corp (O): $4.57
Prospect Capital (PSEC): $11.05
Pimco Corp & Opportunity (PTY): $13.00
iShares Mortgage RE (REM): $30.85

3High Dividend Income Growth Portfolio 2 (HID2)
Vanguard Hi Dividend (VYM): $8.15
Vanguard REIT Index ETF (VNQ): $10.34
Vanguard Utilities ETF (VPU): $9.74
iShares Select Dividend ETF (DVY): $9.02

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

Total Passive Dividend Income: $178.95

I’d setup a goal of earning $1500.00 in total passive dividend income this year and so far have received $1197.92 which is close to 80% of target for this year. With 3 months remaining, I’m pretty close to hitting that target which would be wonderful feeling when it happens :)

Thanks for reading.

How is your Dividend Income coming along and are you getting close to hitting your targets?

Full Disclosure: Long in all above mentioned securities.

My Recent Buy- September 2014

I’m always looking for securities that are fairly valued, have a decent dividend yield(3% to 6%) and have a fairly long history of paying dividends consistently for 10 years or more. However, there could be some cases for exceptionally good company or a strategic buy for a very long term.

I’ve bought following securities in this month of Sept’ 2014:

1) Reynolds American Inc. (RAI)

Reynolds Amercian Inc. is the parent company of R.J. Reynolds Tobacco, American Snuff Comp., LLC, Sante Fe Natural Tobacco, Niconovum USA, Inc. and R.J.Reynolds Vapor. RAI was founded in 1875 and is the leading company for cigarettes and tobacco products, next only to Altria, Inc. (MO), after acquisition of Lorilland company (LO) is completed. 

RAI is trading at P/E ratio of 19.60 with a healthy dividend yield of 4.60% and Market Cap of $30.98B. It ran up to $63.39 at its 52 week high and currently trading at $58.31, almost 8% lower and provided an attractive entry point. I bought RAI at $57.62 and initiated 18 positions in this company. It will add $48.24 of passive income on an annual basis that I do not have to earn and work for :)

2) General Mills, Inc. (GIS)

General Mills, Inc. is one of the world’s largest food companies, marketing in more than 100 countries and located in Minneapolis, Minn., USA. It started its journey with 2 four mills in the 1860’s and currently, has an excellent portfolio of brands like Cheerios, Pillsbury,  Yoplait, Green Giant, Betty Crocker, Nature Valley, Old El Paso and Haagen-Daz. Annual sales are in tune of $18B, 60% coming from US and rest from global markets, making is geographically diversified.

GIS is trading at P/E ratio of 18.80 with a good dividend yield of 3.26% and market cap of $30.36B. Its 52 week was $55.64 and trading at $50.28, almost 10% lower than all time high, however, it can not be considered cheap like many other securities. But, market has moved quite high in last 2 years and all boats have been raised high, including GIS. I always wanted to own GIS but had missed boat several times and so, pulled the trigger for additional 10 positions. This will add $32.60 annually to my overall passive income.

3) ExxonMobil Corp. (XOM)

ExxonMobil started its humble beginning in 1859 when Colonel Edwin Drake and Uncle Billy Smith drill the first successful oil well in Titusville, Pennsylvania which led to the oil gold rush. Since then, ExxonMobil has evolved into the world’s largest publicly traded oil and gas company, largest refiner and marketer of petroleum products, and it’s chemical division ranks among the world’s largest.

XOM is trading at P/E ratio of 12.20 with a nice dividend yield of 2.89% and market cap of $406.98B. Its 52 week high was $104.61 and currently trading at $95.43, almost 8.9% lower than its 52 week high. ExxonMobil’s dividend payments to the shareholders have grown at an average annual rate of 6.3% over the last 31 years. However, considering long-term growth prospective of XOM in oil & gas arena, I consider it an excellent prospect and found in Warren Buffet’s holding via Berkshire Hathaway Inc. (BRK.A /BRA.B) :)

Also, small sum of money was added to positions in Abbvie Inc. (ABBV) and The Clorox Company (CLX) in my DRIP portfolio.

Thanks for reading.

Full Disclossure: Long on RAI, XOM, GIS, ABBV and CLX.

Did you initiate any new securities or add some securities to your portfolio?

Dividend Income Update – August 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.

I received almost hundred bucks in total passive dividend Income: $98.92 to be precise, this was 5th time of getting triple digit dividend income this year. This month alone, my dividend income was close to 25% as compared to last year’s total. Sweet! It only shows the power of Dividend Income engine. I’m that much closer to being Financially Independent (FI).

I want to own securities of Blue chip Aristocrats (companies with 25+ yrs of growing earnings) and once the earned passive dividend income covers all my expenses, I will own my time as well like a free bird :)

Passive Dividend Income – Aug 2014 

1. Dividend Re-Investment Plan Portfolio (DRIP) 
Abbvie Inc. (ABBV): $3.15
The Clorox Company (CLX): $5.13
The Proctor & Gamble Company (PG): $20.22

2. High Dividend Income Growth Portfolio 1 (HID1
American Real Estate Cap (ARCP): $6.25
Realty Income Corp (O): $4.56
Omega Healthcare Inc. (OHI): $15.30
Prospect Capital (PSEC): $11.04
Pimco Corp & Opportunity (PTY): $13.00

3. High Dividend Income Growth Portfolio 1 (HID2 None

4. Roth IRA
Kinder Morgan Inc. (KMI): $12.90
Vanguard Natural Res LLC (VNR): $7.35

Total Passive Dividend Income: $98.92

I’d setup a goal of earning $1500.00 in total passive dividend income this year and so far I’ve received $1018.97 which is 67.93% covered. With 8 months out of 12 months: 66.67% of the year having passed by, I’m pretty close, as close it gets ;) and hitting my target which is an exhilarating fuzzy feeling.

Thanks for reading.

How is your Dividend Income coming along and are you meeting your target?

Full Disclosure: Long in all above mentioned securities.