Monthly Archives: July 2014

Weekend Reading – July 27, 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.

Buffet and Pickens Love This Bargain Energy Stock By Street Authority
This is an interesting article by Marshall where he talks about Buffet’s Berkshire Hathaway (BRK.B) focus on an energy company: Suncor Energy (SU) and how this could be a $1 trillion dollar sector opportunity, besides the familiar Buffet’s love for Coca-Cola (KO) and Wells Fargo (WFC) 🙂

Frugality: The New Fanciness By MMM
Ever green MrMoneyMustache explains how Frugality is new Fanciness before it was like… they are attempting to show off their wealth for the benefit of all the fine ladies around here. There could be no better reason than that, hey-hey 🙂 , just kidding for a sec, we are frugal.It is a great read and I thoroughly enjoyed it!

Building A Snowball By Dividend Mantra
In this article, Jason has beautifully explained building a growing snowball and could not agree more as I’ve been talking about Snowball effect since long time, where a small ball of snow (a small initial dividend buys more shares) that is rolling down hills, gathers more snow (increasing dividends due to more shares) with ever-growing speed (due to growing earnings) and becomes a self-sustaining machine that can support your rich lifestyle. Its a great read as always.

I blamed my wife for our messy house, I was wrong for many reasons By The Washington Post
This was a hilarious post and thought it would be a fun and mind provoking read for loving spouses 😉 Do not blame me if I was wrong either. Hey, honesty is always the best policy 🙂

Full Disclosure: Long on securities as mentioned above.

Thanks for reading.

My Watch List for July 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) 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 14.00 with a nice dividend yield of 2.69% and market cap of $442.80B. Its 52 week high was $104.61 and currently trading at $102.73, close to its highest level. 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) 🙂

2) 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 20.30 with a healthy dividend yield of 4.57% and Market Cap of $31.44B. It ran up to $63.39 at its 52 week high and currently trading at $58.65, almost 7.5% lower. With the acquistion of LO, RAI will occupy a dominant position in growing menthol based products and therefore, potential for growing earnings and dividend income.

3) Deere & Company (DE)

Deere & Company manufactures and distributes agricultural, construction and forestry equipment worldwide. The company was founded in 1937 and has headquarter in Moline, Illinois. It has growing dividends for last 11 years and compares favorably with its main competitor: Caterpillar Inc. (CAT).

DE is trading at P/E ratio of 9.60 with a good dividend yield of 2.74% and Market Cap of $31.88B. Its 52 week high was $94.89 and currently trading at $87.73, almost 7.7% lower. Due to growing population and diversified foot print across various geographies, I consider it a long-term prospect and also owned by Oracle of Omaha, Warren Buffet 🙂

DE was one of the recent buy by Dividend Mantra as well.

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 – June 2014

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

Wow, I received triple digit total dividends this month of June: $164.70 to be precise. This is 4th time of triple digit dividend income this year. As compared to last year’s, it was almost 667.30% more. That’s awesome, my friends. It only shows the power of Dividend Income engine. I’m that much closer to being Financially Independent (FI), live a life that I want to live, be independent and not have to depend on someone else or social security, if it’s even there.

I want to own securities of Blue chip Aristocrats (companies with 25+ yrs of growing dividends) and once the earned passive dividend income covers all my expenses, I’ll own my time as well like a free bird :) Think about it: you can travel around world exploring beautiful exotic culture or even explore blue lagoons and white beaches, play golf ;) or simply relax and have a power to make a difference in someone’s life and do charities.

Passive Dividend Income – June 2014 

1. Dividend Re-Investment Plan Portfolio (DRIP) 
ConocoPhillips (COP): $17.73
McDonalds Corp (MCD): $13.95
Wal-Mart Stores, Inc. (WMT): $9.92

2. High Dividend Income Growth Portfolio 1 (HID1)
American Real Estate Cap (ARCP): $6.25
BP Plc  (BP): $11.70
ConocoPhillips (COP): $10.35
Realty Income Corp (O): $4.56
Prospect Capital (PSEC): $11.04
Pimco Corp & Opportunity (PTY): $13.00
iShares Mortgage RE (REM): $29.17

3High Dividend Income Growth Portfolio 2 (HID2)
Vanguard Hi Dividend (VYM): $8.21
Vanguard REIT Index ETF (VNQ): $10.66
Vanguard Utilities ETF (VPU): $9.08
iShares Select Dividend ETF (DVY): $9.08

Total Passive Dividend Income: $164.70

Thanks for reading.

How did your Dividend Income come along this June as compared to last year’s June.

Full Disclosure: Long in all above mentioned securities.

Monthly Portfolio Update – June 2014

I allocated extra capital in securities that I wrote in Watch list for June: Kinder Morgan Inc. (KMI) and Vanguard Natural Res LLC (VNR), with current dividend yields of 4.71% and 7.98% respectively, and later one distributes monthly, we’ll happily love those 🙂

I bought 30 positions  in KMI and 35 positions in VNR. At current yields, these 2 securities will cumulatively add $138.60 annually to my passive dividend income. These were added in Roth IRA account where you do not pay any taxes when you them take out. This will take me closer to be financially independent in 12 years and travel around the world in exotic and beautiful places and shake some legs as well 😉

This Roth IRA account would serve as an insurance towards government’s propensity to tax hard-working citizens and beat the crap out of them 🙂  Thanks to the ballooning budget deficit, I see miles long red ink over there and a small amount in these accounts is highly desirable, and what I call a responsible act to save our skin.

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.

Thanks for reading. Have a Happy Independence Day!

How did your portfolio perform in June ? Any interesting thing occurred in your portfolio.