Monthly Archives: December 2014

Recent Sale

I normally do not sell the securities that I’ve purchased in my Portfolios as I’m into it for a very long haul and buy them only after careful consideration, unless, there are some exceptional circumstances as below:

  1. A significant drop or total elimination of dividends
  2. A display of inappropriateness by the company, be it management, or otherwise
  3. An apparent fraud or even outright cooking of accounting books

On Nov 23, I’d published a post where I made a bold move to buy additional 100 positions in American Realty Capital Properties, Inc. (ARCP) and I’d felt at that time that the management would be able to sort out all issues soon and it will be a great comeback story. However, things took a turn for worse for the company with the departure of top management including CEO, CFO and COO. If loss of one senior executive is not bad enough to indicate troubles within a company, loss of top layer executives was a hammer blow in my opinion in any aspects of running a company smoothly. In order to right this ship, it could take a long time to fix the accounting issues, settle lawsuits and other potential undiscovered issues, longer than I can wait for 😉

Initially, I thought of selling all my 175 positions, however, I finally settled to sell 100 positions and kept remaining 75 positions until further scrutiny. If the hoped for turn-around does start to appear on the near horizon, it will reward me handsomely and if there are appearances of further deterioration in the health of this company, I may completely exit my remaining 75 positions.

I sold 100 positions at $8.08 on Dec 17 and this reduces my dividends by $100.00 for next year. I’ll be looking to buy other high quality securities to add to my total passive income. The seriousness of this sale can be gauged from the fact that this is my only single post on sale for this year of 2014.

What do you think about my sale ? Did you sell all or kept some positions for potential turn-around?

Full Disclosure: Holds remaining 75 positions in ARCP.

Thanks for reading.

Recent Buy

I’m looking for companies 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 Dec. 2014:

1) BHP Billiton, Plc (BBL)

BHP Billiton is one of the largest mining and resources company in the world, headquartered in Melbourne, Australia with more than 100K employees located in Brazil, Australia, Mozambique, South Africa, Asia among over 25 countries. Billiton has origin back in 1851 as a tin mine company on a small island Billiton (Belitung) in Indonesia while BHP (Broken Hill Proprietary) began its journey in Broken Hill, Australia in 1885 and two merged in June 2001 as BHP Billiton.

BBL is trading at P/E ratio of 8.4 with a healthy dividend yield of 5.72% and Market Cap of $115.42B. It has ran up to $71.44 at its 52 week high and currently trading at $43.36, almost 40% lower and provides an excellent entry point.

I bought BHP at $45.00 and initiated 20 positions in this company. It will add $49.60 of passive income on an annual basis that I do not have to earn and work for 🙂 I consider it as a good addition to my Portfolio and in it for a long haul.

BBL was also a recent buy of DividendMantra who has been averaging down on it, Write2Reality, DivHut, DividendGrowthJourney, and others.

2) BP Plc. (BP)

BP is one of the world’s largest integrated oil and gas (O&G) companies that provides fuel for transportation,  petrochemical products and lubricants with 80K+ employees in about 80 countries. BP was founded in 1889, incorporated in 1909 and has current headquarters in London, the United Kingdom. 

BP is trading at P/E ratio of 15.3 with a juicy dividend yield of 6.16% and Market Cap of $118.96B. Its 52 week high was $53.48 and currently trading at $38.98, almost 35% lower than its 52 week high. BP definitely has challenges to overcome including oil spills related liabilities and 90% payout ratio, which is high for my comfort. However, with big correction in oil that just happened and considering long-term, BP is fairly valued, has good dividends and provides an attractive entry point.

I bought BP at $39.00 and added 20 positions to my existing positions, averaging down on my cost basis. It will add $48.00 to overall passive dividend income on an annual basis.

What do you think of my recent purchases? Did you add one of these or similar to BBL and BP.

Thanks for reading.

Full Disclosure: Long on BBL and BP.

Monthly Portfolio Update – December 2014

The market in November rallied with Dow Jones Average (ETF: DIA) gaining almost 5%, as compared to 7% drop in October; volatility is becoming the name of the game. The moody market never goes straight up or down but over long period, direction of market is up and will rewards patient investors like us.

The month of November was a busy month for me with a long shopping list in my cart :) , though, I was not expecting to spend some of my Thanks Giving holidays time this way. But, hey, I’ll gladly take the offer from Mr. Market whenever he is in a mood to give me his goodies at fire-sale prices.

I allocated extra capital in energy securities:  Royal Dutch  Shell plc (RDS.B), ConocoPhillips (COP), BP plc. (BP) and REITs: Realty Inc. (O), and American Realty Capital Properties Inc. (ARCP) with current dividend yields of 5.9%,  4.68%, 6.62%,  4.73%, and 11.12% respectively. A lot has been written about ARCP whether it’s a buy, sell or hold and for me, it is a hold for me as I’m looking at long term, though, my opinion may change if some other issues are uncovered.

I initiated 20 positions in RDS.B, added 10 positions in BP, 5 positions in COP, 25 positions in O, 50 positions in ARCP,  dollar cost averaging down my original prices. Also, initiated positions in Verizon Comm. (VZ) in my DRIP Portfolio. At current yields, RDS.B, BP, COP, O, ARCP will add $75.20,  $12.00, $14.60, $55.00 and $50.00, with gross total amount of $206.80 annually to my passive dividend income. This will push me closer to being financially independent in 12 years.

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 November is $56,219.56 which is 11.65% increase over last month of October Portfolio value of $50,350.85. This was mostly due to addition of capital in RDS.B, COP, BP, O,  ARCP and DRIPs in VZ and XOM. In the last 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.

Dividend Income Update – November 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 scored a single hundred plus in total passive dividend Income: $163.97 to be precise, this was 8th time of receiving triple digit dividend income this year. This month alone, my dividend income was more than 41.38% compared to full last year’s. 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 – November 2014

1. Dividend Re-Investment Plan Portfolio (DRIP) 
Abbvie Inc. (ABBV): $5.83
The Clorox Company (CLX): $7.10
The Proctor & Gamble Company (PG): $27.04

2. High Dividend Income Growth Portfolio 1 (HID1
American Capital Agency (AGNC): $11.00
American Real Estate Cap (ARCP): $10.42
General Mills Inc. (GIS): $8.20
Realty Income Corp (O): $4.58
Omega Healthcare Inc. (OHI): $26.00
Prospect Capital (PSEC): $11.06
Pimco Corp & Opportunity (PTY): $13.00

3. High Dividend Income Growth Portfolio 2 (HID2: None

4. Roth IRA
Deere & Comp. (DE): $7.20
Kinder Morgan Inc. (KMI): $13.20
HCP, Inc. (HCP): $11.99
Vanguard Natural Res LLC (VNR): $7.35

Total Passive Dividend Income: $163.97

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 at the beginning of this year and already received $1606.80, smashing targeting comfortably :), though, I started out with a small base. So, we will see next year how the growth turns out.

Full Disclosure: Long in all above mentioned securities.

How did your Dividend Income do this month of November. Getting close to your target for this year?

Thanks for reading.