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.
Here are my recent buys in the month of August 2015.
1) Kinder Morgan Inc. (KMI)
Kinder Morgan is the largest midstream and the fourth largest energy company in North America, own an interest or operate approximately 80,000 miles of pipelines, and 180 terminals. In most of businesses, they operate like a giant toll road and receive a fee.
The Kinder Morgan family of companies comprise of 4 entities: Kinder Morgan, Inc. (KMI), Kinder Morgan Energy Partners, L.P. (KMP) (largest publicly traded pipeline Master Limited Partnerships in America), Kinder Morgan Management, LLC (KMR) and El Paso Pipeline Partners (EPB). Combined enterprise value of Kinder Morgan companies is approx. $105B.
KMI is trading at P/E ratio of 47.20 with a healthy dividend yield of 6.01% and Market Cap of $71.5B. It ran up to $44.71 at its 52 week high and currently trading at $32.63, more than 25% lower and an excellent price point. There is some amount of risk involved in it but, I consider this pipeline company akin to an utility company and a good long-term keep.
I bought KMI at $33.00 on 8/20 and added 30 positions in this company, making it overall 40 positions in taxable account. It will add $78.40 of passive income on a forward annual basis.
2) Orchids Paper Products Company (TIS)
Orchids Paper is an integrated manufacturer of common use paper products like paper towels, paper napkins and bathroom tissue. The company is the bulk producer of tissue paper rolls and converts them into finished products that are consumed by all of us. It serves its paper products in both domestic and international markets at various price points.
TIS has a nice dividend yield of 5.78% and a market cap of $248.9M. It went up to$30.00 at its 52 week high, currently trading at $24.24, almost 20% lower.
I added 40 positions in TIS on 8/21 at $24.68 in my taxable account, making up total 55 positions as of now. It will add $56.00 of passive income on an annual basis.
3) Unilever plc (UL)
Unilever is a multinational company that operates in the food, refreshments, home and personal care products segments that range from nutritional foods to ice creams, soaps, shampoos and household care. It offers over 400 brands that includes Dove, Rexona, Lux, Lipton, Brooke Bond, Knorr, Axe, Hellmann’s, Persil, SunSilk, Blue Band, Magnum, Pureit, Suave, Omo, Wall’s Ice Cream, Comfort, Marmite, Surf. It was founded in 1885 and headquartered in London, UK.
UL is trading at P/E ratio of 18.50, a dividend yield of 3.25% and Market Cap of $122B. It has ran up to $46.19 at its 52 week high and trading at $40.35, more than 10% lower and gives a good opportunity to add or initiate positions at current valuations in my opinion.
I added 15 positions in UL on 8/20 at $42.00 in my taxable account, making up total 30 positions as of now. It will add $19.65 of passive income on a forward annual basis.
Full Disclosure: Long on above mentioned securities.
Thanks for reading.
What do you think about these buys?