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?

8 thoughts on “My Recent Buy- September 2014

  1. Thanks for sharing your recent buys with us. We have a lot of overlap which is a good thing. I also added to my GIS in September. Not particularly cheap but after a disappointing earnings report I decided to add. I used to own RAI many years ago and sold after it went up. I already had PM and did not want two tobacco companies in my portfolio. Look forward to your next update and October buys.

    1. Hi Keith,

      Glad to hear overlap and adding GIS, which I think is a solid company and long term hold. I’ve been eyeing RAI since some time and pulled trigger this month. I own MO, RAI, and PM to hedge my bets.

      Thanks for stopping by!

      Best wishes.

  2. Some great additions here PIM. I am actually considering exiting LO and avoiding RAI as a result of the buyout. I’d rather leave my tobacco money in PM for the international exposure and avoid some of the challenges of the US market where the new RAI would ultimately have most all of its exposure.

    Best of luck and looking forward to your dividend income report!

    1. Hi W2R,

      Glad to hear from you. I hear you regarding RAI and LO. However, I would like to keep RAI for adding exposure to e-cig market, PM for international market and MO for being biggest brand and if you do not mind adding BTI into mix 🙂 due to their rich dividend yields. Keep up the good work over there.

      Thanks for stopping by and commenting!

      Best wishes.

    1. Hi SA,

      You cannot go wrong with XOM and CVX, which is another energy company in my stock watch list. You gotta love those yields, my friend.

      Thanks for stopping by!

      Best wishes.

    1. Hi DD,

      Totally agree. Valuations of most companies have been going higher and only recently, we had a small dip.

      You can not go wrong with XOM and it a great energy play. Glad to be a fellow shareholder.

      Best wishes.

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