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.

Here are some of my recent buy in final week of December 2015:

1) Diageo plc (DEO)

Diageo plc is in drinks business and produces beverage alcoholic beverages like Irish whiskey, gin, vodka, rum, beer and spirits, wine, tequila and liquors across 200 sites in 30+ countries. Its premium brand include Johnnie Walker, Smiroff, Captain Morgan, Guinness, Baileys, etc. Company operates across diverse geographical segments: North America, Europe, Latin America & Caribbean, Africa, and Asia Pacific. Diageo plc was founded in 1886 and headquartered in London, UK and has a current market cap of $68.3B.

DEO has a nice dividend yield of 3.85% and trading at $109.07, dropping from 52 week high of $122.51, almost 10% drop.

I bought 5 positions in DEO on 12/31 at $109.28 in my taxable account. It will add $21.35 of passive income on an annual basis.

2) Eaton Corp plc  (ETN)

Eaton Corp plc is a power management company providing energy-efficient solutions for electrical, hydraulic and mechanical power. The company operates across 4 segments: electrical systems and services, hydraulics, aerospace and vehicle. The company was founded in 1916 and is headquartered in Dublin, Ireland. ETN has a current market cap of $24B.

ETN has dividend yield of 4.14% and trading at $52.04, dropping from 52 week high of $73.82, more than 25% drop. I initiated 10 positions in ETN on 12/31 at $52.34 in my taxable account. It will add $22.00 of passive income annually that I do not need to work for.

3) Facebook, Inc. (FB)

I typically do not own companies that do not provide any dividend, however, I made an exception for Facebook, Inc (FB). I think that at some point FB could become a great dividend growing company, just like Apple, Inc (AAPL) first initiated dividends in 2012 and since then, has grown it at a fast clip.  I initiated 10 positions in FB on 12/31 at $105.56 in my taxable account.

Full Disclosure: Long on above mentioned securities.

Thanks for reading.

What do you think about these buy?

4 thoughts on “Recent Buy

  1. No surprise I like 2 of your 3 buys. While FB, AMZN and the like had an awesome 2015 I find it difficult paying up for these sky high valuations. SBUX is a growth stock that also has a high valuation but at least you are getting paid to wait. As always, I enjoy these updates. Interesting to see where others put their money.

    1. Hi DivHut,

      Glad that you like the 2 buys: DEO and ETN. Regarding buying FB, it was a tough decision since FANG stocks have been on tear in 2015 and now, BAGEL stocks. I can understand your likes as these FANG stocks have been way too overvalued in our opinion. However, my decision helps to diversify towards some tech stocks. I’ve been thinking to buy FB since some time when it was $25 and regretting that I did not made the move then, but, its never too late 🙂

      Thanks for stopping by and commenting!

  2. Diageo is a great buy. Eaton also looks good, and I’m very interested in what methods you use to identify and select a stock – what set these two apart?

    Facebook will always be a controversial pick, especially since they don’t currently have a dividend. I bought 100 shares – well, my broker convinced me to – at about $28, so I’m happy, but I keep a close eye on it. Very difficult to see a future past 10 years for FB, unless they introduce an actual product line.

    1. Hi Mike,

      Great question. There are several things I look before narrowing down a company. My criteria for choosing any security is decent yield: 3% or close, not inflated P/E ratio meaning not at extreme valuation, fair dividend growth in last 5 yrs, top line revenue growth among others. Besides these parameters, I look at my exposure to various market segments within overall portfolio and try to balance: rule of thumb: 10% each for 10 different segments, however, some segments like consumer staples have more stability over long term and like to over-weight on them: I chose DEO and ETN as these satisfy many of these criteria and provide entry to different segments for better balance in my portfolio.

      I admit that I made an exception to my criteria for Facebook and it was a mistake. I’ve rectified it by completing exiting this position and likely not buying till it satisfies at-least some of above criteria. Having said that, your buy $28 is still a good idea as compared to close to $98 now. Completely agree, its tough to see 10 yrs down now but, it holds promise due to movement towards mobility and FB developing a wide moat around it, we’ll see.

      Thanks for stopping by and commenting.

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