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 was not expecting to pull another buy trigger this month again, however, I bought following security in the month of Jan, 2015 in my DRIP Portfolio. This buy was probably brought forward from Feb so, my cash is running low right now however, we will see what happens in Feb, especially if Mr Market is ready to sell its goodies 🙂
1) International Business Machines Corp. (IBM)
International Business Machines Corp. is top provider of computer products and services, founded in 1911 as Computing Tabulating Recording Company (CTR) through a merger of 3 companies: Tabulating Machine Company, International Time Recording Company & Computing Scale Company, renamed as International Business Machines (IBM) in 1924, and is headquartered in Armonk, New York. IBM operations are categorized primarily into 5 segments: Global Technology Services (GTS), Global Business Services (GBS), Systems & Technology, Software, and Global Financing. IBM has too many innumerable achievements to its credits, 5 Nobel Prize winners, 6 Turing Awards & 5 National Medals of Science, 12 research labs throughout world, and an enviable record for most patents created for 22 consecutive years.
If you’ve noticed carefully and following my blog, my 4 Portfolios do not have any technology or financial companies so far due to cataclysmic events that occurred in 2000 and more recently in 2008. However, there are few technology company like IBM that I’ve been eyeing since some time. Being a fan of Buffet, it was odd that all of my portfolios did not contain IBM since it is one of the largest holding of Berkshire Hathaway (BRK.B). Finally, I decided to add in my DRIP portfolio.
IBM is trading at very reasonable P/E ratio of 12.90 with a decent dividend yield of 2.87% and Market Cap of $151.72B. It traded at $199.21 at its 52 week high and currently at $153.31, is fairly valued in my opinion and I’m going to make it a long term hold.
I bought IBM at $151.85 on 1/21 and initiated 3.2 positions in this company. It will add $14.05 of passive income on an annual basis that I do not have to earn and work for. I consider it as a superb addition to my Portfolio, though, there are some challenges for IBM to negotiate reg restructuring.
Full Disclosure: Long on IBM.
What do you think about this buy? Do you consider it a good buy or planning to add to your portfolio.