Wednesday, March 14, 2018

Recent Buy: Home Depot Inc. (HD)

I knew I was going to be able to make at least two purchases this month, but I wasn't sure when that would be. Well because of continued market turbulence, it was relatively early in the month. It's just too good of an opportunity to pass when the market  takes a dip. When the market goes down it provides two excellent opportunities. The first opportunity is that the dividend yields all go up. The second opportunity is that the return on principal is much greater. I'm a long term investor so I'm not too worried about the price of a stock as long as it continues to pay and raise dividends. 

However, being able to buy a stock at a discount will provide me a margin of safety in the future. 

If the stock doesn't perform well and I need to sell, then I won't have lost as much. Perhaps I won't lose anything and come out even all because I was able to buy at a discount in the first place. Long term investors should welcome market weakness with open arms. Unless it is the apocalypse or world war 3 there really shouldn't be cause for concern. The market will go back up and if you are able to take advantage of the weakness then your money will do twice as well once it does. 

On March 8th I was able to buy 6 shares of Home Depot Inc. (HD) at $176.80 a share. This adds $24.72 of yearly dividend income to my portfolio!

Some quick facts about Home Depot:
  • EPS of 7.39
  • P/E of 24
  • Current yield of 2.33%
  • EPS growth as follows
    • 1 year - 14.7%
    • 3 year - 16.2%
    • 5 year - 19.8%
  • Revenue growth as follows
    • 1 year - 6.7%
    • 3 year - 6.7%
    • 5 year - 6.2%
  • Dividend growth rate as follows
    • 3 year - 23.7%
    • 5 year - 25.1%
    • 10 year - 14.7%
  •  Dividend payout ratio at 55%

Even with such a mature company, Home Depot has continued to grow at an impressive rate. Their dividend has also grown with it as well and there is plenty of room for it to continue to grow in the future. 

Home Depot has been on my list forever and it rarely ever takes a dip to allow for a buying opportunity. This is an incredible company with staying power. They provide essential products for home improvement. They are the world's largest home improvement retailer. If you need to do any work on your house or apartment where do you go? You could order items on Amazon, but what if you needed it right away? Companies and contractors building and remodeling homes can't afford to wait for products to ship even if its a day or two. They also sell a lot of large items that would be too expensive to ship.

A company like this is not going away anytime soon. Building/remodeling homes is an incredible industry that will be around for a long time. 

Let me know what you guys think! What have you been able to buy with recent market weakness?

Friday, March 9, 2018

Recent Buy: Exxon Mobil (XOM)

I've been able to continue to take advantage of market weakness and sector weakness as well. It's hard to say that I want the market to go down, but it really benefits one long term when it does. Price and yield are inversely correlated so if the market goes down all the dividend yields go up. This means my money is worth more and will earn me more dividend income. I've been able to save up some money this month and will be able to purchase stock at least two times.

My first purchase this month was 14 shares of Exxon Mobil (XOM) at $73.90 a share. This adds $43.12 to my yearly dividend income!

I have been watching Exxon fall for quite some time now and figured I had to pick up some more. Exxon is the largest of the world's big oil companies. This is a great company making tons of money off a vital resource that will be around for awhile. Alternative energy is coming, but it is going to take awhile before we are able to completely switch off of oil. Also, Exxon will have the resources to easily switch into another energy solution if need be. 

Exxon is now one of my larger positions at 51 shares. I really don't think you can go wrong with such a great company. Their price has been hit hard lately, but they will eventually recover. It is hard to find such great companies paying you a 4% yield so I had to pick up some more. 

Some quick facts about Exxon:
  • This is a company with revenues of $237 billion in 2017 and an estimated $298 billion in 2018
  • EPS of 3.23 (They have been hurt by the price of oil, but they are slowly recovering)
  • Dividend Yield of 4.15%
  • 3 year dividend growth rate of 4.3%
  • 5 year dividend growth rate of 7.0%
  • 10 year dividend growth rate of 8.4%
  • P/E of 22.91
Now their dividend growth rate may not be stellar over the next year or two, but the current yield will make up for that at this point. 

They will continue to increase their efficiency and remain one of the largest companies in the world. Oil is not going away anytime soon and even if it does they will be well suited to switch to the next energy resource. 

Let me know what you guys think! What have you guys been buying?

Thursday, March 1, 2018

Portfolio Update - February 2018

February was a brutal month for investors and even as I write this post the market continues its trend downward. However, I'm a long term investor and this is just short term noise. It actually prevents some great buying opportunities and I don't mind when the market is down. If I can invest during periods of weakness then I can increase my purchasing power. 

This will all lead to me being able to retire even earlier than expected. I welcome market weakness because I don't plan on selling stocks and dividends and price are inversely correlated. When the price goes down the dividend goes up!

This month I saw my net worth decrease by $7,527.52 or -3.70%

This is all due to the market having a rough month and the value of my stocks decreasing. I'm hoping to deploy some fresh capital (about $2k) in the market this month and hopefully I can capitalize on the market weakness. 

On February 6th, 2018 I was able to purchase 13 shares of AFLAC Incorporated (AFL) for $83.90 a share. This was a day when the market was down and I believe this was a good price for a great dividend company. They have been on my radar forever and I decided to pull the trigger to add this great company to my collection. Overall, this will increase my yearly dividend income by $27.04

This was my first month ever that I've seen my net worth actually decrease. It is hard to see your money decrease, but I can't complain given that it has steadily increased for the past 4 years now. I look forward to investing while the market is down and capitalizing on the current weakness. Even if the market continues to fall I will just continue to buy!

Let me know what you guys think! How did you guys do in February?