Thursday, September 29, 2016

Another Round Out Buy


26 September 2016: Bought 44 shares of UNP at $94.40 per share.

Founded in 1862, Omaha, Nebraska-based Union Pacific Corporation (NYSE:UNP) operates through its principal operating company, Union Pacific Railroad Company. The company operates the largest public railroad in North America, with 32,000 miles of track linking 23 states in the western two-thirds of the United States. UNP hauls coal, industrial products, intermodal containers, agricultural goods, chemicals, and automotive products. UNP owns a quarter of Mexican railroad Ferromex.

UNP is a Dividend Challenger with a 9-year streak of annual dividend increases. The company pays quarterly dividends of 55¢ per share in the months of March, June, September, and December. At my buy price of $94.40, the stock yields 2.33%.

Wednesday, September 28, 2016

Recent Sell: Texas Instruments Incorporated

Texas Instruments, Inc. (NASDAQ:TXN) designs, makes and sells semiconductors to electronics designers and manufacturers worldwide. The company operates mainly through two segments, Analog and Embedded Processing. It markets and sells products through a direct sales force and through distributors. TXN was founded in 1930 and is headquartered in Dallas, Texas.

I transferred shares of TXN into DivGro in December 2015. At the time, I listed several reasons for liking TXN, including the stock's yield of 2.62% and a 10-year dividend growth rate of 30%. Since then, TXN's yield has dropped to 2.19% on strong share price performance.

I'm very happy with my investment in TXN. The stock has performed very well, returning about 26% on an annualized basis in the 3 years I've owned shares. However, I've been preparing DivGro for options trading and I'm sacrificing this position for that goal.

Tuesday, September 27, 2016

Boosting Ford's Performance with Options


Founded in 1903 and based in Dearborn, Michigan, Ford Motor Company (F) manufactures and distributes automobiles worldwide. The company has 67 plants across the world and offers vehicles under the Ford and Lincoln brand names. Ford sells its products through distributors and dealers, as well as through dealerships to fleet customers. The company provides vehicle financing products through a wholly owned subsidiary, Ford Motor Credit Company LLC.

I own 600 shares of Ford at an average cost basis of $12.94 per share. As a dividend growth investor, I like Ford for its relatively high yield. I also like the stock because it allows me to boost that yield with covered calls. Ford is a popular stock for options trading – in August, the average daily volume of Ford options totaled nearly 7,200 contracts, about 4,500 of which were call contracts.

Sunday, September 25, 2016

9 Dividend Increases: September 19-23, 2016

 Summary

  • Companies can only increase their dividends regularly if earnings grow sufficiently.
  • I like monitoring dividend increases for stocks on my watch list of dividend growth stocks, because I consider such stocks to be candidates for further analysis.
  • Recently, 11 companies on my watch list decided to increase their dividends, including one of the stocks I hold in my portfolio.

Friday, September 23, 2016

Blogroll Renovations

Welcome to my 400th blog post! 

I have an extensive blogroll at DivGro. Maintaining the blogroll is a challenge, as blogs come and go. I rely on new bloggers to tell me about their new blog. Rarely, though, does a blogger plan to stop blogging. It just kind-of happens. And because it just happens, there's no way for me to know when it happens...

It is quite eerie to read the final post on abandoned blogs. Did the blogger have even a little sense that the post would be their last? As I get older, I think back about the last time I did various things, like seeing school friends or even distant family. At the time, I had no inkling that that would be the last time I would see them!

Anyway, enough about nostalgia. The fact of the matter is that I have to revisit my blogroll frequently to fix things, otherwise the page would become less useful fast!

Wednesday, September 21, 2016

11 Dividend Increases: September 5-16, 2016

 Summary

  • Companies can only increase their dividends regularly if earnings grow sufficiently.
  • I like monitoring dividend increases for stocks on my watch list of dividend growth stocks, because I consider such stocks to be candidates for further analysis.
  • Recently, 11 companies on my watch list decided to increase their dividends, including one of the stocks I hold in my portfolio.

Tuesday, September 20, 2016

Options Update: September 2016

Last month, I wrote my first article in a new monthly series about options trades in DivGro. These articles will follow option expiration Friday, usually the third Friday of the contract month.

As I mentioned last month, readers not interested in options can just skip these articles.

Personally, I'm interested in boosting my dividend income with options. By selling calls against stocks I own (covered calls) or selling puts on stocks I'd like to own at a preferred price (naked or cash-covered puts), I can collect option premiums and so boost my dividend income.

Wednesday, September 14, 2016

Stock Analysis: Hormel Foods Corporation

Hormel Foods Corporation (HRL) is a multinational manufacturer and marketer of consumer-branded food and meat products. The company sells its products through sales personnel, as well as through independent brokers and distributors. Customers include retailers, hospitals, nursing homes and marketers of nutritional products. HRL was founded in 1891 and is based in Austin, Minnesota.

HRL was the top ranked stock in the August edition of my 10 Dividend Growth Stocks series of articles on Seeking Alpha. The stock made the list again in the September edition, this time in second place. The stock is a Dividend Champion with a track record of 50 consecutive years of dividend increases and a 10-year dividend growth rate of 14.4%. HRL pays quarterly dividends of 14.5¢ per share in the months of February, May, August, and November.

Tuesday, September 13, 2016

DivGro Pulse: September 2016

Today I'm starting a new monthly article series. My goal is to monitor DivGro's health as a dividend growth portfolio – taking the proverbial pulse to determine if there are areas of concern that require attention.

My monthly review articles will continue to present a summary of the past month's activities along with a snapshot of DivGro's current state, including metrics such as projected annual dividend income (PADI), average yield on cost (YoC), percentage payback and projected annual yield.

In contrast, the pulse articles will be strategy focused. I'll provide updated fair value estimates for each stock. Comparing a stock's current price to its fair value estimate will help inform investment decisions. I'll also provide various charts to visualize recent performance, including one plotting current price relative to the 52-week trading range.

Wednesday, September 7, 2016

Home Run #6

I'm happy to report my sixth home run stock! Recall that I call a stock a home run stock when it passes the 100% profit mark taking total return into account.

While my goal with DivGro is to build a growing dividend income stream, its fun to see some stocks perform well enough to become home run stocks. These stocks present dividend growth investors with some tricky questions. Are the stocks suitable for further investment, or are they now overvalued? Is it appropriate to increase the average cost basis of a position by buying more shares?

When I look at my portfolio, I see many stocks that have gone up significantly after I bought shares. Buying more shares would increase my average cost basis, something I've tried to avoid so far. But is increasing average cost basis necessarily a bad thing?

Monday, September 5, 2016

10 Dividend Growth Stocks For September 2016

Summary

  • I rank a selection of the CCC dividend growth stocks every month. The top 10 ranked stocks are great candidates for further analysis. 
  • The CCC list is an invaluable source for dividend growth investors. Every month I use different screens to trim the list before doing a preliminary ranking.  
  • For the top ranked stocks, I do a final ranking using additional data and assign a 7-star rating.
  • This article reveals the top 10 ranked stocks for September, as well as their ratings.

Saturday, September 3, 2016

10 Dividend Increases: August 22-September 2, 2016

 Summary

  • Companies can only increase their dividends regularly if earnings grow sufficiently.
  • Monitoring dividend increases for stocks on my watch list helps me identify candidates for further analysis.
  • Recently, 10 companies on my watch list announced dividend increases, including 1 of my DivGro holdings.

Thursday, September 1, 2016

Monthly Review: August 2016

Over the past couple of months I've been positioning DivGro for option trading. To do so, I increased the number of shares of several positions to 100 or multiples thereof. My goal is to boost dividend income by selling covered calls against several of the stocks I own, collecting option premiums in return.

I closed five positions this month and increased my holdings of three positions to 100 shares each, readying them for option trading. I also initiated a position in Cisco Systems, Inc (CSCO), a great candidate for option trading!

DivGro's projected annual dividend income (PADI) decreased further this month. Nevertheless, I'm on schedule goal-wise and I'm confident to reach my goal of $12,000 before year's end. Good news is that I've achieved my goal of earning $10,800 for 2016.

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