Tuesday, August 23, 2016

Recent Buy: Royal Caribbean

There comes a point in the history of a portfolio where it has to move past the safer bets and move on to picks that are outside of the normal channel or realm. We move to a point where bets are on and the market and humanity will guide our next move forward. That being the case, I’ve differed to the judgment of my grandparents.

I know this isn’t always the immediate gut reaction when it comes to investing but sometimes it’s a great move when you’re stuck on what to dip your portfolio into next. I have been feeling a bit jaded lately and that has spilled over into having very little to write about. This has also made it tough to think of companies to evaluate. That’s why I moved to the preference of a generation that is removed from my own to see from a different angle what I may not be seeing.

One could argue that I should have seen their answer coming but it was an immediate gut response from them that I should look at cruise lines. In the past I have hurried past these stocks as they seemed all to cyclical and as we are in an upswing, overpriced. Regardless, I paid them a look – Carnival, Royal, and Norwegian. All three stocks actually showed way more promise than I had initially thought. One clear winner however emerged from the pack. That winner was Royal Caribbean. Let me share why.

Wednesday, August 3, 2016

Dividend Income: July

It's the beginning of another month and that means that it's time to tally the dividend payments from the previous month. All in all, it was a great month. I find that pretty much any time there is a payment incoming from AT&T (T), I can expect a fairly decent payment. It definitely helps boost the confidence moving forward that the strategy of dividend investing is a good strategy.

Where it may still not seem like a whole lot at a total of $28.25 for a whole month of dividends, it actually is a big enough amount to do something with. Hell, for a good portion of my portfolio, the stock price per share is less than that. That means that this last month provided for me the opportunity to add even one more share (theoretically) to the portfolio. With one more share there comes one more payment of dividends that further propels the snow ball forward.

I also want to remind myself with another month past that it is important to not bench mark your portfolio based on other investor's portfolios. Even though this can sometimes be a great motivator for future success, it can also give an unfair view of things as investing in dividends can be a very skewed curve when graphed out. The more dividend payments coming in, the faster the trend line goes up so it does not accurately represent a slow and steady trend upwards but more an increasing stream that will eventually become a roaring river. I just have to keep my eye on the prize moving forward and have faith that the small stream of income I've built will eventually pick up more and more speed. Anyways, here is the breakdown for the month:

July Dividend Income

RAI - Reynolds American Inc. - $5.88
STAG - STAG Industrial - $1.74
GE - General Electric - $5.75
T - AT&T - $14.88

Total July Dividends: $28.25

Thursday, July 28, 2016

Recent Buy: Reynolds American Inc.

I talked about it and I wrote about it on my blog here just a few days ago. Just as a predicted, the price would be too good to pass up on Reynolds American Inc. That being the case, I had to pick up a few more shares for the Dividend Scythe portfolio. I was able to pick up a total of 17 more shares at $50.11/share which came to a total purchase price of $861.94.

This addition added a sizable amount of projected dividend income to the portfolio. At $1.68 per share in yield, this added a total of $28.56 to the projected annual dividend income. With this addition, the total projected annual dividend income moving forward is a solid $362.92. This should propel the portfolio much further as it will add further capital to future investments and further grow the snow ball.

This acquisition also helped me pass a major milestone. The portfolio is now officially over $10,000! It's taken a little while to get here but it's nice to see it finally hit five figures. I have my increased saving habits and better financial handling skills to thank for this milestone. Without them I would still very likely be in the four figure range and very likely still at the bottom or mid range at that!

I know this isn't a huge milestone compared to some who have been investing for a long time but for me this milestone is huge. It shows that I am capable of making the money add up. I look forward to the newer, bigger snow ball effect that will be seen in the future. Onward and upward is the way to go!

Tuesday, July 26, 2016

Chance to Buy More Sin Stock

As earnings were just released for Reynolds American, a cry was heard across the land as numbers missed for one of the first times in a very long time. Investors have started to run away from the golden pony that they once swore their allegiance to. This however is not the case for some that have their eyes on the longer game.

Yes, earnings were released for Reynolds American. Yes, they did miss what was expected of them. No, the stock is not suddenly a turn around in the wrong direction.

One must make sure to keep a level head in times such as these. It's easy to get caught up in the quick nightmares that the market decides to deal out. Many investors are keeping their eyes on single stocks and large caps, waiting for this so called recession to hit us. I do admit that I myself am in this boat but do I think that it has come and started with Reynolds American? Hardly.

The initial expectation for the stock was right in line for what they should have been expected to reach. However, they did have an acquisition that made their EPS drop just be a hair. Whenever this occurs, it is natural to assume that earnings would feel the hip check that is money moving from one to another to grow for the future. There is of course also talk about movement in the company with BAT - the Brits! This however I feel is a good thing. More heads in the game, more control, more money.

With that said, I feel that there is now another buying opportunity into the stock. As I have just moved my funds into the account to trade for the month of July, I may have to turn my eyes away from a new company acquisition and instead move to up my stake in Reynolds American so that I can profit more from the upswing that is almost certainly to come by either a take over or further expansion.

Sunday, July 24, 2016

Savings Down, Spirits Up!

Some months are better than others. That month is not this month. I've just finalized the budget from June so I could see how much could be transferred to the various accounts that the wife and I hold and let's just say that this month was a little slim on the transfers. That's life though I suppose.

We can't go backwards in time currently so I have to simply accept that we had a bad month and analyze why and how we came to be where we are. Once the analysis is complete, we can attack the problem and hope to change some habits so that moving forward we do not find ourselves in such a position. That being said, there were quite a few problems this last month when it came to saving money.

First off, we were part of a wedding. Normally this doesn't mean too much but my wife was the matron of honor. This means taking the bride to be out on her bachelorette party (funded by us) and of course hosting the bridal shower, and not be forgotten is the task of buying the necessities such as a dress for each occasion and bringing food as well. Couple this fact with the fact that June was my birthday month where I bought an electric guitar (used - that way I could save money and get more for my purchase) and also that I was a groomsman for the very same wedding and you've got some money flowing out of the bank account.

Friday, July 15, 2016

Buying Useless S#$%

In our lives, we can find ourselves buying a lot of stuff. We buy groceries, gas for our cars, electricity for our homes, and yet a lot of us still find a lot of spare cash to buy things that are for all intents and purposes very expensive paper weights. In this case, I'm talking about big ticket items, small ticket items, and generally anything that we spend money on and only use a few times.  In my own case I'm talking specifically about things such as my Xbox One.

Where the purchase was initially made because I thought that it would provide a good hours of entertainment, it instead has become a $450 paper weight that is effectively used for the same purpose as a $100 Apple TV display unit. Granted, I thought initially that I would be using the Xbox One for a more gaming oriented goal but that has seldom been the case. 99% of the time that I have spent on that thing since I have purchased it has been streaming video or watching DVDs one it. It's hardly what I paid the difference in price for.

Wednesday, July 13, 2016

Watch List: Cal-Maine Foods Inc.

If you haven't heard of them, Cal-Maine Foods Inc. (CALM) is in the egg business. They produce, sell, and distribute the eggs in a variety of different forms. A company has to be able to do so in this day in age. That means distributing cage free, organic, brown, and other forms of eggs to make sure that all market points are hit for the different customers that desire eggs. They do so under the names of Egg-Land's Best, Land O Lake, Farmhouse, and 4-Grain. Although the most recent review by analysts suggests a hold on the stock, I instead believe that the stock is a hard buy. Here's why:

First off, the current price is right at the bottom of the 52-week low. It currently trades for $45.53/share which is right above the 52-week low of $39.60. The current price would yield a 3.86% dividend with a very good margin for safety as the beta is a comfortable 0.84. As this is the case, there should not be much movement coming from it. Couple this with the very safe 32.06% payout ratio and you've got a dividend payer that is hardly in trouble of cutting their dividend.