08-19-2014, 04:06 PM
First of all, welcome to the forum!
First question is what amount do you plan on using for future purchases, and how many positions do you plan to build your portfolio with. 5? 10? 20? 50?
For example, if you plan on building on $1000 increments in the future and plan to start out building up to 10 positions, I would buy 5 or 6 with the initial cash and then add positions as new money becomes available. This allows you to stay fairly equal weighted as new positions are added.
If you are thinking of buying less frequently more in the $2000 to $2500 range then it may make sense to just buy 2 or 3 initially.
As for your watch list, here are some quick comments as I see things.
T - Love the current yield and bought the stock recently.
PM - Going through a slow period here with currency issues and I would consider it fairly valued at this level. (I am long)
MO - A bit overpriced by historical standards, but a great long term position. (I am long)
CVX - Fairly valued here and I think with a few big projects wrapping up could be headed for higher growth in the next couple of years. (I am long)
GE - Fairly valued and with expected increased buybacks due to financial spinoff and sale of appliance business the near term dividend increases could be higher than expected. (I am long)
GM - Seems attractive when looking at the yield and expected growth rate, but auto stocks typically blow up every 5-10 years and end up slashing dividends. Too risky for me.
F - See above.
JNJ - At the high end of fairly valued. I would wait for a pullback into the 3% yield range. (Do not own)
TGT - Attractive entry if you think growth returns in coming years. Trading with a historically high yield of around 3.6%. (Added to my position recently)
WAG - Fairly valued and recently announced acquisition of Alliance Boots. Dividend growth announcement was disappointing, but somewhat expected due to high costs for acquisition. Long term great hold in my opinion due to macro trends with baby boomers. (I am long)
(KO) - Recent slow growth but have been aggressive in buying stakes in GMCR and MNST. Staple for many dividend growth investors. Appears fairly valued here. (I am long)
PG - Slightly above fair value but hasn't had any earnings growth since 2009 resulting in a higher payout ratio. I expect lower dividend growth than other options in the next few years. (Do not own)
MCD - Going through a rough patch trying to find growth in a changing landscape. Fairly valued by historical norms but trading at a yield rarely seen for the stock. (I am long)
INTC - Has frozen the dividend for the last 9 quarters so not a consideration for me in a DGI portfolio. (Do not own)
MSFT - Slightly above fair value but a cash cow company with a great dividend growth rate. (I am long)
PFE - Has attractive yield but has had negligible earnings growth over the last decade and cut the dividend by 50% in 2009. There are better prospects in my opinion. (Do not own)
AAPL - About to enter a new product cycle and trading at reasonable valuation even after recent run-up. (I am long)
First question is what amount do you plan on using for future purchases, and how many positions do you plan to build your portfolio with. 5? 10? 20? 50?
For example, if you plan on building on $1000 increments in the future and plan to start out building up to 10 positions, I would buy 5 or 6 with the initial cash and then add positions as new money becomes available. This allows you to stay fairly equal weighted as new positions are added.
If you are thinking of buying less frequently more in the $2000 to $2500 range then it may make sense to just buy 2 or 3 initially.
As for your watch list, here are some quick comments as I see things.
T - Love the current yield and bought the stock recently.
PM - Going through a slow period here with currency issues and I would consider it fairly valued at this level. (I am long)
MO - A bit overpriced by historical standards, but a great long term position. (I am long)
CVX - Fairly valued here and I think with a few big projects wrapping up could be headed for higher growth in the next couple of years. (I am long)
GE - Fairly valued and with expected increased buybacks due to financial spinoff and sale of appliance business the near term dividend increases could be higher than expected. (I am long)
GM - Seems attractive when looking at the yield and expected growth rate, but auto stocks typically blow up every 5-10 years and end up slashing dividends. Too risky for me.
F - See above.
JNJ - At the high end of fairly valued. I would wait for a pullback into the 3% yield range. (Do not own)
TGT - Attractive entry if you think growth returns in coming years. Trading with a historically high yield of around 3.6%. (Added to my position recently)
WAG - Fairly valued and recently announced acquisition of Alliance Boots. Dividend growth announcement was disappointing, but somewhat expected due to high costs for acquisition. Long term great hold in my opinion due to macro trends with baby boomers. (I am long)
(KO) - Recent slow growth but have been aggressive in buying stakes in GMCR and MNST. Staple for many dividend growth investors. Appears fairly valued here. (I am long)
PG - Slightly above fair value but hasn't had any earnings growth since 2009 resulting in a higher payout ratio. I expect lower dividend growth than other options in the next few years. (Do not own)
MCD - Going through a rough patch trying to find growth in a changing landscape. Fairly valued by historical norms but trading at a yield rarely seen for the stock. (I am long)
INTC - Has frozen the dividend for the last 9 quarters so not a consideration for me in a DGI portfolio. (Do not own)
MSFT - Slightly above fair value but a cash cow company with a great dividend growth rate. (I am long)
PFE - Has attractive yield but has had negligible earnings growth over the last decade and cut the dividend by 50% in 2009. There are better prospects in my opinion. (Do not own)
AAPL - About to enter a new product cycle and trading at reasonable valuation even after recent run-up. (I am long)