09-26-2014, 02:34 PM
I did a little portfolio shuffling today.
Sold CLX
Sold AFL
Bought AMP
Bought TUP
Clorox I sold because I felt that it was getting well past fair value with the recent run-up. I think its trading about 10% above fair value and with a yield down to 3.1% I felt good about locking in my gains and increasing my yield.
Aflac I sold because of stagnating earnings and dividend growth. The company is facing tough headwinds due to demographics and a weak currency in Japan. The yield is just 2.5% and there isn't enough growth for my tastes to make up for it.
Ameriprise I bought to replace Aflac and feel that what I gave up for in yield I will more than make up for with earnings growth and capital appreciation. I give up 0.6% in yield but get a company growing at 15-20% over Aflac that was growing around 5%.
Tupperware I bought for the higher dividend yield over Clorox and for an expected double digit earnings/dividend growth. The stock also appears to be undervalued with a forward PE under 12. The stock currently yields 3.9% and management has stated a policy of a desired 50% payout ratio. With earnings projected to grow in the low double digits going forward, I expect the dividend to increase in a similar fashion.
When its all said and done I pick up 0.2% in blended yield and an uptick in earnings growth that should double from around 6% to 12%+.
Thoughts?
Sold CLX
Sold AFL
Bought AMP
Bought TUP
Clorox I sold because I felt that it was getting well past fair value with the recent run-up. I think its trading about 10% above fair value and with a yield down to 3.1% I felt good about locking in my gains and increasing my yield.
Aflac I sold because of stagnating earnings and dividend growth. The company is facing tough headwinds due to demographics and a weak currency in Japan. The yield is just 2.5% and there isn't enough growth for my tastes to make up for it.
Ameriprise I bought to replace Aflac and feel that what I gave up for in yield I will more than make up for with earnings growth and capital appreciation. I give up 0.6% in yield but get a company growing at 15-20% over Aflac that was growing around 5%.
Tupperware I bought for the higher dividend yield over Clorox and for an expected double digit earnings/dividend growth. The stock also appears to be undervalued with a forward PE under 12. The stock currently yields 3.9% and management has stated a policy of a desired 50% payout ratio. With earnings projected to grow in the low double digits going forward, I expect the dividend to increase in a similar fashion.
When its all said and done I pick up 0.2% in blended yield and an uptick in earnings growth that should double from around 6% to 12%+.
Thoughts?