My DG Portfolio

[KowboysUp]

Hello all, this is my first post here but I've been participating in dividend growth investing for almost a year and a half now.

I just turned 27 recently, so I'm definitely on the young side for a DG investor, but I know that this is nothing but a positive, allowing years for the wonders of compounding to take effect.

Unfortunately, after I had accumulated over $8,000 of initial purchases, very carefully picking entry prices in stocks like AFL, MO, CSX, RDS.B, ABT, ABBV, KMR, and a couple more, I can't remember, I decided to buy a house, and things got ugly.

After my banker initially told me we were all good, our down payment was enough, they turned around at the last minute and said that it wasn't enough, and if we didn't add to it immediately, we would lose the many thousand each we had already put down AND the house. So, I did what I had to do, and liquidated all of my holdings except for a few fractional shares of MO and CSX in September 2013.

Since then, I've been working on putting the pieces back together. Of course, when I bought most of the original shares was during the first debt ceiling battles in Washington, so prices were lower than what I've had to buy at recently, which has stung.

Anyway, here's where I'm at so far. Keep in mind, I'm young, and just getting started (for the second time), amounts will be small to begin with:

AFL- 15.17 shares bought @ an average of $66.64
CSX-35.13 @ $28.41
MO-.22 (left over) @ $35.2
CVX- 8 @ 117.89
O-26.11 @ 38.07
AAPL- 2.01 @ 519.52

So in there I've got an E-REIT, financial services, transportation, an oil major, and tech/consumer in AAPL. I've also got five large caps, including two of the most mega of the mega caps in CVX and AAPL. Obviously, there is a long way to go as far as diversification. I would like to hold many more stocks in my portfolio just for safety's sake, and because it feels better to have lots of smaller dividends rolling in regularly than a few big ones every three months.

In upcoming months and years, because of my age, I hope to acquire some DG stocks that have more of a growth and risk aspect, as I feel I am completely lacking that category at the moment.

At the top of my growth wishlist are: ROIC, ORIT, TD, V and FCX (I consider FCX growth because the PEG under .5 gives it a lot of potential to pop)

I'm also hoping to add a tobacco position, either more MO or some PM, and some stalwarts on my watch list include TGT (hoping to catch the bottom of this temporary credit-security related blip), WMT, ABT, JNJ, UNH, KO, MCD, WFC, OHI, and GE.

like so many others with markets near all-time highs, I'm having a difficult time finding favorable prices for a lot of these companies, but I'm especially enamored with names like ROIC, ORIT, TD, and FCX, as I love a lot of the fundamentals there, and think the market will eventually realize the true value of those firms' earnings.

I would LOVE some input, so let me know what you think everyone!

[Kerim]

Welcome KowboysUp! Is that a reference to the Dallas Cowboys (this Redskins fan asks warily).

That is a rough experience with the house; sorry to hear about that. I can only imagine how hard it is to start over from scratch, especially having to buy in at higher prices. But as you observe, you are young and have lots of time to rebuild. One day, you'll be getting more in annual dividends than the entire value of that initial portfolio, and this will be an amusing anecdote from your early years rather than a recent and painful experience.

Given the size of the portfolio, I would not worry too much right now about diversification. I'd put most or all of my investing money into your best ideas -- the dividend growth stocks that you want that are offering the best value at the moment. With the market at fresh highs all the time, that is easier said than done, but just glancing at your list, my own opinion is that TGT and PM are fairly priced, right now. Perhaps not the bargains there were recently, but still...

[Dividend Watcher]

KowboysUp, welcome to our cabal.

I guess it comes with old age -- for starters I'd just caution you to build up an emergency fund along with your portfolio. They don't call a house a "money pit" without a reason.

As to the portfolio, I concur with Kerim. With my wife's portfolio, I almost started from scratch about 5 years ago and we're finally getting it somewhat diversified. There was a long time with only a few holdings and patiently reinvesting the dividends. Don't let impatience get the best of you.

Go with your best ideas that are not overvalued. Keep your expenses down and be patient. It's the hardest thing to do when you're young.

Looking forward to hearing about your journey. You'll do well.

[KowboysUp]

New Additions

I thought it was a good time to update the portfolio, since its been almost half a hear since my initial update.

In that time, the market has been very high as you all know, so I've been adding to my cash reserves, making sure the emergency fund is well-funded, and even paying extra principle on mortgage payments rather than buying new stocks.

After the end of last week, and a general downward trend in a few of the stocks I'm watching, I decided to finally jump in today, and I made a purchase several months ago before the S+P got so toppy.

First, on 3/11 I picked up ROIC, a promising REIT that operates grocery-store-anchored properties on the West Coast, mostly in California but increasingly in Oregon and Washington as well. I was initially drawn to the company because of its PEG ratio under 1. On further research, though, I found there was much to like about this company that is run by a seasoned veteran of the industry with reams of experience taking small-cap REIT's and making them successful.

Since that purchase, ROIC has been up 2.9%, which I'm sure lags the market, and it payed its sizable 4.137% dividend once in June.

My second addition during this period was T, picked up today at what I hope is a pretty decent price of $34.61 following the sell-off related to Sprint throwing in the towel on its plan to buy T-Mobile.

I believe T will easily dominate both of those names, and, as with many, many other industries, consolidation is coming to the industry one way or another, whether the FCC likes it or not. I do not believe a behmoth with a moat the size of T's will be the one getting bought in said consolidation. Of course, I'm also pretty convinced that the pie will just keep getting larger and larger for many years, as I am certain that more people could continue using more data for years to come, and the giants like T and VZ will surely find a way to make boatloads of profits during that time period.

With ROIC and T bought, one riskier, more speculative pick, and one of the most stalwart possible, I will likely continue down the path of picking up some risk with higher growth opportunities like ROIC, as well as stalwarts like T. Currently, I have GE, PG, KO and GILD at the top of my wish list, I'll let you figure out which one is for growth.

Well, that's the update for now. Like I said, I was slow to fund the portfolio, sometimes putting in only very small amounts when the market was high. The market is still high, but it's a little bit less so, and I still don't see any downward catalyst for the market in the near term besides international black swans (Ukraine) and the end of QE, which I suspect is priced in already. I do not see rising rates happening in at least the first half of '15, if they happen at all next year.

[Roadmap2Retire]

(08-06-2014, 03:30 PM)KowboysUp Wrote: New Additions

My second addition during this period was T, picked up today at what I hope is a pretty decent price of $34.61 following the sell-off related to Sprint throwing in the towel on its plan to buy T-Mobile.

I believe T will easily dominate both of those names, and, as with many, many other industries, consolidation is coming to the industry one way or another, whether the FCC likes it or not. I do not believe a behmoth with a moat the size of T's will be the one getting bought in said consolidation. Of course, I'm also pretty convinced that the pie will just keep getting larger and larger for many years, as I am certain that more people could continue using more data for years to come, and the giants like T and VZ will surely find a way to make boatloads of profits during that time period.

With ROIC and T bought, one riskier, more speculative pick, and one of the most stalwart possible, I will likely continue down the path of picking up some risk with higher growth opportunities like ROIC, as well as stalwarts like T. Currently, I have GE, PG, KO and GILD at the top of my wish list, I'll let you figure out which one is for growth.

Well, that's the update for now. Like I said, I was slow to fund the portfolio, sometimes putting in only very small amounts when the market was high. The market is still high, but it's a little bit less so, and I still don't see any downward catalyst for the market in the near term besides international black swans (Ukraine) and the end of QE, which I suspect is priced in already. I do not see rising rates happening in at least the first half of '15, if they happen at all next year.

I just initiated a position in T myself. Overall, I am bullish on the sector - and there are plenty of opportunities for growth for behemoths like T, VZ and VOD. (shameless plug: Recent Buy - AT&T Inc)

GILD seems to have caught the eye of a few ppl here in this forum - and I think the company will do well, but I'd be wary in turbulant market times such as these - where biotech stocks could possibly take a beating. Personally, as a DGI, I am more interested in AMGN and its starting to look at a dividend growth stock...I know they are big in renal drugs which are covered by Medicare - hence the stellar revenues and earnings. I still have to read up a lot more before I make a decision.

You have some great stocks on the watchlist, KowboysUp. Happy investing.

[Dividend Watcher]

I've been watching AMGN also and should have bought when it was at $111. I almost put GILD in the wife's portfolio during the Great Recession but thought I should start building her dividend growth portfolio as a foundation first.

T's nice but a slow grower. Reinvest the dividends for a few years though and then you'll surprised how quickly it builds up.