Introduction to the Portfolio Plan
I work within a framework of study and decision making for investing. An investing philosophy and mindset meets with priorities and a plan is now in place.
Philosophy = generally conservative long-term income and dividend growth investing.
Mindset = patient study open to value capital appreciation in the short term.
Plan = Equity plan 3% yield or higher within low risk high ranking organizations.
Re-balancing the portfolio can sometimes be an ongoing process as new opportunities present themselves. After reading a number of sources for investing and company research i.e. Seeking Alpha. My daily notes are translated into weekly watch lists for further study.
Here is a current study using stock screener variables for:
- Risk as defined by Beta rating
- Dividend Yield
- 5-Year Dividend Growth Rate
- Net Profit Margin
The first screen resulted with 24 organizations for consideration. With a mind toward the current portfolio the energy, financial and stocks that are already owned in the portfolio were removed arbitrarily today, for example, Johnson & Johnson, Mattel, McDonald's and others. But you get the idea.
Five investing ideas resulted from the screen and subsequent filtering Cleco Corp (CNL), Clorox (CLX), General Mills (GIS), Meridian Resources (VIVO) and Rogers Communications (RCI). All are interesting options; some have been on my watch list for consideration in the past, for example CLX and GIS.
After the raw numbers are reviewed the top performers in each of the variables are noted (see below). If we would stay with our equity income and dividend investment philosophy along with fair value and low risk we have some good choices to further study.
5 Year Dividend
This list is diverse to say the least with a number of industry segments represented. I now would take a look at the business model from company annual reports to supplement the research of other analysis organizations like Standard and Poor's and Reuters.
This further study I hope will reveal the hidden value or the competitive advantage that each organization holds.
A Brief Organization Summary of the Business Model
Cleco Corporation is a public utility holding company, which holds investments in several subsidiaries. Utilities are of interest and have a place in an income portfolio but this utility is pretty narrow serving only in the Louisiana area.
The Clorox Company is a manufacturer and marketer of consumer and professional products. You have to like the diversification and the distribution networks that this giant has developed.
General Mills, Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. The company is also a supplier of branded and unbranded food products to the food service and commercial baking industries. Recent acquisitions and alliances make this old line favorite a strong contender.
Meridian Bioscience, Inc. is a fully-integrated life science company. The company is engaged in the developing, manufacturing, selling and distribution of diagnostic test kits. Again as I have mentioned in previous articles (see below and in profile) there is a lot to like in the healthcare-related organizations on the cutting edge advances in technology and research.
Rogers Communications Inc. is a diversified public communications and media company. This Canadian company presents the opportunity for some international exposure and diversification in the portfolio and holds a significant market share in entertainment and wireless technologies.
Often from my research I use the value approach (i.e. position within industry, industry position within the current economy, opportunity for capital appreciation, current price performance).
Of the five companies that are a part of this study all have fair competition in their own marketplace with the possible exception of RCI being the dominant provider of services in Canada. And GIS' recent acquisitions and joint venture activity with Nestle, Haagen Das and CPW internationally with cereals and yogurts is of interest because of the opportunity for market position with other products.
I am intrigued enough by Rogers Communications and General Mills that further consideration is given.
As a result then the likely candidates to be added to my portfolio are RCI and GIS.
Note: Securities prices and yields quoted are current as of September 20, 2013.
Disclaimer: These are only personal opinions and all readers should do their own research. Readers are accountable for investment decisions and trades.