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Q4 2014 Update: Core Changes In My Whistler Income And Growth Portfolio
- The primary goal of my income and growth portfolio is to produce a reliable and growing income stream that beats inflation.
- The secondary goal is capital preservation and maximizing total return.
- Could taking (at least some) profit on more volatile companies in sectors such as Energy and Mining be a good strategy for income investors to maximize total returns?
Launching The Buy The Sector Dips Portfolio: The Energy Sector Dip
- Instead of waiting for a 20% to 50% market crash, a do-it-yourself investor can allocate some capital in the 20% Energy Sector dip.
- Instead of investing in the Energy Sector ETF to mimic the performance of the index, the Buy the Sector Dips Portfolio chooses a selected few from the ETF’s top holdings.
- What we end up with is the highest quality companies and a higher yield. In fact, for this portfolio, we get 27% more income than buying the ETF.
A Gem In The Energy Industry: Buying Vermilion Energy For Growth And Income
- Vermilion Energy is a mid cap oil and gas producer with stellar historical returns. From 10 years ago, a $10k investment grew 6.5x to $75k (25% annual growth).
- Vermilion Energy's total return beats all its Mid Core peers in the 1-year, 3-year, 5-year, 10-year, and 15-year periods.
- Between 2013 and 2016, the company plans to grow production by 55% and to grow funds from operations by 60%.
- Analysts estimate a one-year total return of 18% to 21% at Friday's closing price.
- Since 2003, Vermilion Energy has paid a continuous monthly dividend, currently yielding 3.9%. Its decreasing payout ratio since 2003 led to 2014's dividend raise and the potential for future dividend growth.
Oil Companies Sensitive To The Oil Price Decline And Those That Are Not
- Oil price has declined about 25% since June 2014.
- Let’s see which oil companies were more sensitive to the oil price decline.
- Let’s see which oil companies weren’t as sensitive to the oil price decline.
- Now maybe a good time to start dollar-cost averaging into quality oil companies for a higher starting income after the price decline.
Reviewing The Core Holdings In My Whistler Income And Growth Portfolio: Q3 2014 Update
- This is a close-up view to analyze the core holdings of my income and growth portfolio.
- Generally, my core holdings have good credit ratings, and a trend of earnings growth and dividend growth.
- This review allowed me to identify improvement areas to strengthen the core of my portfolio.
Gift From Mr. Market: What To Buy In The Big Oils' 10% Pullback
- Mr. Market is near an all-time high, but the Energy sector has experienced a pullback.
- The Energy sector's 10% pullback is an opportunity for income investors sitting on cash to buy on the dip.
- Buy more shares with the same amount of capital for a higher yield. You can increase your income stream now.
- This article will outline high-quality big oil, blue chip companies and deeper value plays for initial research.
I Am A Dividend Growth Investor. I Want Dividends, Growth, And Dividend Growth
- Dividends received can be used, or can serve as additional capital to buy more shares.
- Growth is the holdings’ steady price appreciation led by business growth, and having bought shares at proper valuations.
- Dividend growth comes from growing businesses that are earning more and giving a higher payout every year.
Dividend Growth Investing: It's Not The Number Of Shares, But The Invested Capital That Matters
- The amount of capital you have in a company is more important than the number of shares you have in a company.
- The more the capital you have in a dividend stock, the higher the amount of dividends you receive.
- Therefore, it’s better to think in terms of how much capital you are using to buy your shares, instead of how many shares you are buying.
- The above make sense only given that you buy shares at proper valuations, as it goes without saying the lower price you pay, the higher income you get.
- Thinking in terms of how much capital you have allocated to each holding also helps with risk management by thinking of stock allocation and income allocation.
How Do I Stick To The Slow, But Sure Process Of Dividend Growth Investing?
- I started with small number of shares that paid only a few bucks every 3 months.
- Slowly, building a portfolio of these dividend growers, the few bucks grow into possibly a few hundred bucks in a year.
- Tracking the growth of the dividend helps me stay the course. I will show you my simple way of tracking the dividend growth.
- The income is growing at a rate much faster than inflation to maintain purchasing power.
What I'm Doing With My Kinder Morgan Shares As A Dividend Growth Investor
- Kinder Morgan has a projected annual dividend of $2.00 per share in 2015.
- That's a projected dividend yield of 5% at today's price of $40.
- The dividend is expected to grow by at least 10% annually from 2015 to 2020.
- $17B of growth projects for the next 5 years has already been identified.
- Looking to scoop up some shares between $36 and $39.
Qualcomm Priced At 16% Discount With Double-Digit Growth
- Qualcomm is undervalued with 16% discount around the $73 price level.
- Strong results from Q3 earnings release with raised FY2014 EPS guidance.
- There continues to be a strong need for Qualcomm's products as its revenue continues to grow in the double digits.
- I added to my Qualcomm position at the end of July. Now it's even cheaper.
When To Add To An Existing Dividend Growth Holding That Has Been Advancing
- As a self-directed dividend investor, it’s essential to keep emotions in check when investing and making a trade.
- When you feel like selling, maybe it is time to buy more shares instead.
- The best time to buy a high quality company is when it's at the right valuation.
- F.A.S.T. Graphs helps with checking the valuation of a company.
- Even when the share price is at fair valuation, it could go lower. Dollar-cost averaging into a position is psychologically more bearable than buying in a big lump sum.
Q2 2014 Update: My Whistler Income And Growth Portfolio
- Managing my own income and growth portfolio requires periodic reviews.
- From actual decisions that I make in the portfolio, I can get a better feel for my temperament.
- Part of my quarterly review is to check sector allocation to determine if too much capital is allocated to one specific sector.
- Another part of the review is to check dividend allocation to ensure I'm not getting too much dividends from one specific sector.
- These updates are kind of like a journal which shows exactly what I did - for better or for worse.
Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation
- I bought Raytheon at a 10% discount this week.
- At the end of Q1 2014, it had a backlog of $32.2B.
- It is a high quality company with a current yield of 2.6% and expected dividend growth of 8 - 10%.
- Its earnings growth should lead to steady price appreciation and a growing dividend.
- A look at my lessons learned after selling out of Raytheon a year ago.
How To Better Use Capital To Get Higher Income And Higher Total Return
- Set buy ranges ahead of time to eliminate as much emotion as possible.
- FAST Graphs & Morningstar are tools to help you identify the fair price of a security. Combined with technical charts, you can determine a price to ease in your money.
- Once you set up the buy ranges, your brokerage or Finviz.com can be tools to indicate what is a good buy on any given trading day.
- Setting buy ranges rationally increases the starting yield and total return of your new purchase.
- Periodically update your buy ranges so that you are always ready to deploy your cash on the best valued company for your portfolio.
Characteristics Of A Solid Dividend Portfolio
- I'm primarily using dividend growth and value investing for my portfolio.
- To ensure my income portfolio is solid, I analyze individual companies it holds.
- I look at each holding on its dividend safety, dividend growth, and its expected total return.
- Only buy good companies at a fair or discounted price to improve total return.
- In a simple way, I will use Target to illustrate the above concepts.
IBM's Stagnant Revenue May Be Coming To An End And It's Priced At A Discount Right Now
- IBM is sitting at 13% to 27% discount depending on which tool you use.
- IBM has increased its dividends for 19 years at a compounded annual growth rate of 17.5%.
- With earnings per share expected to reach $20 by 2015, and ample free cash flow, IBM's dividend should continue to grow at least 10% annually.
- As $24B has been invested into Big Data, and 15 planned data centers, totaling to 40 across the globe, revenue may start to pick up in a couple years.
Bought Silver Wheaton For Capital Gains
- Silver Wheaton is the biggest precious metals streaming company on earth.
- It has lowered downside risk because it pays low, fixed costs for silver and gold.
- Current risk/reward is in buyer's favour as price hits 400-day MA.
- 40% upside potential from Friday's closing price.
How I 'Played' My Microsoft Shares And What I'm Doing With Them
- Nice capital gain of 40+% if you bought Microsoft shares in early 2013.
- Recognize that the undervalued Microsoft opportunity between 2010 and 2013 is gone.
- Going forward, the return of buying shares from this point on will base on Microsoft's business performance.
- I shall continue to hold my shares, expecting ~8% dividend growth annually.
- I may add shares to this AAA rated company on meaningful dips.
Q1 2014 Update: My Whistler Income And Growth Portfolio
- Managing my own income and growth portfolio requires periodic reviews.
- Part of my quarterly review is to check sector allocation to determine if too much capital is allocated to 1 specific sector.
- Another part of the review is to check dividend allocation to ensure I'm not getting too much dividends from 1 specific sector.
Build A Margin Of Safety For Your Dividend Income
- A low payout ratio does not suggest plenty of room for dividend growth.
- Companies with wide economic moats are likely to continue growing dividends.
- Companies with strong balance sheet strength are more likely to continue growing dividends.
Book Review: The Single Best Investment - Creating Wealth With Dividend Growth
- Growing dividends from a portfolio of stocks serve as a compounding machine.
- The stocks in this portfolio have the characteristics of high quality, high yield, and high growth of yield.
- The essential ingredient in compounding is time.
- Adding High Growth Core Holdings To Strengthen My Dividend Growth Portfolio
- Reduce Risk Of Buying A Lower Quality Company For A Higher Yield And Return
- Adding To The Core For My Whistler Income And Growth Portfolio
- Switch Rogers Communications For 2 Other Core Holdings
- My Core Holdings With High Total Return Estimations
- Identifying The Core Holdings In My Whistler Income And Growth Portfolio
- My Whistler Income Portfolio's 1st Year Landing
- Cashing In Some Gains From Ross Stores To Diversify My Income Stream
- Replace A Loser With A Dividend Growth Blue Chip
- Why Building A Cash Position For My Dividend Income Portfolio Makes Sense