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Survivor of many lost decades. I'm a non-professional investor that trades stocks and options. I like good cigars, smooth bourbons, rare steaks, and dry martini's.
My blog:
The Grandson Project
  • The Grandson Project, Part V

    All information is taken from www.directinvesting.com and the transfer agent's web site.

    Moving on to the next company:

    Hasbro Inc. (HAS) -- NASDAQ

    Industry: Manufactures toys and games

    Number of shares needed to join the DRIP: 1 Share(s)

    • In order to participate in Hasbro's DRIP, you need to be an existing shareholder. This can be done by purchasing shares from a discount broker and having them sent to the transfer agent.
    • Or using a service such as Temper of the Times Investor Services, Inc., through www.directinvesting.com. Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public, in addition to the price of the stock, to purchase shares and set up each account with the transfer agent.

    Minimum amount accepted by the plan for subsequent investments: $25.00

    Maximum amount accepted by the plan for subsequent investments: 24,000/year

    Fees charged by plan for subsequent investments: Co. pays fee

    Fees charged by plan for dividend reinvestment: Co. pays fee

    Recent Price: $40.95

    HAS is a dividend Contender having raised its dividend for 10 consecutive years. The stock is currently yielding 3.9%, for a quarterly dividend of $.40. The portfolio currently holds 5.289355 shares. The reoccurring monthly investment I've added is $50.00, enough to purchase at least 1 additional share per month.

    H.J. Heinz Company (NYSE:HNZ) -- NYSE

    • Berkshire and 3G Capital have announced a tender offer for The H.J. Heinz Company. The company is in the process of being taken private. So, I would not recommend setting up a DSP/DRIP at this time. If the buyout doesn't materialize, then that would be the time to reconsider. Presently the portfolio holds 4.117 shares. I have cancelled monthly investments, pending the tender offer.
    • Warren Buffett really is the Grinch

    Johnson & Johnson (NYSE:JNJ) -- NYSE

    Industry: Health care & consumer products

    Number of shares needed to join the DRIP: 1 Share(s)

    • Note: In order to participate in Johnson & Johnson's DRIP, you need to be an existing shareholder. This can be done by purchasing shares from a discount broker, having them registered to your name, and sent to the transfer agent: www.computershare.com.
    • Or use a service such as Temper of the Times Investor Services, Inc., through www.directinvesting.com. Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public, in addition to the price of the stock, to purchase shares and set up each account with the transfer agent.

    Minimum amount accepted by the plan for subsequent investments: $25.00

    Maximum amount accepted by the plan for subsequent investments: 50,000/year

    Fees charged by plan for subsequent investments: Co. pays fee

    Note: There is a $1 ACH fee that, the company does not pay, on each transaction.

    Fees charged by plan for dividend reinvestment: Co. pays fee

    Recent Price: $77.39

    JNJ is a dividend Champion having raised its dividend for the past fifty years. The stock is currently yielding 3.1%, for a quarterly dividend of $.61. The portfolio currently holds 4.447323 shares. The reoccurring monthly investment I've added is $85.00, enough to purchase at least 1 additional share per month.

    Kellogg Company (NYSE:K) -- NYSE

    Industry: Food Processing

    Number of shares needed to join the DRIP: 1 Share(s)

    • This can be done by purchasing shares from a discount broker, having them registered in your name, and sent to the transfer agent.
    • Or, purchased through Temper of the Times Investor Services, Inc. Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public, in addition to the price of the stock, to set up each account with the transfer agent.
    • If the account is established directly with the transfer agent www.shareowneronline.com, the minimum initial investment it $50 which includes the $15 fee to setup the account.

    Minimum amount accepted by the plan for subsequent investments: $25.00

    Maximum amount accepted by the plan for subsequent investments: $100,000/year

    Fees charged by plan for subsequent investments: $0!

    Fees charged by plan for dividend reinvestment: $0!

    Recent Price: $61.42

    K is a dividend Challenger having raised its dividend for the past eight years. The stock is currently yielding 2.9%, for a quarterly dividend of $.44. The portfolio currently holds 4.512 shares. The reoccurring monthly investment I've added is $70.00, enough to purchase at least 1 additional share per month.

    Norfolk Southern Corp. (NYSE:NSC) -- NYSE

    Industry: Railroads

    Number of shares needed to join the DRIP: 1 Share(s)

    • This can be done by purchasing shares from a discount broker, having them registered in your name, and sent to the transfer agent.
    • Or, purchased through Temper of the Times Investor Services, Inc. And Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public, in addition to the price of the stock, to purchase shares and set up each account with the transfer agent.
    • If the account is established directly with the transfer agent: www.amstock.com, the initial investment is $250.

    Minimum amount accepted by the plan for subsequent investments: $25.00

    • www.directinvesting.com indicates the minimum subsequent investment is $50. The plan detail on amstock.com indicates the minimum subsequent investment is $25.
    • It is a bit difficult changing subsequent investments. In order to increase/decrease amounts, another 'one time' investment (minimum $25) must be made.

    Maximum amount accepted by the plan for subsequent investments: $10,000/investment

    Fees charged by plan for subsequent investments: $0!

    Fees charged by plan for dividend reinvestment: $0!

    Recent Price: $74.40

    NSC is a dividend Contender having raised its dividend for the past eleven years. The stock is currently yielding 2.7%, for a quarterly dividend of $.50. The portfolio currently holds 8.153 shares. The reoccurring monthly investment I've added is $85.00, enough to purchase at least 1 additional share per month.

    Senior Housing Properties Trust (NYSE:SNH) -- NYSE

    Industry: REIT

    Number of shares needed to join the DRIP: 1 Share(s)

    • In order to participate in Senior Housing Properties Trust DRIP, you need to be an existing shareholder. This can be done by purchasing shares from a discount broker, having them registered in your name, and sent to the transfer agent.
    • Or use a service such as Temper of the Times Investor Services, Inc., through www.directinvesting.com. Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public, in addition to the price of the stock, to set up each account with the transfer agent www.shareowneronline.com.

    Minimum amount accepted by the plan for subsequent investments: $0.00

    • Subsequent investments are made quarterly, as opposed to monthly.

    Maximum amount accepted by the plan for subsequent investments: $10,000/quarter

    Fees charged by plan for subsequent investments: Co. pays fee

    Fees charged by plan for dividend reinvestment: Co. pays fee

    Recent Price: $25.39

    SNH is a dividend Challenger having raised its dividend for the past 9 years. The stock is currently yielding 6.1%, for a quarterly dividend of $.39. The portfolio currently holds 8.058 shares. The reoccurring quarterly investment I've added is $90.00, enough to purchase 3 additional shares per quarter.

    Next: Compounding Math....

    Disclosure: I am long COP, DPS, GE, HAS, HNZ, JNJ, K, NSC, SNH.

    Mar 07 9:44 AM | Link | Comment!
  • The Grandson Project, Part IV

    Selecting companies....

    I'm not smart enough to look at a balance sheet, and let's face it, ENRON's or Worldcom's, balance sheets probably looked good at one time. Heck, GE (and the 'too big to fail' banks), probably all had GREAT balance sheets before the financial pandemic hit.

    Hey... The Wizard of Oz even looks a bit like Jack Welch...

    After all, as Inspector 'Dirty' Harry Callahan said:

    Instead, I look for companies that provide goods and/or services that I understand. Since The Grandson Project is a DRiP portfolio, the companies MUST pay dividends. Slow growth isn't an issue. Remember the Aesop's Fable, 'The Tortoise and the Hare'?

    (click to enlarge)

    I prefer the classic Disney version over the Looney Tunes. No slight to Bugs Bunny though.

    It's difficult to sell the idea of 'slow and steady', when trying to hold back the 'I want it NOW' generation, that are looking for exponential growth over slow compounding. Dividends? "We don't need no stinking dividends!"

    (click to enlarge)

    (Hedley Lamarr is my all time favorite Harvey Korman role.)

    Looks a bit like David Fish without the tinted glasses???

    Here's the first three holdings in alphabetical order:

    Conoco Phillips (NYSE:COP) -- NYSE

    Industry: Oil refining, chemicals

    Number of shares needed to join the DRIP: 1 Share(s)

    Note: This is when purchase through Temper of the Times Investor Services, Inc. And Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public. If account is established directly with the transfer agent: www.computershare.com, the initial investment is $250, and there is no additional fee to set up the account.

    Minimum amount accepted by the plan for subsequent investments: $25.00

    Maximum amount accepted by the plan for subsequent investments: $120,000/year

    Fees charged by plan for subsequent investments: Co. pays fee

    Fees charged by plan for dividend reinvestment: $0!

    Recent Price: $57.66

    COP is a dividend contender, having raised it's dividend 12 consecutive years The stock is yielding 4.58%, for a quarterly dividend of $.66. The portfolio currently holds 6.321912 shares. The reoccurring monthly investment I've added is $70.00. More than enough to purchase 1 additional share per month.

    Dr Pepper Snapple Group, Inc. (NYSE:DPS) -- NYSE

    Industry: Beverages-Non-alcoholic

    Number of shares needed to join the DRIP: 1 Share(s)

    Note: This is when purchase through Temper of the Times Investor Services, Inc. And Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public. If account is established directly with the transfer agent: www.computershare.com, the initial investment is $250, and there is a $15 additional fee to set up the account.

    Minimum amount accepted by the plan for subsequent investments: $50.00

    Maximum amount accepted by the plan for subsequent investments: $100,000/year

    Fees charged by plan for subsequent investments: $0.00

    Fees charged by plan for dividend re-investments: $0.00

    Recent Price: $44.28

    DPS hasn't made it on the CCC list yet, it started paying dividends in 2009 and has raised it's dividends every year since then. It should become a dividend challenger next year. DPS is a recent addition to the portfolio, replacing HNZ (which is still held pending acquisition). The stock is yielding 3.45%, for a quarterly dividend of $.38. The portfolio currently holds 5.786656 shares. The reoccurring monthly investment I've added is $60.00. More than enough to purchase 1 additional share per month.

    General Electric Company (NYSE:GE) -- NYSE

    Industry: Elec. equip., broadcasting & fin'l serv.

    Number of shares needed to join the DRIP: 1 Share(s)

    Note: This is when purchase through Temper of the Times Investor Services, Inc. And Temper charges a $30 fee for DRIP Club Members or $60 for members of the general public. If account is established directly with the transfer agent: www.cpushareownerservices.com, the initial investment is $250, and there is a $7.50 registration fee to set up the account.

    Minimum amount accepted by the plan for subsequent investments: $10.00

    Maximum amount accepted by the plan for subsequent investments: 10,000/week

    Fees charged by plan for subsequent investments: $3.00

    Note: This is a transaction fee, only if you mail in the funds using a check. There is a $1.00 ACH fee, per transaction, that is made online or monthly.

    Fees charged by plan for dividend reinvestment's: Co. pays fee

    Recent Price: $23.59

    GE is a fallen angel. Although it has a 100 year history of paying quarterly dividends, it cut that quarterly dividend in June 2009 from $.31 all the way down to $.01. Since then, the quarterly dividend has recovered to $.19. And will probably increase that sometime this year. The stock is yielding 3.2%, for a quarterly dividend of $.19. The portfolio currently holds 9.8735 shares. The reoccurring monthly investment I've added is $50.00. More than enough to purchase 1 additional share per month.

    Next installment: HAS, HNZ, JNJ, K, NSC, and SNH

    Disclosure: The author is long COP, DPS, GE, HAS, HNZ, JNJ, K, NSC, SNH.

    Mar 06 11:50 AM | Link | Comment!
  • The Grandson Project, Part III

    I was going to start talking about selecting companies, and I'll get to that eventually, perhaps not in this post. But eventually.

    However, we need to talk about:

    (click to enlarge)

    Good 'ol Father Time.

    Since I'm sixty years older than my grandson (he's 2), my accounts have different goals than his DRiP portfolio does. Oh, they both will be filled with great dividend paying companies. However: He can dollar cost average with additional purchases. And, by design, DRiP investing is automatic. You get the price you get, when you get it. Automatic monthly purchases in his accounts are the same. You never know what the price exactly is, until the purchase is made. And, there is a bit of a 'lag', getting the information from the respective transfer agent, following the purchase. Some are fast, some aren't so fast.

    On the other hand, I don't DRiP. Other than my 401k and my wife's TSP account, which are by default dollar cost averaged, I wait for dips and bargains. At present, neither of us add to our present IRA's. (We may start adding to my wife's as she's maxed out in her TSP, but I digress.) I will also 'trade' in my IRA and taxable account. In addition I use margin and option writing, also in my taxable account. Margin and options, obviously can't be used, in my grandson's accounts.

    With 40, 50, or 60 years to compound, my grandson definitely has the edge over his grandparents in wealth building. Time. Something I cannot purchase more of. My clock has a lot less tension in the main spring than his does. Where my accounts are about preserving wealth and providing income, his are about building wealth.

    Which brings up another dilemma: Why use a DSP (Direct Stock Purchase plan), as opposed to a discount broker? In a word... FEEs. Even the cheapest of the cheap discount brokers charge a fee per transaction. My personal accounts are at Scottrade, and at $7 a trade, buying one share of GE initially and then subsequently every month, would be expensive. Plus, that $7 fee is for 100 share purchases. It may be higher for 'odd lots'. And with Scottrade, you cannot automatically re-invest dividends, all though, they just began a form of DRiP service. Yes, there are other brokerages out there, that will. I believe Vanguard and Fidelity will. But you are still going to get hit for a fee doing monthly purchases. AND, then there's the issue of 'fractional shares'. Not a problem with DSP/DRiP accounts.

    Secondly, and a bit on the devious grandparent side, you have to remember that UTMAs or UGMAs transfer to the child when they reach the 'age of majority and trust termination'. This is set state by state. In Michigan it is 18 years of age for both. Here's a link that has a good explanation and a state by state chart: http://www.finaid.org/savings/ageofmajority.phtml

    Establishing a single brokerage account makes it 'way too easy' for the hormone enriched child to gain access to the investments. Having accounts set up with a transfer agent or company, makes that access a bit more difficult than walking in to the nearest Scottrade office and cashing out. Doesn't prevent it from happening, but it does slow down the process. And hopefully prevents it.

    Let's not forget another certainty, the only constants in life are death and taxes. Yep:

    The IRS wants your grandchild's money.

    From Investopedia:

    For a qualifying dependent child, there are four basic tests, any one of which requires a federal income tax return to be filed for a given year:

    1. The child has unearned income (from investment interest, gains, and so on) above $950.
    2. The child has earned income above $5,800.
    3. Gross income is greater than the larger of $950 or earned income (up to $5,800) plus $300.
    4. Net earnings from self-employment are $400 or more.

    In each case, amounts shown are for 2011. For more details, see IRS Publication 929: Tax Rules for Children and Dependents.

    Read more: http://www.investopedia.com/articles/taxes/08/kids-first-income-tax-return.asp#ixzz2MfxoEVdQ

    My suggestion: Check with a tax expert.

    Well, I didn't get to talking about selecting companies, but there's NEXT TIME....

    Disclosure: The author is long GE, COP, NSC, HAS, K, SNH, DPS, JNJ.

    Mar 05 9:41 AM | Link | 2 Comments
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