Spent a good deal on Adsense last month thought Id turn the page and do some talking about my investing for secondary income. Awhile back I did a post on Drips and Dividend investing so its time I do a little update. As of that post I had restarted my BuyandHold.com account and had started purchasing my stocks.
In this account I only purchase dividend bearing stocks and do so with the mindset I will be holding them for the long run. I am not a trader, I do not have the time to be and IMHO trading dosent really have the return for the effort (you can chastise me in the comments now on how I am wrong). When I finally purchase a stock I am looking for a couple things.
- A strong and well established company that has been around for awhile.
- A company that I know and most likely use in some way
- A dividend yield of 3% or higher
- A history of increasing dividends
- When is their dividend payout. Not a great requirement but I am trying to build my portfolio so that I have a payout each month.
My Current Dividend Portfolio
Ok so where am I at now and what dividend stocks do I own now?
- GE (GE) - This company is everywhere! Im sure you use something made by a GE company everyday in your life. They have been around for ever and their dividends have been increasing every year. They are also cheap in my way of thinking. Currently trading at about $19 and with a yield of 3.2% it makes it a great buy
- Sempra Energy (SRE) – This an energy company here in San Diego that owns our local utility SDGE as well as others. SO it passes the know and use requirements (sucking up energy from them as I write this post). Back when I did investing the first time they were my best performer, buying in at $18 and finally selling at $80 when I closed my account. This time around not so lucky as I started out in the $40′s. They are currently trading around $58 with a yield of 3.29%. I still like them even though they are expensive in my book, but I tend to increase on their down days. They have also been good as a growth stock as well as dividends.
- Intel (INTC) – We all know Intel, again they are everywhere in the computing world being the number one company for CPUs. They may have not been along as long as GE but since they have been they have been increasing their dividends each year as well. Currently trading at around $26.50 and close to the 52 week high of $27 with a yield of 3.03%. Again I look for the down days to increase position here but I think they do have room to gro beyond that $27.
- ATT&T (T) – Yes the mighty T. They have been around a long time in one form or another, currently as one of the top 3 wireless providers. Ok lets be honest there are really only 2 in the top and T is one of them. Dividends again increasing over time and being a solid company I believe will be around for quite some time (at least in my lifetime). Currently trading at $28 with a dividend at a whopping 5.78% it is definitely one that belongs in any dividend portfolio. Not much in growth but I do expect some perhaps later in the year. Trading right in the middle of the 52 week trend I think it will start to go up after this T-Mobile mess gets far behind us.
My Top Secret Strategy
Well its not a secret really and and it may be foolish to some but here is what I do. I mentioned that I look at the payout months for the dividends so that I have them spread out throughout the year, giving me a monthly payout. Currently I do have that with the four stocks above. With Jan, April, July, and Dec having two of them payout. So fo future purchases of new stocks I would like to get the other months another payout to balance a bit. Not the biggest criteria but im looking at it anyway.
Now that I have the months covered I will be increasing positions in these 4 for a bit most likely before I bring on a newbie. I look at each month coming up and see who is paying out. In todays case it is March and that would be Intel. I look at when the dividend record date is (they date you must own shares by to receive dividends on the next payout date) and be sure I do that months purchase by that date. So for Intel their record date is Feb 7th (yikes thats tomorrow!) to receive dividends on March 1st.
Like I said may be foolish but hey its my game and I’ll play by my rules!
Well I will be increasing my positions for the next couple months I believe. I am looking at a newbie for the next addition, and I owe the discovery to Cash Flow Mantra as he mentioned it on his blog. The company is SeaDrill (SDRL) which makes and operates Oil Drilling rigs and ships. Now this one may break a couple of my rules as I dont know them and they are in a sometimes volatile industry. They do not have a long history of dividends as they others I own and the amount has dipped a bit in 2009 but is now rising again. Analyst have been rather up on them but have seen some concerns (that seem to get tossed aside) they are currently trading at $38 which is right about at their 52 week high. Some think they are over bought and think they may come down a notch soon and that might be when I get in. Afraid if I wait to long though I may miss the boat.
Now why would I take a chance on SeaDrill? Well tis for the one thing I haven’t mentioned yet, the dividend! Its at a even more whopping 8.28%! (oh and they payout March, June, Sept, Dec perfect!)
Finally here is my performance chart for this account. Not as big as some yours but just started late last year and making small monthly contributions where I can.
So there is my dividend account update. This is the account I actively manage as I also have regular payments going to Vanguard Index funds on auto pilot. Funny thing is that this account is currently outperforming the Vanguard. All you experts out there try not to beat me up to bad. I am not an expert and dont take my advice as such. I just share what I have been doing good or bad so maybe you can learn from my successes and even in my mistakes.