I mentioned in my post about Loyal3 that I have added some positions in Microsoft (MSFT) and Kraft (KRFT). I also have some small auto purchases being made, just $10 a month, into several stocks. The purchases that occurred during September include Coca-Cola (KO), Walt Disney (DIS), Pepsico (PEP), Walmart (WMT), Unilever (UL), and McDonald’s (MCD).
The only positions that had subsistence really were the purchases of MSFT and KRFT. Being that Loyal3 is fee free, I am able to put in just a few dollars at a time. Also, the added bonus is this makes my financial planning easier as I now have 10 automatic purchases set up I will automatically earn interest in my checking account which is usually over $15.00 a month. Now I don’t need to worry about the amount of times I use my debit card at the store and I can focus all of my purchases on reward credit cards while knowing I will be maximizing the return of my cash.
With that said, let’s go into a little detail about these stocks that I am purchasing.
Microsoft (MSFT)
I purchased 5.5581 shares for $250.00 in Microsoft and setup a monthly purchase of $10.00 for future months. When this purchase was initiated, it would of added $6.23 in annual dividend income to my portfolio. But since the purchase, Microsoft has already announced their dividend increase raising this to $0.31 a share quarterly, or $1.24 annually. Thisis over a 10% increase from their previous dividend of $0.28 a share on a quarterly basis and will now yield $6.89 in annual dividend income. The portfolio page still automatically reflects the old rate, possibly because it will not be updated until the new dividend is actually issued? Not sure on when yahoo finance updates that information.
If you don’t know anything about Microsoft… well the biggest product is Microsoft windows operating system, which is pretty much that standard OS nationwide which provides a tremendous moat. They also have other very popular products such as Microsoft office and the Xbox and related games that they create. Other areas in which they have business in includes mobile phones and their operating systems. I think key risks include how well they compete in cloud computing and particularly their lack of dominance in the mobile department. Google with Android and Apple with iPhone are really kicking them down in this realm. Who knows, there may even be more people using black berries than windows phones!
Kraft (KRFT)
I purchased 2.5675 shares of Kraft and also setup a monthly purchase plan of $10.00 with this stock. This crafty purchase will added another $5.39 in annual dividend income. Don’t hate on the small gains, every little bit helps towards building that passive income stream!
Kraft really isn’t the same as it used to be, they had split with Mondelez (MDLZ) and I considered grabbing a piece of both until I saw the dividend history where Mondelez had already cut from their dividend from the initial amount. I already am experiencing a stock with cuts in Strum Ruger (RGR) and that was a bad decision… clearly the better choice would have been to stay away from that one and I intend to avoid a mistake here. Anyways, I am a big fan of cheese and buy A LOT of kraft products. But their lines don’t stop in the dairy, they also have big brands such as Maxwell house coffee, planter’s peanuts, and oscar meyer meats. I do love bacon… but given my dad’s side of the family’s history with hearts clogging up, I think I am going to stay away from it for the most part… And sadly it isn’t just my dad, my uncle, and my grandma had passed in her early 60’s. See why I am motivated to retire early? I might not get a retirement at the “traditional” age!
Coca-Cola (KO)
I purchased a whooping .2407 shares in Coca-Cola for $10.00 this month. That beast of a purchase gets me another $0.29 in dividend income! Best respect!
Another large household name type of brand, Coca-Cola is mostly known for their soft drink beverages (as us Michagander’s refer to as “pop”, don’t ask why cause I don’t know) that go by the same namesake. They also have a line of sports drinks in their Powerade beverages, which I actually prefer over Gatorade. They also have orange juice as well as bottled water. So if you are thirsty and own KO, go for the knockout and boost your profits as well by sipping on one of their beverages! But maybe stay away from Surge, I hear they are reintroducing that stuff and I am not a big fan over Mountain Dew or Mountain Dew-type-spinoffs.
Walt Disney (DIS)
Another massive purchase worth $10.00 for .1106 shares. This being the lowest yielding stock on my portfolio…. puts out just $0.10 in annual dividend income. Ok, I give you permission to laugh at that one if you want. Go ahead, get it out.
Disney is mostly known for their movies, but they are great at turning their successes in the box office to successes in their cash box. They do a great job with making sure their are kids toys for their movies, adding in the characters to their theme parks and maybe even rides. Plus Pixar I think produces some very entertaining movies, doesn’t seem to matter what age you are! It will be interesting to see if they are successful in monetizing their purchase of Lucas Film and Indiana Jones. Even if they aren’t great at getting those implemented into future movies it sounds like they have plans to do so in theme parks. That can still be a great revenue generator, get your geek on!
Pepsico (PEP)
I purchased .11 shares of Pepsico (PEP) for, you guess it, $10.00. This company is on par with KO adding in another $0.29 in annual dividend income. I think I am out of semi-witty comments regarding these tiny purchases so I will leave it at that.
I would probably argue that Pepsi is more diversified than Coke. Their soft drink line may be in at number two, but they are more dominant in other areas such as their sport drink line and their potato chip line. Overall I think that they are a great company with great products, but the sad thing is my purchases are usually the third runner up in this market – Dr Pepper Snapple (DPS). The reason is that RC Cola is consistently $1.00 at the store, so unless if Coke or Pepsi are on sale.. that is what I buy. Plus the wifey likes Dr. Pepper and LOVES Cherry Dr. Pepper. That said, I think Coke and Pepsi and better companies and for most customers can charge a premium. I just thought that investing in all three was a BIT too much for the time being.
Walmart (WMT)
I purchased .1299 shares of Walmart for $10.00. Walmart will add another $0.25 to the annual dividend total.
Walmart is the most dominant grocery chain in the United States and I really don’t see that changing any time soon. I do find that they are often one of the best priced big box stores around. Sure you can get a better price on some items at like Aldi, or Warehouse’s such as their own Sam’s Club or a Costco, but those stores are not as abundant as Walmart and they do have less variety. The closest competitor that offer’s a similar style to them for me is a regional family owned chain called Meijer. I usually shop there because it is 15 miles one way closer, but if I am going to be near a Walmart that weekend when shopping, it would be a bit foolish not to take in the savings. With ad matching they are really hard to beat for consumers looking for the best deal. They may not be my favorite place, but I don’t view them as bad now that I can at least benefit from the hassle of long lines.
Unilever (UL)
I purchased .2292 shares of Unilever for $10.00. Based on the current dividend this will add $0.35 in annual dividends.
This was basically the only consumer products type company on Loyal3 and I figured it would be a solid pick to add. Well AFTER I setup the initial purchase I was looking at their history a bit more (should have beforehand) and noticed how their dividend history is a bit sporadic. It seems that their payout ratio is a bit high and they are probably just issuing their quarterly dividend based on cash flow. To add to that, I thought I should check and see what types on Unilever products I have lying around. Well… I have Colgate, Kimberly Clark, and Georgia Pacific products here, but I didn’t see any Unilever. Maybe my wife has some of their stuff. But it makes me wonder what kind of value are they offering their customers if I wasn’t already drawn to their products beforehand? I think I will continue with this auto purchase until an entire share is owned and then move on to one of the other choices available on Loyal3 – possibly YUM, DPS, or HAS.
McDonald’s (MCD)
I purchased .1064 shares of McDonald’s for $10.00. This will add another $0.34 in annual dividends!
McDonald’s is the largest fast food chain in the world. I think I heard that YUM brands has more stores, but I don’t think they are higher on revenue and no single chain has covered the market as wide as McDonald’s has. They sell a consistent product, that, well it works. It isn’t my first choice, but if you are on the go and need something it sure beats gas station food.
Summary
The combined stock purchases will add a total of $13.90 in annual dividend income, after accounting for Microsoft’s dividend increase. My forward dividend income has now broken $300 and is at $306.28!
Next month I expect to make $10 purchases to all of the stocks mentioned, plus Mattel (MAT) and Kellogg (K). Also, it sounds like my wife’s ROTH is finally on the move out of Edward Jones once she calls the guy back to confirm we want to move that money. That should provide an interesting month of purchases with almost $7,000 available in extra capital!
What about you, did you purchase any stocks this month?
Full Disclosure: Long MSFT, KRFT, KO, DIS, PEP, WMT, MCD. Possibly long on UL and RGR.
Photo Credit: suphakit73 / FreeDigitalPhotos.net
Its the small purchases that add up! Keep at it and you will reach financial independence in time.
Congrats on breaking the $300 mark in FY dividends.
cheers
R2R
Thanks R2R! I am happy breaking the $300 mark for sure! It will more than likely take a jump next update since I know for certain the ROTH is in motion, if we get an average of 3% on a yield from those funds we should be looking at over $500 a month in forward dividends.
I’m curious to know how much your commission/ transaction fees are when you purchase a stock for $10.
Anyway, you have a good investment mix, (thumbs up)
Hi Sherif,
There are no commission / transaction fees with Loyal3, which is why I CAN invest $10 at a time. However, they do have a limited selection of stocks.
All excellent buys! Good job!
I am a little uncertain if UL is an excellent buy, we shall see! They are a solid company that has been around for awhile, but I think there are better consumer product companies out there.
Keep at it! It’s the consistency that counts. All quality buys too!
Thanks Henry! These are on automatic as I mentioned, a great way to know that interest will be flowing into my credit union hassle free! Being they are on automatic, I was more concerned about the quality of the company than the price, so I may not be entering in at the best value right now, but I want companies that will produce great results long term.
These are all fantastic choices; I doubt you’ll regret any of these in a decade. I’m personally long KO and MCD myself, but hope to be long the rest eventually. DIS’s dividend history especially gave me pause, but of course, with my characteristic hesitation, it got away from me. With any hope it’ll get back into my range. Also, I love RGR. It’s a great stock, but unfortunately it met my sell criteria a while ago, so I had to sell it. I hope to own it again for sure, since it’s a fantastic company in general. All the best!
Yea, I probably shouldn’t have pulled the trigger in acquiring RGR since they had already cut their dividend. It wasn’t wise in hindsight. That said, I think they will fare better in the future, they aren’t going away and will provide a better opportunity to sell at some point. But clearly the current management wasn’t too concerned about being a future dividend contender as they were until the dividend cuts.
All solid companies. I keep looking at Proctor and Gamble wanting it to drop a bit so I can jump in but it doesn’t seem to go down. Its just my luck, any time Im ready to buy a stock it never seems to drop. Maybe I should just bite the bullet and buy now
If P&G was included on Loyal3 I would have grabbed them instantly over UL. I will have to take a decent look into them once that ROTH transfer completes, but right now the values in investing seem to be in financials and telecoms. That can change of course if this pullback continues, it might end up being great timing for this to happen!
All very solid stock pickups! Consumer stalwarts that will throw off nice dividends for you for a long, long time.
That is the goal Steve! Thanks!
I have many of the names you purchased in my portfolio as well so how can I not like these additions. MCD, UL, PEP, KO, KRFT. From small purchases come large dividends. The key is to just keep at it month in and month out. Thanks for sharing your purchases with us.
Thanks Keith! Slow and steady will work! Right now my focus is more towards debt, but hopefully next year I can stuff $11,000 into IRA’s.