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.

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