Portfolio Thoughts (Oct. 2017)

Time for another monthly examination of the dividend Portfolio.  Periodic reviews are necessary in order to determine if I can improve it.

There was a little activity in the portfolio this past month… an additional purchase of NKE, and a complete sale of GWW.  Check out the links to get the reasoning behind those transactions.

A couple of my financial stocks have been doing very well this past month: TROW and BLK.  In the healthcare sector, JNJ has been rising this past month.  Great to see these climb!

As for what’s not working… Utility SCANA (SCG) is still dealing with the aftermath of a failed nuclear investment, and may be dealing with it for some time.  SCG is my only utility stock, as I’m not a big fan of the utilities in general.  For now, I’m holding tight, waiting for it to find a bottom.  I’ll continue to monitor SCG.

I’m still on lookout for a Information Technology investment.  I’m happy with the size of my existing positions in this sector, so I’m looking outside the portfolio for a candidate.  CSCO is still a name I’m watching.  I’d like to initiate a position in Texas Instruments (TXN), but not sure the price is right at this time… more research to do.

As for adding to my existing positions, CAH is still on my radar, it actually dipped during the past month and has recovered a bit.  It got below the $65 mark that triggered additional interest for me, but I wasn’t prepared to act.  We’ll see if it drops to that level again.  I also like HRL at its current level ($30).  That’s below where I made my last purchase in late August, so making an additional investment is a possibility.

One new stock I’m considering at this time is The Cheesecake Factory (CAKE).  They’ve stumbled a bit this year, but there could be opportunity there.  I like their controlled growth approach, and the fact that they have no debt.  I think they can deliver 10% earnings growth.  They have a 2.6% yield, and a 31% payout ratio – so there’s room for dividend growth, too.  The current price of $43.50 is acceptable, but I’d like even more in the $40-$41 range.

With my recent GWW sale, I have some cash to deploy.  I’m hoping to find something to invest in before year’s end, as I’d like to reach the $7,200 mark in annual forward dividend income for the portfolio, which would result in a nice $600 monthly average – a nice starting point for 2018.

I’ll continue to look for good companies whose stock is trading at an acceptable price.  Even with the market at all-time highs, I know there are values out there… I just need to find them.

What are you thinking of doing with your portfolio these days?  Any trades planned that might shake things up?  Do you have any thoughts on any of the names I mentioned here?  If so, please share.  ‘Til next time…

 

 

Posted on by Engineering Dividends

11 thoughts on “Portfolio Thoughts (Oct. 2017)”

  1. I think I’ve reached my limit for tech stocks this year. (Ok maybe another small T purchase somewhere at the end of the year). I’ve added HRL as well and saw a dip on ADM and WBA which I might act upon next month. SKT is also still in my sights but that is somewhat more risk.

    1. Sounds like lots of potential activity on your end, Mr. Robot. Lots to keep tabs on, but worth it if you find that stock you want at the right price. ADM could be one for me to investigate. Thanks for commenting!

  2. I like NKE down in the low $50’s and hope it drifts back down to those levels. I’m a bit wary of tech at least as a core part of my portfolio because that’s definitely one of the most disruptive industries out there and so the moats are relatively weak compared to some of the other industries. That being said I do own some QCOM, AAPL and CSCO. I’ve been contemplating trimming or closing some positions in order to round up some cash for better opportunities/values but I’m also tempted to just leave well enough alone. Maybe with the end of year coming up a bit of tax loss harvesting will be in order, but nothing too major is planned for the portfolio. All the best.

    1. Hi JC, glad you stopped by and commented. Yes, NKE in the low $50s looks good to me as well. A drift back down to those levels is certainly a possibility with any sort of market correction. Tech companies certainly have a hard time sustaining success given all the technology changes over time. If they don’t adapt, they usually wither away. However, if you find a good one, it can certainly enhance the portfolio returns. I agree, with the end of the year approaching some tax loss harvesting could be on the agenda, but nothing significant as you mention. I checked out your FI portfolio… nice ROI on the MCD investment. It’s clearly a leader in your portfolio. How long have you been invested there?

      1. I’ve owned MCD since 2011 and it was one of my first DG purchases. Some of my best ROI investments have been WFC, BAC and JPM that were made back around that same time. It’s been quite a run since the bull market started and I’m hoping that we’ll maybe be getting that ever elusive pullback/correction to open up some value sometime around late Q1 or Q2 of 2018 when we should finally be to get back to regular investing.

  3. On the IT front I purchased MIXT this month, albeit a small position. I like that it’s not an American company which helps with some geographic diversification. It even has a dividend yield hovering around 1.5%.

    In other sectors I added SNA recently to my main brokerage account. I think they are a fantastic company with great products, along with low PE and a growing dividend. Only issue is the dividend yield is slightly under 2%, but they should be raising it next month, bringing it above 2% yield.

    Other than that I opened up an account with Robinhood to deploy some loose cash here and there. I love how it’s commission free; but it doesn’t have near the features of other brokerages. Currently I’m buying CHD, HBI, and TAP through it. I plan on adding onto those shares in the coming months.

    1. Hi CD, glad you checked in and commented. I’ve got a few stocks that don’t have large yields either, so I’m not opposed to them at all. Usually, I can expect better than average growth from them. Sounds like you’ve got some nice plans for those portfolios.
      By the way, I tried commenting on your “welcome” post, but it thought my comment was spam of some sort, and wouldn’t let me publish it. I’ll try again soon.

  4. Woah Cheesecake Factory is definitely a new one for me. I love eating their food, but I don’t know if it is my cup of tea for my investment portfolio. I’m not the biggest fan of the restaurant industry, but I do love that they do not have any debt.

    My list consists of T, CVS, CAH, CPB, and some other great stocks. Looks like more and more opportunities are starting to present themselves and man am I liking it.

    Best of luck shopping.

    Bert

    1. Hi Bert, yeah CAKE is a little different for me, too, but it’s on the radar for now if I can get the right entry point. Like you, I’m watching CVS and CAH – these two are certainly volatile these days, but that could present an opportunity! As always, thanks for dropping by and commenting.

  5. Hey ED,

    Just curious as to why you chose to sell GWW. It was one of the companies I recently added to my portfolio. Here’s hoping you’ll meet the $7200 goal by year’s end.

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