You Sunk My Battleship, One Sale and Two New July Buys

Sometimes you just have to let go so that you can keep moving forward.  Earlier this week I sold out of my position in NAT.  This position was originally bought as a bet that the shipping industry was about to see a turnaround.  While I think the shipping industry is an interesting one at this time I felt like my position in NAT was a bit of a hot potato.  The company is well known for destroying shareholder equity by issuing shares and diluting value.  On one hand this is directly damaging to shareholders, on the other this allowed NAT to raise money without taking on debt, something which has helped the company immensely as the industry has tanked since the recession.  Similar shipping companies have not fared as well as the debt piled up and earnings fell.  Then there is always the ticking time bomb of China, whose shipyards are churning out more and more new ships which is leading to oversupply.

Overall I felt like I was stuck in a do loop, continuously analyzing this stock until I finally decided to take my profits and invest them elsewhere.  I sold 157 shares for a total of $1450.07 accepting an adjusted gain of just over 10%  Not bad for one month and definitely a learning experience for me.  This brings my total stock trading profit up to $432 for the year.

With this money, and some extra capital I initiated two new positions for my portfolio.  I ended up purchasing 22 shares of POPE (Pope Resources) for a total of $1501.59.  I also picked up 10 shares of BA (Boeing) for a total of $1252.49.  Boeing is one company that I have been interested in owning for a long time.  I took the recent sell off after earnings as an opportunity to initiate a position and it is one of those companies that I plan on holding long term.    After this portfolio reshuffling my 12 month forward dividends now sit at $2260.16 and I am sleeping significantly better at night.

June Spending, Dividend Income and a July Buy

It's looking like blog updates are going to be less frequent for the foreseeable future as my work hours are starting to pile up once again.  Overall June was my best month of the year for both dividend income and spending.  The numbers speak for themselves!

June Spending 

Total spending came in at a very low $849.81.  This is by far the best spending month I have had since I started this blog back in February.  The main reasons this number is so low has to do with the fact that my first mortgage payment wasn't due until July 1st so I had no rent or mortgage to pay in June.  June was also the first month that my work has started making my student loan payments.  This saves an additional $121 every single month which I will happily put to work earning me dividends.

My food and dining, shopping, and utility bills were higher than normal.  I had to pay utilities on two properties in June which propped up spending.  I also needed to buy a few household items to do some repairs/renovations on the new house.  I took friends out for dinner a few times and also bought groceries for a family barbecue which increases the food bill to slightly higher than normal.

June Dividend Income


The majority of my stocks have dividend distributions that occur in June.  As such it was by far my biggest dividend haul to date.  Dividend payments were as follows:

AWLCF: $50.51
INTC:      $10.13
CVX:       $9.63
TGT:        $7.74
MCD:      $8.91
PSEC:      $33.13
SDRL:      $43.00
GLPI:       $16.12

The total haul for the month of June was $179.17  When compared to last quarters March dividend income of $46.82 we have an increase of over 382%  I couldn't be happier with the increase which is mostly attributed to the fact that almost all of my high yield income investments pay out in this time period.  This brings my total dividends received in my first 6 months of investing up to $348.58.

Total dividend coverage for the month of June was 21.08% That little sliver of dividend income has had its first very noticeable month.  This is mainly due to the supplementation of my dividend growth stocks with high income investments.  My ideal portfolio at this time is an equal combination of dividend growth and income investments.  The higher yield income investments typically carry higher risk in particular risk to dividend distributions/increases due to very high, sometimes greater than 100% payout ratios.  There is a very real possibility of a poor quarter causing a dividend decrease.

 I carefully monitor these higher yield investments and consider all of these positions as possible trades.  I will typically pick up higher yield positions in industries that have seen hard times.  For example SDRL and AWLCF (offshore drilling) which has been rallying nicely for the last few months after a severe decline.  NAT (shipping) which is an industry that has still not recovered well since the financial crises.  However indicative rates (how much it costs to contract out an oil tanker) have risen substantially in the last few weeks causing the stock to bounce nicely (might sell soon).  Conversely my dividend growth positions I plan on holding and allowing the distributions to grow long term.  They are my SWAN (sleep well at night) investments that require significantly less attention and preening.

July Stock Buy

Earlier this month I picked up 59 shares of CVRR for a price of $25.69 per share for a total investment of $1525.69.  My new 12 month forward dividend income sits at $2,316.4 with this purchase.  This is another high income play for me that pays out the majority of its free cash flow in dividends.  A risky play similar to my purchase of AWLCF, CVRR owns and operates two refineries.  The company is currently recovering from difficulties at one of their refineries last year which caused a major decrease in income/company value.

Currently considering for my second July purchase:
RY, WFC or TD  (I keep wanting to buy a financial but the prices keep rising.  I like each of these companies and might just pull the trigger regardless instead of missing the bus)
NORSB:  illiquid microcap great analysis here:  http://otcadventures.com/?p=1374
GE, RTN, LMT, AGU, POT (still need to do more analysis.)
Also closely monitoring the merger of RAI and LO for a buying opportunity.

Considering selling my position in NAT

Thanks for reading folks!

June 2014 Bonus Buy

It's time to put my income to work again with a duo of bonus buys for June.  Earlier in the month I picked up shares of VZ and NAT.  Since then I have been putting in my time researching the next place I want to unload a pile of cash.  I have also been working on coming up with a mathematical formula to help me assign scores/multipliers to dividend paying/growth stocks and populating a database with basic statistics to test the formula.  While I am still far from perfecting the process I did use the formula to single out my two buys this month.

For my first purchase I bought 30 shares of TGT at 58.09 per share for a total of $1762.69.  Target has been struggling recently with multiple management changes, a major security breach, and poor performance in its Canadian expansion.  While these are real issues (particularly the failures in Canada) they are somewhat reflected in the low price of Target stock.  If the new Canadian leadership can bail out this sinking ship Target is set for a major rally, if not there will be more blood-loss.

Shares of Target recently saw a dividend raise of 21% which is in line with their excellent history of being very generous with dividend raises.  This increases Target's payout ratio to 56% however future dividends could be in jeopardy if things do not improve.  Sounds like my cup of tea!

For my second purchase I bought 108 shares of SPLS at $11.14 per share for a total price of $1213.11.  Yuck another beleaguered retailer?  Well not so fast, Staples has been cutting costs recently by closing unprofitable brick and mortar stores around the country while ramping up their online operations. Staples is now the third largest global online retailer after Amazon and Apple.  Staples has an incredibly low debt and excellent free cash flow.  The dividend is secure and has seen steady admirable growth over the last five years.  Major insider buying is also another positive sign.

With these two purchases and the raise from target my yearly dividend income has increased from $1964.4 to $2085.12

2014 May Dividend Income, Spending, and a Pair of Trades

It's looking like my posts will be a bit fewer and far between while I settle in to my new house and get hooked back up to the internet.  So for the sake of efficiency I will probably be combining posts for the next few months.  For this month I present to you May's earnings, spending, and a few early month portfolio trades!

May Spending 2014

I accidentally blew my budget for the month of May.  I had to pay closing costs on my home purchase and pick up a lawn mower and weed eater to attack a lawn that had been neglected for almost a year.  With a few other essential home purchases I ended up spending a total of $2526.00 for the month.  Here is the spending breakdown!

The Misc Expenses, and Food and Dining categories were my biggest costs for the month.  Misc expenses includes my final closing costs, yardpocolypse equipment, moving truck fees, and a few smaller house items.  The food and dining budget was also part of the cost of moving as I took my friend and his fiance out for dinner and drinks to pay them back for helping me move(money well spent!)

While I was not able to meet my goals this month, going forward I am in a significantly better position to save money on both utilities and rent.  

May Dividend Income

My dividend income for May is as follows:

PSEC:  $11.04

KMI:    $18.90

For a total earnings of $29.94.  While this number still seems small, I have managed to double last quarter's (February) earnings.  I am extremely happy with this outcome and really look forward to blowing this number away this coming August.  Here is a breakdown of this months dividend income, and dividend income to spending.

Total dividend coverage to spending this month was 1.25%  This beats last February's 0.62% even considering I spent significantly more in May.  I am extremely happy with this outcome and am excited as to what the future holds.

Early June Portfolio Shake Up

Early in June I made the decision to sell off a few positions in my portfolio that do not meet my overall investing goals.  My typical investments are in dividend growth or high yield stocks.  While I plan on building my portfolio with rock solid blue chip investments I also occasionally dip into the foreign markets or industries with high yield stocks that have not recovered fully after the recession.  Two of my positions in my portfolio did not meet these criteria.  INTC and CHK.  Neither company has been successful at raising dividends in an extended time period, and they aren't my favorite high yield distressed companies. 

I took $600 of my own money and sold my positions in INTC and CHK (both for a profit), using the money to purchase shares of VZ and NAT.  I bought a total of 36 shares of Verizon for a price of $1797.12 and 157 shares of NAT for a total of $1307.81.  After the smoke cleared my new 12 month forward dividend income sits at $1964.40 per year.  My portfolio has been updated to reflect the new changes.

I am currently closely monitoring everything currently in my portfolio and RY, TD, and GM for a possible purchase later this month.

Thanks for reading and I hope you had an amazing May!

April 2014 Dividend Income, May Purchases, Dividend Raises and an Update Oh My!

May has been one of the craziest and busiest months of my life.  Not only have I been working long days (up to 14 hours/7 days a week) I have also closed on a house and moved in my spare time.  The end of May marks a brief reprieve from the long hours at work.  In the mean time I have missed out on many updates for you!.


April 2014 Dividend Income

The month of April marks my fourth month of investing in income and dividend growth stocks.  April was my largest harvest yet and I totaled $66.55 of income compared to $14.97 from January.  Compared to my spending of $1868.00 for April this dividend covers 3.56% of my total costs.

May Stock Purchases     

Thanks to the healthy dose of overtime I was able to make many purchases in the month of May.  May marks another month of investing in beleaguered income investments.  While I would normally choose to place my money in stable dividend growth champions and aristocrats I could not ignore the prices of some of my favorite income stocks.  I have been rewarded with capital appreciation of ~15%  from my purchase of SDRL last month and hoped to continued the trend.  

I purchased 200 shares of PSEC at a price of $10.55 per share.  This increases my yearly forward dividend income by $264.96.  PSEC currently boasts a $0.1104 per month dividend.

I purchased 31 shares of GLPI at a price of $34.28 per share.  This increases my yearly forward dividend income by $64.48.  GLPI currently boasts a $0.52 per quarter dividend.

I purchased 112 shares of AWLCF at a price of $22.24 per share.  This increases my yearly forward dividend income by $515.20.  AWLCF currently pays a dividend of $1.15 quarterly.

This is a total increase of $844.64.  

The shares of PSEC were bought in two transactions.  The first occurring the day before a 5% drop in share prices due to the announcement by the SEC.  Shares are now down significantly to the $10.00 range.  While I still like the company there are some important factors that need to be addressed before I will purchase more.  I am currently less worried about the SEC investigation and squeeze on the BDC market overall from de-listing from major indices than I am about PSEC's ability to continue dividend coverage.

GLPI marks my first REIT purchase and exposes me to both the REIT and gaming industries.

AWLCF is my favorite offshore drilling play on the market at this time.  The company pays the vast majority of its income from its two rigs out as dividends.  This is quite possibly the most risky and intriguing play in my portfolio.  The dividend is currently sitting over 20% and would absolutely be unsustainable if anything disastrous were to happen to either of the rigs.  Currently both of the rigs are contracted out and receiving increased dayrates in the near future.  I am under the opinion that AWLCF greatly benefits in the current tight offshore drilling market by having only two rigs, making it easier to secure contracts and maintain efficiency.

May Dividend Increases 

Two positions in my portfolio increased dividends in May.

SDRL increased it's dividend from $0.98 to $1.00  this increase of ~2% marks the fifth quarterly increase in a row for the company.  Shares of SDRL have also rebounded greatly in the last month and a half.

AWLCF increased its dividend from $1.10 to $1.15.  This marks the third time that AWLCF has raised its income in the last year and is an increase of ~4.5%.

With these new purchases and dividend increases my current yearly forward dividend income is now $1799.37.

When I get access to internet on my personal PC again updates should return to the normal rate and I will update my portfolio page.  Hopefully you all had a fantastic May!

My current watch list for June purchases:  NAT, GM, VZ, RIG

Disclosure:  Long AWLCF, GLPI, PSEC

April Bonus Buy

After my Seadrill purchase I have been analyzing many other offshore drilling companies.  The sector has recently been beat up over fears that major oil companies are pulling back on ocean drilling operations.  After heavily researching the major players in this sector I have narrowed my search down to 4 target companies that I added to my watch list.  Earlier in this month I pulled the trigger on one of these companies picking up shares of Seadrill.  I still consider this sector a risky play however I also see great potential upside.  On Monday I made another purchase after delving through financials picking up 45 shares of Awilco drilling (AWLCF).

Awilco is a much smaller company than Seadrill operating two semi submersible drilling rigs.  The company operates out of the UK and trades on the Norwegian stock exchange.  Awilco chooses to pay out the majority of its profits in dividends currently paying out a 20.16% yield at the time of this writing.  With just two rigs, Awilco is a very risky play because damage caused by inclement weather or an accident could set back their profits in a big way.  Furthermore Awilco has scheduled maintenance on both of their rigs in 2016 which will put them each out of service for two months for upgrades (having worked in a shipyard I know how these things can drag out past the planned two months.)  With cash on hand, and the rigs contracted out for many years to come for increasing dayrates, Awilco should see a nice boost in profit next year.

With this purchase my forward yearly dividend has increased from $741.77 to  $939.77.  My portfolio has been updated to reflect this change.  Do not be surprised if I buy two more drillers for my next purchases, and remember that I am extremely tolerant to risk. Remember to read my disclaimer before following me in any stock purchases.

Disclaimer:  Long SDRL, AWLCF

April 2014 Stock Buy

A new month brings a new stock for the portfolio.  With the recent sell off in the market I decided that it was the perfect time to go bargain shopping.  One of the stocks that has been sitting on my watchlist dropped down below my target threshold today and I just had to make the move.  I set my alarm and woke up in the middle of my sleep period (I work nights) to make a quick market check and pick up shares of beleaguered offshore drilling MLP Seadrill (SDRL).  I spent a total of $1,428.56 and bought 43 shares at $32.99 a pop.

While this article is by no means meant for analysis I will give an extremely brief breakdown of why I picked this company.  Seadrill has been under fire lately as there is an expected lull in the deepsea drilling industry due to increased production from oil shale.  Seadrill also carries a large debt load and pays out the majority of its profits in its dividend.  But even with all of these issues the company still pulls in enough profit to pay its bills and maintain/grow the newest fleet of offshore rigs of any drilling company in the world.

It is my opinion that this position carries more risk and potential upside than any other position in my portfolio.  In the past 6 months shares of Seadrill have declined 27.66% and I don't know if they will continue to decline meaning I could be trying to catch a falling knife here.  As an engineer I analyze risks every single day and for me personally I am willing to assume the risk at this price point.

I look forward to writing more detailed articles once I have returned back to a more manageable work/life balance.

Seadrill's dividend is currently frozen at $0.98 per share which gives me a yield on cost of 11.88%.  Adding 43 shares I have increased my 12 month forward dividend by $168.56 of ordinary dividend income.  My new yearly dividend income sits at $739.85.  It is not yet half way through the year and I have now reached my original goal of having $700 in forward dividend income by the end of the year.  I am also well on my way to smash through the $900 adjusted goal that I came up with.  At this rate assuming a 3% yield on future investments I will need to invest just over $5,000 in the next 8 months to reach this rate.  My portfolio has been updated to reflect this new purchase.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

                                                                                                                     -Warren Buffett

Disclaimer:  Long SDRL

March 2014 Bonus Buy

Well it's still March but I couldn't resist making a new purchase (stocks are my comfort food).  One of the benefits of working insane hours (up to 13's now) and graveyard shifts means they compensate well in return. This morning I decided to pull the trigger on 45 new shares of pipeline giant KMI (Kinder Morgan) at $31.89 per share.  This was an investment of $1,435.05.  KMI currently pays out $0.41 per share which works to increase my total yearly dividend by $73.80.  This brings my forward yearly dividend from $497.49 up to $571.29.

This brings me one step closer to hitting my goal of $900 forward dividends by the end of the year.  Right now, assuming a 3% interest rate on future investments this, would require an investment of $10,957 new dollars or $1,217.44 per month for the rest of the year.  I am still hoping to write articles about PM, and KMI to further explain my purchases but for now I will be holding off until time becomes less constrained.

My portfolio has been updated to reflect this new purchase.

Disclosure:  Long PM, KMI

March 2014 Stock Buy

It's stock buying time and here are my results for March 2014.  I may need help because it seems like I have an addiction... to tobacco stocks.  This morning I purchased 13 more shares of PM (Phillip Morris) at $80.24/share for a total cost of $1,043.12.  This satisfies my goal of buying at least $1,000 worth of stocks each month, but most importantly PM is currently paying $0.94 per share quarterly increasing my dividend by a total of $48.88 per year for a new forward yearly dividend of $492.09.  

In order to reach my goal of $900 in forward yearly dividends by the end of the year I would need to invest about $13,600 or  about $1,510.8 per month at a 3% return rate.  This is going to be a serious challenge because I have recently made an offer on a new house which if successful will eat into my emergency fund.  If this new house deal goes through I will more than likely stick to my $1,000 per month while I refill the war chest.  Regardless I am confident that I will meet my original goal of $700 per month in forward dividends.

My portfolio has been updated to reflect this new purchase.  

Disclosure:  Long PM

What stocks are you buying this month?

February Stock Purchase

This morning marked a pretty big event in the history of this blog... my first stock purchase.  As alluded to in my previous entry I decided to make the jump and pick up shares of Altria.  I bought 40 shares of MO at a price of $35.18 per share for a total cost of $1,407.20.  This satisfies my monthly goal to invest $1,000.  Most importantly Altria is currently paying $0.48 per share in dividends, increasing my yearly dividend by
$76.80 for a total new yearly dividend of $440.61.

This purchase brings me closer to my yearly dividend goal of $700.  For the sake of challenge I have decided to alter this goal to attempt to hit $900 of forward dividends per year by the end of December 2014.  With this new goal I have 10 months to increase my dividend by $459.39.  I believe this new goal should provide a more adequate challenge as most stocks I invest in will likely not have a 5.4% yield like Altria.

This purchase weighs my portfolio rather heavily in the tobacco industry with my previous position in Phillip Morris.  Going forward this will be corrected as I choose new stocks monthly and diversify my portfolio more.

Always remember to read my disclaimer before following me in any and all stock purchase decisions.