I’m reporting my automatic purchases for this week:
I Bought:
$450 of BBL
$200 of MCD
$150 of ESV
*In a separate transaction, I also purchased another 100 shares of TD at $46.32/share.
I used $800 in new capital and added $47.89/year to my dividend income. This is an average yield of 6.0%.
Note:
BBL continues to be on my buying list. How low can it go? Morningstar gives BBL a 5 start rating! I’ll keep slowly averaging down until it’s a full position for me. BBL has endured a lot of weakness since announcing a de-merger where they are going to split up some of their assets into another company. I also believe a lot of weakness has to do with oil prices. BBL was heavily investing into North American shale plays and about 40% of their revenues come from China per their annual report.
Energy companies are beaten up hard. You’ll see me adding more to most of them and even ESV which is a speculative play.
MCD has come down in price to near my basis. I figured it’s time to start adding a little here and diversify out of energy somewhat.
Picture:
Just for some fun and to add some color I will be posting pictures of places I’ve been to. It’s also motivation to reach FI so I can travel and do what I want to when I want to.
Continuing the Portland series; This is a brewery I visited in Portland called Fat Heads. I had already posted one picture from this place.
Same thing for me, it’s been quite a number of weeks continuing averaging down with BBL.
I will most likely pick more on Tuesday I guess. Also considering to get some TD: btw I have to revise the yield I actually get for TD since last dividend I saw I got hit by a foreign tax for it.
I am also potentially thinking about some T + VZ. We’ll see.
Cheers
Fab recently posted…Automatic Purchases: BBL, CVX
Hi Fab,
Yeah, I hear you there. I haven’t adjusted my yield on TD just because I have always gotten it back on my taxes anyways since I don’t have a lot of foreign taxes. T makes up the majority of my Motif account, so I own T, VZ and VOD for telecoms. I’m likely holding what I have there for a while and keep building out the energy portion of my portfolio for the time being.
Cheers!
When there is a foreign tax for a stock, the broker tax documents will most likely show it but is there a specific IRS form to fill to claim that at tax time then?
Fab recently posted…Automatic Purchases: BBL, CVX
Hi Fab,
I believe it’s form 1116.
Merry Christmas!
We’re looking to average down also AAI. I’m just hoping this slide keeps up for a while. We’ve been letting cash build and it will be nice to put some to use. I see pockets of value, such as the super majors and the insurance companies. I initiated BBL earlier this week, and will be looking to add in the high $30s. I don’t like the debt load, but what really keeps me bullish is that shares didn’t fall much lower in the 2009 financial crisis. Now if we could just get the REITs to get hammered…..
Have a great weekend
-Bryan
Income Surfer recently posted…Some Thoughts on Berkshire’s P&G, Duracell Swap
Income Surfer,
You’re in a good position with a cash pile ready to pick some of these values in the market currently. Supposedly , the de-merger removes the less profitable piece of the company which may help the debt. I’m still averaging myself. I was hoping to grab another chunk of OHI but shares popped before I had the change. REIT’s have been flying high lately. Good luck with your purchases.
Thanks for stopping by!
I really like your MCD purchase to diversify your exposure in energy.
Tawcan recently posted…November dividend update
Tawcan,
MCD is close to my cost basis and has been paying rising dividends for many years. I plan to hold them long-term and will add on pullbacks. I really need to diversify but I expect the energy companies to rebound at some point and other sectors to be out of favor so I can diversify out of energy a little bit.
Thanks for stopping by!
at what point do you think its been so much drop and enough is enough that you either stop purchasing more of the stock or reduce buys (or even think about selling due to huge drop in value of shares ) ?
There seems to be no end to the drop in oil and its killing a lot of the companies which I think may turn out to be bad overall for the stock market ?
I hope because of such bad oil drop it doesn’t bankrupt a lot of the companies and even those that have been paying dividends. Not feeling too comfortable adding more due to all this mess. What are your thoughts?
Hi Irwin,
That’s a tough question. It really depends on the fundamentals of the company. A company like ESV is a lot more speculative than a company like Chevron. Unless fundamentals drastically change, I consider a drop in price just temporary and will continue adding shares. I continue to do this with most of the energy companies in my portfolio. If ESV can’t renew their contracts at a good rate then that would affect their earnings and fundamentals. I’ll be closely monitoring them.
Oil is cheap and is an input to many industries. It’s a big driver in the rest of the market right now. Companies that rely on transporting a lot of goods are making out big time on energy savings. It’s really only bad for the energy companies and it’s something that has happened before , I just don’t know how long that prices will stay here.
I don’t think you have to worry about the oil behemoths going bankrupt like XOM, CVX, BP, RDS.B, etc. There is a chance of a dividend cut which has happened in the past. That’s not an automatic sell for me in this industry. I accept the fact that the energy sector is very cyclical and comes with lots of ups and downs. However, it’s almost always up over a longer time horizon of say 10+ years. I think in 10 years, the prices on some of these companies will look great.
Thanks for stopping by!
BBL continues to drop further along with Oil declines. I add more this week after initiating position couple of weeks ago. Planning to add in small quantities through weekly purchases and lower my average price.
Dividend Growth Journey recently posted…Dividend Increase – GE
DGJ,
Indeed, BBL has taken a big beating. I am with you and will continue adding the stock at these levels until it’s a full position in my portfolio.
Best Wishes!
Like your buys in TD and MCD. I wish one day Chipolte starts paying a dividend and then I would be in!!!!!
Asset Grinder recently posted…$2,160,878 My Net Worth Update December 2014
AG,
Thanks! I love the Canadian banks and will add on weakness. I’ve thought about adding another one like RY but haven’t pulled the trigger yet. I have 3 banks based in 3 different countries currently; BBVA, WFC and TD. I figure that’s a decent amount of diversification.
I’m sure it’s just a matter of time for Chipotle to start paying. A lot of these growth companies need the extra cash to grow faster. At some point growth slows and they start to reward shareholders more.
Thanks for stopping by!