All About Interest

One man's journey to financial independence.

Options Update – December 2017

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Well, the markets are on a tear.  This has helped my puts become more profitable.  I continue selling puts against companies I want to own more of and using proceeds to purchase more shares of these companies.

Below are all my trades since July of this year:

Date Action Ticker Expiration Strike Call/Put Qty Price Net close Price closeout
7/6/2017 Sell MO 1/18/2019 90 Put 1 $19.00 $1,894.55 20.25 -$130.45
7/6/2017 Sell MO 9/21/2018 75 Call 1 $5.15 $509.55
8/11/2017 BTC MO 9/21/2018 75 Call 1 -$2.12 -$217.45 $292.10
7/6/2017 Sell BDX 1/19/2018 210 Put 1 $18.00 $1,794.55
12/1/2017 BTC BDX 1/19/2018 210 Put 1 -$1.38 -$143.45 $1,651.10
7/6/2017 Sell MDT 6/15/2018 97.5 Put 1 $11.25 $1,119.55 11.25 -$5.45
7/6/2017 Sell JNJ 6/15/2018 150 Put 1 $19.50 $1,944.55 10.6 $884.55
7/20/2017 Sell V 6/15/2018 115 Put 1 $17.50 $1,744.55 6.8 $1,064.55
7/20/2017 Sell V 1/18/2019 130 Put 1 $31.75 $3,169.55 19.25 $1,244.55
8/10/2017 Sell ESV 1/18/2019 15 Put 2 $10.50 $2,094.55 9.81 $132.55
8/9/2017 Sell Teva 1/18/2019 37.5 Put 1 $19.30 $1,924.55 19 $24.55
8/9/2017 Sell Teva 1/18/2019 30 Put 1 $12.20 $1,214.55 11.8 $34.55
8/10/2017 Bought Teva 9/1/2017 17 Call 2 -$1.28 -$261.45 -$261.45
8/10/2017 Bought Teva 9/15/2017 17.5 Call 5 -$1.37 -$690.45
9/12/2017 STC Teva 9/15/2017 17.5 Call 5 $2.29 $1,139.55 2.29 $449.10
8/8/2017 Sell GIS 1/18/2019 67.5 Put 1 $12.30 $1,224.55 11.5 $74.55
10/19/2017 Sell GIS 1/18/2019 67.5 Put 1 $16.90 $1,684.55 11.5 $534.55
8/2/2017 Sell MO 9/21/2018 80 Put 1 $17.50 $1,744.55 10.6 $684.55
9/7/2017 Sell MO 1/18/2019 90 Put 1 $28.50 $2,844.55 20.1 $834.55
10/17/2017 Sell V 12/20/2019 160 Put 1 $52.52 $5,246.55 48.95 $351.55
10/25/2017 Sell T 9/21/2018 40 Put 2 $7.30 $1,454.55 4.45 $564.55
10/26/2017 Sell BBL 6/15/2018 35 Put 1 $2.55 $249.55 1.55 $94.55
10/30/2017 Sell CVS 1/19/2018 80 Put 1 $11.90 $1,184.55 8.85 $299.55
12/11/2017 Sell CVS 1/18/2019 77.5 Put 1 $10.42 $1,036.55 10.9 -$53.45
10/31/2017 Sell OHI 6/15/2018 29 Put 1 $2.50 $244.55
12/18/2017 BTC OHI 6/15/2018 29 Put 1 -$2.45 -$250.45 -$5.90
11/13/2017 Sell HBI 1/18/2019 20 Put 1 $3.00 $294.55 2.1 $84.55
11/14/2017 Sell WMT 3/16/2018 100 Put 1 $10.85 $1,079.55 4.95 $584.55
12/01/17 Sell BDX 3/16/2018 230 Put 1 $10.93 $1,087.55 12.5 -$162.45
12/01/17 Sell Teva 1/18/2019 32.5 Put 3 $17.20 $5,154.55 14.35 $849.55
12/11/17 Sell RDSB 7/20/2018 60 Call 1 $6.34 $628.55 6.34 -$5.45
12/15/17 Sell PG 9/21/2018 92.5 Put 1 $5.20 $514.55 5.2 -$5.45
12/15/17 Sell GE 9/21/2018 18 Put 3 $1.64 $486.55 1.6 $6.55
12/15/17 Sell CHD 7/20/2018 50 Call 1 $2.78 $272.55 2.85 -$12.45
TOTALS $43,419.70 $10,098.70

The last update on trades had generated $26,390 in revenues. I’m approved for “naked” options trading meaning I can sell puts on companies I don’t own and without having the cash to purchase said security. My collateral is owning shares of companies to cover.  This update shows I’ve now generated $43,419.70 in revenues. The closeout column is what my total profit will look like if I closed out all trades today.  It’s up to over $10,000 from about $1,500 in the last update.  The difference in the revenues and profits is what it would cost me to close out all the trades, about $33,000.

Note: These profits won’t include dividends which I do receive from investing in other dividend paying stocks with the revenue.

On 12/01, I closed out my BDX put for a profit of $1651.10.  I think this is my single best put option to date.  My MO puts are starting to look better than the last update.  I still like Altria for the long-term and if I get assigned shares I’ll be ok with it. Teva shares are way up from the bottom and my puts are looking better also.

My V puts continue to rock & roll! V is a wonderful company and I believe shares will continue to beat the market for a while. This is why I’ve sold 3 large deep in the money puts for a nice revenue stream. I’d profit over $2500 from V if I closed the 3 puts I have outstanding.  This is up from about $1500 in my last update.

So what happens in the case that one of these companies is lower near expiration (in the money)? Well, I have a few options.

a. I can do nothing and I’ll be required to purchase 100 shares of said security at the strike price. It’s sort of like I’m buying the company right now at a discount.

b. I can decide to purchase back the put for more money at a loss of approximately ($71/share – current share value) x 100.

c. Third option is to “roll” the put forward. What this means is that I simultaneously purchase the put back and sell another longer dated put so that I haven’t lost any money.

Any profits will go directly into purchasing more shares of solid dividend-paying companies.

This is just another avenue I’m using to earn additional profits so that I can get this dividend snowball moving faster.  I’m still targeting my next goal of $12,000 ($1,000 a month) in forward dividends by March of 2018.  My forward dividends are currently  $10,826.  I’ll need to put to work about $39,000 at a 3% yield in the next few months.  With tax season coming up this might post a challenge but I love challenges.  Wish me luck!

Rental # 3b is Leased

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Wait just a second!  How did you have rental #3 if you didn’t buy another rental property you may ask and what is 3b?  Well, ok so here’s what happened.

I decided to call it quits with the restaurant.  The building is wonderful but I just decided the restaurant business wasn’t for me.  So I sold the business but still retained the building.  The tenant I sold the business to didn’t work out and long story short,  defaulted on their 3-year lease after just 3 months.  Yes, I had to evict them, there’s a first time for everything.

In the meantime I’ve rented the upstairs which is where I was living before I purchased a new home in another town about 30 minutes away.  My wife and I are now in a regular home which I think will be better to raise a child in.  Anyways, the upstairs is a wonderful 2,000 sq ft , 2 bedrooms 2 1/2 bath property with all real hardwood floors and awesome updates, granite counters, crown molding and custom woodwork throughout, etc.  I listed the property for lease on Zillow and had 3 people that wanted it within a week.  I realize I may not have asked enough for the property.  I have leased the upstairs of the building for $1,200/month on a 1-year lease.  The bottom floor is where the restaurant was housed and is currently for lease.  I have a few good prospects and hope I can close one before the new year.  I need to get this thing cash flowing!

There’s lots of NEW coming in 2018.  New house, new job, new income sources, plans for aggressively growing my passive income stream!

Here are the numbers on the property:

Unit A – Downstairs, 2 bathrooms plus restaurant – approx 2000 sq. ft.
Unit B (this is what is currently rented) – Upstairs, 2 bedroom, 2.5 baths – approx 2000 sq. ft.

Monthly Liabilities:
Insurance (Commercial Property & G/L): $3011  or $250.92/mo
P&I: $1524.95
Taxes: $614/mo
————————————-
Expenses – $2389.87
Estimated Vacancy & Maintenance (10%): $300
———————————————————————–
Total Expenses – $2689.87
Current Rent: $1200 (Leased until December 2018)
=================================

I’m in the hole $1,489.87 right now.  I plan to have a tenant in the building by January at a rent of $2,000/mo where it’s at least cash flowing.  It’s not a high cash flowing property so I currently have the building listed for sale.

 

The picture is from a trip to Thailand in 2016.  I noticed one of the original bloggers I followed had moved to Chiang Mai and figured I’d post a Thailand pic.  I’m obviously supporting the local beer!

 

Update on Baby AAI’s Stock Portfolio

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Baby AAI is only crawling and has little cares in the world besides food, playing and his parents. However he’s got a portfolio that’s compounding for him already. Here’s a look at the first stocks I purchased and how I expect that portfolio to perform until his 18th birthday.

I funded Baby AAI’s account with an initial $7500 and have been contributing $100/week since 02/27/17, so 35 weeks. That’s a total of $11,000 in contributions.

You can see the stocks I have purchased so far are Carters (CRI), Hanes (HBI), Disney (DIS) and Pepsi (PEP).

Depending on how successful we are with the stocks that have already been purchased will determine whether we go on to buy any more in the near future or not. Of course, I would love to make as much money for Baby AAI as possible, as this could provide him with a great life, in terms of his financial situation anyway. Those who have already invested in different stocks within the stock market will know that their prices can increase or decrease at any given time, but this is a risk that you must be willing to take.

If our journey is successful, I think I may decide to invest in a Henkel Aktie (Henkel Share) in the hopes that this too can increase the ROI that I have already earned in my portfolio. I’ve heard it has great profits, so this shouldn’t be too hard to achieve. But, we will be playing it by ear for now at least.

This is a very short time to start looking at gains and losses. The account is currently valued at $11,105.22. That’s just a 1% increase. However, this portfolio has a long time to compound, all shares are currently turned on to DRIP. You can see I’ve already been able to purchase fractional shares by DRIPing into CRI, DIS and HBI.

So how do I expect this portfolio to perform. Well I did the math for you, and I’m hoping to achieve a 7% growth rate which will put the balance right at $200,000 by the time he’s 18. That’s by doing nothing else but contributing $100/mo and letting the power of compounding work its magic. I used a simplified actuarial formula assuming $7500 contributed right away and $5200 ($100/month) contributed at the end of each year.

Here’s a graph of what the value should be at the end of the year, of course the stock market has large swings up and down so this is in a perfect world of 7% compounding each year.

So basically, by the end of the first year, February 27, 2018, the portfolio should be valued at $13,225.00. My total contributions will be just over $100,000. You will notice that it takes a little over 12 years to reach this $100,000 number and less than 6 year later it doubles.

It will be fun to watch this portfolio grow! What do you think?

 

 

Forward Dividends Push Past 10,000 After AT&T (T) Purchase

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That’s right, I’ve made it past a huge milestone today of 10,000 in forward dividends.  That means my portfolio will pay out over $10,000 in dividends over the next 12 months not counting any additional purchases or increases to dividends.

I had a trigger set up for AT&T when it hit a certain yield put that went off today.  I decided to take advantage of weakness and purchased a full-sized position of 200 shares at a cost/share of 34.01.  I see a lot of support at this area for AT&T and another .01 dividend increase should happen fairly soon.  CFRA, formally S&P Capital IQ, has them rated as a buy with a 12-month target of $42.  I see upside potential here and a nearly 6% dividend to boot.  I’m happy parking some money here for a while.

Below is from my dividends tab.  Now, I don’t post nearly as often as I used to about my trades, and I hope to change that, but I do keep my portfolio and dividend page updated in real-time.  I use my google sheet to check my stock values all the time so these pages stay very updated.  You can see in red the companies that have already increased their dividend this year with the purple highlights last year’s increase in that month.

 

You might also notice the dividend weight column.  This is an interesting metric I like to look at as well.  It might be concerning to some that nearly 30% of my dividend income comes from 3 stocks, MO, OHI and RDS-B.  However, these 3 companies only make up 18% of the value of my portfolio.  So you can see how the high/low yields can drastically change the dividend weight.  For instance, V is currently a 5.79% weight in my portfolio for value but only 1.24% of the dividend weight due to the smaller yield.

How is everyone else doing? My next stop will be $1,000/mo in income or $12,000 year.  I hope to hit that mark in the springtime.

Update on Options Activity

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Below are the actual trades:

Date Action Ticker Expiration Strike Call/Put Qty Price Net close Price closeout
7/6/2017 Sell MO 1/18/2019 90 Put 1 $19.00 $1,894.55 28.5 -$955.45
7/6/2017 Sell MO 9/21/2018 75 Call 1 $5.15 $509.55 2.12 $297.55
8/11/2017 BTC MO 9/21/2018 75 Call 1 -$2.12 -$217.45
7/6/2017 Sell BDX 1/19/2018 210 Put 1 $18.00 $1,794.55 4.9 $1,304.55
7/6/2017 Sell MDT 6/15/2018 97.5 Put 1 $11.25 $1,119.55 11.25 -$5.45
7/6/2017 Sell JNJ 6/15/2018 150 Put 1 $19.50 $1,944.55 10.2 $924.55
7/20/2017 Sell V 6/15/2018 115 Put 1 $17.50 $1,744.55 10.5 $694.55
7/20/2017 Sell V 1/18/2019 130 Put 1 $31.75 $3,169.55 23.64 $805.55
8/10/2017 Sell ESV 1/18/2019 15 Put 1 $10.50 $1,044.55 9.81 $63.55
8/9/2017 Sell Teva 1/18/2019 37.5 Put 1 $19.30 $1,924.55 20 -$75.45
8/9/2017 Sell Teva 1/18/2019 30 Put 1 $12.20 $1,214.55 15.42 -$327.45
8/10/2017 Bought Teva 9/1/2017 17 Call 2 -$1.28 -$261.45 -$261.45
8/10/2017 Bought Teva 9/15/2017 17.5 Call 5 -$1.37 -$690.45
9/12/2017 STC Teva 9/15/2017 17.5 Call 5 $2.29 $1,139.55 2.29 $449.10
8/8/2017 Sell GIS 1/18/2019 67.5 Put 1 $12.30 $1,224.55 16.19 -$394.45
8/2/2017 Sell MO 9/21/2018 80 Put 1 $17.50 $1,744.55 17.25 $19.55
9/7/2017 Sell MO 1/18/2019 90 Put 1 $18.50 $1,844.55 28.5 -$1,005.45
10/17/2017 Sell V 12/20/2019 160 Put 1 $52.52 $5,246.55 52.8 -$33.45
TOTALS $26,390.90 $1,500.35

The last update on trades had generated $7262 in revenues. I’m approved for “naked” options trading meaning I can sell puts on companies I don’t own and without having the cash to purchase said security. This update shows I’ve generated $26,390 in revenues.  The closeout column is what my total profit will look like if I closed out all trades today.

Note:  These profits won’t include dividends which I do receive from investing in other dividend paying stocks with the revenue.

My BDX put is killing it, I could close out with nearly a $1300 profit in a short amount of time!  The MO puts are killing me though.  However, I like Altria for the long-term and if I get assigned shares I’ll be ok with it.  I had a couple of speculative calls expire with Teva for a loss of $261.45.  However, I earned $449.10 on another 5 calls I bought and then sold on 09/12.  Teva remains a large speculative position for me.  I don’t see them going bankrupt but I do see shares under pressure until the new CEO can get things going again.

My V puts continue to do well.  V is a wonderful company and I believe shares will continue to beat the market for a while.  This is why I’ve sold 3 large deep in the money puts for a nice revenue stream.  The first two puts would profit about $1500 if I closed them out today.

So what happens in the case that one of these companies is lower near expiration? Well, I have a few options.

a. I can do nothing and I’ll be required to purchase 100 shares of said security at the strike price. It’s sort of like I’m buying the company right now at a discount.

b. I can decide to purchase back the put for more money at a loss of approximately ($71/share – current share value) x 100.

c. Third option is to “roll” the put forward. What this means is that I simultaneously purchase the put back and sell another longer dated put so that I haven’t lost any money.

Well the good news is that I’m in the positive on these trades.  This is in my speculative account but I still target mainly dividend paying companies that I want to own or already own anyways.  Any profits will go directly into purchasing more shares of solid dividend-paying companies.

How I generated over $7,000 in one day of options trading

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I’ve decided to keep track of my options trading again and I’ve started this month with a bang.  Yes, it’s a catchy title but please let me explain.

Below are the actual trades:

Date Action Ticker Expiration Strike Call/Put Qty Price Amount Fees Net Days to Exp Current Price 52wk range
7/6/2017 Sell MO 9/21/2018 75 Call 1 $5.15 $514.96 $5.45 $509.51 558 $74.25 60.82 – 77.79
7/6/2017 Sell MO 1/18/2019 90 Put 1 $19.00 $1,899.93 $5.45 $1,894.48 439 $74.25 60.82 – 77.79
7/6/2017 Sell BDX 1/19/2018 210 Put 1 $18.00 $1,799.93 $5.45 $1,794.48 194 $197.79 161.29 – 197.85
7/6/2017 Sell MDT 6/15/2018 97.5 Put 1 $11.25 $1,124.95 $5.45 $1,119.50 341 $87.96 69.35 – 89.72
7/6/2017 Sell JNJ 6/15/2018 150 Put 1 $19.50 $1,949.93 $5.45 $1,944.48 341 $132.54 109.32 – 137.00

The total of these trades gave me a little over $7262 Net.  I’m approved for “naked” options trading meaning I can sell puts on companies I don’t own and without having the cash to purchase said security.  Now, I do have a covered call on MO since I own 100 shares and sold 1 call.

My put selling was 3 giant medical companies plus MO.  These companies are not going anywhere and I don’t mind purchasing shares if needed.  I’m basically asking mr. market to give me some assistance in sending their share prices higher.  For instance, if shares of Johnson and Johnson are over the strike of 150 on 06/15/18 then the put will expire worthless and I’ll keep the entire $1,949.93 as profit.  Let’s say JNJ is trading at 135 around expiration, about 15 off where I want it.  That means the put is worth 15 x 100 or $1500 to buy back if I choose not to execute it.

Am I crazy you might ask? No, not entirely lol.  So what happens in the case that one of these companies is lower near expiration?  Well, I have a few options.

I can do nothing and I’ll be required to purchase 100 shares of said security at the strike price.  It’s sort of like I’m buying the company right now at a discount.  For instance, MO is at $74.25/share.  I have to pay $90/share but I received a $19 premium or $1900 which is the same as if I purchased the company for $71/share.  Now I would miss a couple of dividends but I’m still better off with the put.

I can decide to purchase back the put for more money at a loss of approximately ($71/share – current share value) x 100.

Third option is to “roll” the put forward.  What this means is that I simultaneously purchase the put back and sell another longer dated put so that I haven’t lost any money.  I’ll show you guys how this works around expiration if needed.

Well, here you are.  My crazy put selling frenzy!  I need medical companies to stay in favor and I’ll be a happy camper.

Recent Sell And New Purchases

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I sold out of my position of CSX recently.  I decided the company has ran up enough that I could deploy the funds into better areas.  Between the health of the new CEO, the fact that shares are now at a P/E of 30 and yield just 1.5% after running up significantly this year, I decided to exit my position fully.

I sold 252 shares of CSX for $52.92/share netting $13,331.   My basis was $23.43/share, well over a 100% return and it’s a long-term capital gain since I’ve held shares over 1 year.

So this was a nice chunk of dry powder left after the sale.  Here’s what I did with the money and how my income changed.

SOLD

252 shares of CSX – Loss of $201.60/year at $.80/year or about 1.5% yield , proceeds of $13,331

PURCHASED

50 shares of XOM – Cost $4,100 – $154/year in income
20 shares of DIS – Cost $2,000 – $31.20/year
50 shares of MO – Cost – $3,718.00 – $122.00/year
16.45 shares of SBUX – Cost $1,000 – $16.45/year
17.79 shares of RDS.B – Cost $1,000 – $66.89/year
10 shares of CVS – Cost about $750 – $20/year
4 shares of AMGN – Cost about $750 – $18.40/year

*note some of these stocks were purchased in my sharebuilder account to avoid excessive commissions.

Grand Total = $428.94 or 3.21% yield. 

I was able to increase my yearly dividends by $227.34!

What do you guys think?  I’ve diversified my income into 7 positions yielding more than double what I was before.  Anyone else with recent sells?

 

 

 

June 2017 CCC Dividend Stock Rankings

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ncf_power_ranking_b3_576.jpg

It’s been a while since I’ve done one of these and the market is up quite a lot so it will be interesting to see the outcome.

What I Did

I decided to take the CCC spreadsheet and rank the stocks based on their 10-year YOC. If you are unfamiliar with what Yield-On-Cost is (YOC) then refer to my get started tab or see below for an example. If you don’t know about David Fish’s Champion, Challenger and Contender (CCC) spreadsheet then you are doing yourself a disservice, the link is also on my “get started” tab. It’s important to know about yield no matter which kind of stocks you are trading, for example even if you’re working in the forex market you need to Learn how to trade properly, including all of the technical terminology, in order to make the most of your investment. Here’s an example of yield and its effects.

Let’s say you purchased a stock at $10/share in 2013 that paid a 4% dividend or $0.40/share. In order to achieve a 10-year YOC of 10% that stock would need to pay out at least $1.00/share by 2023.

You may wonder why I care about a 10-year YOC instead of just the 1,3,5 and 10-year CAGR’s. The main factor that the CAGR leaves out is the starting dividend yield. The starting dividend in combination with the dividend growth rate will greatly influence your returns.

There’s a variation of this screen used alot by members of the Seeking Alpha community and it’s coined the “Chowder Rule”. This can also be found now on the CCC sheets. The rule basically adds the starting yield with the dividend growth rate (5-year CAGR) and looks for it to be higher than a certain number. While this can be a useful screen, there is still a discrepancy between dividend payers that have different growth rates but still arrive at the same number. For instance, a 3% yielder with 5% growth would get the same grade (an 8) as a 5% yielder with 3% growth. To me this is like adding apples to oranges. Holding a lower yielding stock with a higher growth rate will at some point provide higher returns assuming the growth rates don’t change. My 10-year YOC would give this 3% and 5% yielder a 4.9 and 6.7 respectively.

Why I Did It

The purpose of this screening process will be to identify companies that have a high expected dividend growth rate combined with a starting yield that would produce greater returns. These companies may be good candidates for further research.

How I Did It

The first step was to sort all stocks by their current dividend yield and eliminate any stocks not paying at least a 2% yield.

Next I sorted all columns by TTM P/E and eliminated every stock with a TTM P/E over 20. I do realize this eliminates a lot of REIT’s, MLP’s, and telecom stocks. I’m ok with this since I’m not really targeting these stocks right now. Then I decided to eliminate any Champions with a 10-Year CAGR < 5%, followed by any Contenders with a 5-Year CAGR < 7 % and finally any Challengers with a 3-year CAGR < 7%. This screen eliminates a lot of slow growing companies like utilities. This last screen dropped the list of Champions, Contenders and Challengers to 12(-16), 41(-11) and 122(-10) respectively.

Next I took the latest CCC sheet and added some new columns to calculate a 10-year YOC using each stock’s 1,3, 5 and 10-year compound annual growth rate (CAGR). I will call these new metrics 10YOC1, 10YOC3, 10YOC5, and 10YOC10 for simplicity.

After sorting, I looked for any companies that had a 10YOC1, 10YOC3, 10YOC5 or 10YOC10 of 10% or higher. I applied this to the list of Champions, Contenders and Challengers.

Next, I wanted to look to see if the DGR was increasing or decreasing. I highlighted in red the 10-year YOC’s of companies that were both reducing their rate of increases and still under 10%.

This is a previous example of how it looked:

Companies got credit for increasing their dividends at faster rates. For example: The 10YOC5 for AWR in the example above was 4.97 and did not get highlighted in red because its 10YOC5 was higher than its 10YOC10 of 4.09.
Next, I decided to remove any company that had a 10YOC1 in the red for Champions and a 10YOC1 or 10YOC3 in red for Contenders and Challengers.

For the Example Champions list above this removed LEG, MDT, NUE and WMT.
This new round of elimination dropped the list sizes for the Champions, Contenders and Challengers to 2(-6), 13(-6) and 48(-37) respectively.

My Results (since the results were so small I decided to not eliminate Champions & Contenders based on P/E ratios this month)

Here are the 112(+9) candidates plus additional candidates not ruled out based on P/E left that may be worthy to do further research on:

Champions

Contenders

Challengers

On the Champions list, WOW, there’s only 2! Medtronic (MDT) and VFC Corp. This isn’t a surprise as retail stocks have done poorly as well as healthcare stocks after Trump took over. I do own MDT and have been thinking about adding to it. VFC stock also looks compelling.

Then there’s the Contender’s list with names like IBM and CVS which I own. I’ve added some CVS this year already. There’s also some other bank names I’m not too familiar with worthy of looking at.

The Challenger’s list is still large with all the financials and REITs. A lot of the banks have had 5 years since the Great Recession and are back on this list. I may have to add an additional screen soon for the challengers. There’s some solid companies on this list and if you find the right ones you will be handsomely rewarded. I’ve added some AMGN not too long ago. I’m not too familiar with the others besides CSCO and ABBV.

Keep in mind that this is just a starting point and I feel these companies need further research before making an investment.You can find previous months by following my CCC Rankings label.

*photo courtesy of ESPN

Review of the Intermatic ST01: The Best Low Watt LED Timer on the Market

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Intermatic ST01 7 Day Programmable In Wall Digital Timer Switch for Lights and Appliances, Astronomic, Self Adjusting, Heavy Duty

 

You may have seen my previous post: DIY: How to Install a 3-way programmable light timer.   One commenter was asking about a low wattage solution and I’ve been meaning to post an update on my new timers I’m using with LED light bulbs.  The install is essentially the same as the above link.

I purchased 4 of these Intermatic timers in December of 2015.  They have all been working flawlessly with LED bulbs and the install was super easy.

Key Features:

 

  • Set it once – follows daily changes for sunrise/sunset times
  • Single-pole or 3-way applications up to 100 feet
  • Controls all lighting and heavy-duty loads like fans and appliances
  • Up to 40 on/off settings per week
  • Incandescent/fluorescent/LED/CFL-compatible

I had a problem with the Honeywell timer working flawlessly with LED’s.  It needed a specific minimum load.  This timer works perfectly with one low-watt LED bulb. Mine are currently used for outside lights with candelabra type LED bulbs.

I’m currently using these FEIT bulbs exclusively with these timers with no issues:

Feit LED 4.9 Watt LED Candelabra Light Bulbs 3-Pack (911482)

A Baby’s First Stock

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One of the reasons for a lack of much posting has been the birth of our first child, a healthy baby boy. And what better way to start him out than to purchase his first shares of stock because setting your children up for the future is the best thing you could possibly do for them.

I opened a portfolio and purchased stock in three companies that I think have been beaten down lately and offer not only fair value but decent dividends as well.

The first company is of course, Carter’s, CRI. Maybe you’ve heard of Carters or Osh Kosh B’Gosh? If not then you don’t have any kids. These brands dominate the baby clothing category. Carters stock is sitting near $85/share down from over $110/share as a 52-week high. Shares yield nearly 1.8% with a low payout ratio of 27%. They are a dividend challenger, having paid increased dividends for 5 straight years! They also just purchases another company called Skip Hop that should add additional profits to the bottom line. CFRA (formerly S&P Capital IQ) currently rates them a 4-star buy with a 3-year CAGR of 16%.

This next stock is currently a 5-Star screaming buy from Morningstar. It’s one of only 9 stocks currently ranked 5-stars. Everyone knows and has purchased this brand, Hanes! Hanes owns Hanes brands obviously which is better known for their underwear and Michael Jordan commercials, they also own Champion, Bali and Playtex to name a few. The great thing about Hanes is that their brands are everywhere and they don’t need their own retail footprint. They sell mainly online and through major department stores. You’ll even find their stuff on Amazon. The stock is rated a 3-star buy from CFRA with a 3-year CAGR of 17%. HBI currently yields 2.6% with an extremely low payout of 10%. They are also a dividend challenger, having paid out higher dividends for 5 straight years.

Now this third stock is probably more well known within the DGI community as a popular stock. It also has a much larger market cap in comparison. The stock is Disney. DIS currently yields 1.5% and is a dividend challenger. They have paid higher dividends for 7 straight years. Morningstar gives them a 4-star raiting as well as CFRA.

I’ve purchased equal dollar amount in these three stocks and plan to make small contributions to the account on a weekly basis. I’ll be tracking the performance and adding new position or dollar-cost-averaging in current ones.

I thought what better way to teach a child dividend growth investing than to purchase stock in companies that he uses products from. The retail sector has taken a beating lately and I figured I’d pick up a couple stocks there that I believe will still be around when my son goes to college. These stocks have been added to my portfolio tab for tracking purposes.

 

 

 

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