Category Archives: Blogging

Hello World Part 2

Time to hit the reset button and try this again.  I had to put the blog on hold for all of 2015 due to work, school and some unexpected life events.  However, I did continue to invest on a regular basis and have made very good progress towards my ultimate goal of retiring early.  I’ll be updating everyone with some 2015 investing review posts in the coming weeks.

At work I became a supervisor in the end of 2014 which I previously wrote about, then became a shift leader for a 24/7 control center in the beginning of 2015 and finally the manager of the same control center shortly thereafter due to several personnel departures in a very short time frame.  Basically went from just an employee to being charge of 15+ people in a less than 8 months increasing my work hours from 45 to 70+ per week along with 1-2 hours of working at home catching up on paperwork each night.  The military, like any large organization can be very similar to a corporate environment once you start moving up in the ranks and my life has become one filled with meetings, briefings, paperwork and dealing with employee issues non-stop.

On top of this I’ve continued working toward my Bachelor’s degree in Business Management and am now over 1/3 of the way done by taking classes online throughout the year and should pass the half-way mark at the end of 2016.  I also got a chance to travel to Texas this past summer for several weeks of training in San Antonio which I combined with some leave days visiting Denver, the Grand Canyon, Albuquerque New Mexico (saw all the Breaking Bad film locations 🙂 ), and Austin, Texas (along with a fun night at 6th Street seeing a ton of live music and drinking way too much beer).

While my workload at my job won’t be decreasing anytime soon, I’ve gotten to a point where I’ve adapted and can manage it better without needing to work so many hours so I’ll be returning to blogging and interacting with fellow members of the DGI/early retirement community online in the coming weeks.

Thanks for reading.

 

-SFZ

October Recap

Wow, what a crazy month! Huge market swings, lots of earnings reports, and major negativity surrounding the markets. Even after all the crazy (often irrational) market movements, the Dow closed October by hitting an all-time high of 17,390. Good thing I’m an investor and not a trader, and can ignore short-term market noise like this past month and instead just focus on continuing to save a large amount of my income and purchase income producing dividend growth stocks.

On a personal note, I am back home after taking a cross country road trip and visiting family and friends for the past three weeks. I had a great time as I was able to see people back home for the first time in several years. Nothing like a little time off once in a while to be able to relax. Now its time to get back to work and get back to some regular blogging updates as well.

Today I’d like to highlight some of the recent news from companies in my portfolio and watchlist.

Kinder Morgan (KMI)

The energy giant announced a 2.3% increase to its quarterly dividend from .43 to .44 per share. With expected 10% dividend growth moving forward as the Kinder Morgan companies consolidate under one umbrella, KMI, I really like the stock as a long-term holding and recently added some more shares to my portfolio.

Visa (V)

The global payment processing company reported strong 4th quarter earnings that has since sent the stock soaring to new highs. Glad I managed to add some more shares in September around $213 a share and didn’t wait. 4th quarter EPS of $2.18 beat estimates by $0.08 while revenue jumped 8.8% year over year. Payment volume grew 11% to a staggering $1.2 Trillion dollars. With China announcing recently that they are opening their market for clearing domestic bank card transactions, Visa looks primed to continued growing revenues, EPS, and dividends at a strong pace going forward.

Realty Income (O)

The monthly dividend paying company announced 3rd quarter Funds from Operations of .64 per share which missed estimates by .01. Revenue beat estimates and showed 16.6% growth from last year. If I wasn’t so heavily weighted in O (accounts for 23% of my projected annual dividend income), I’d probably pick up at some more shares here in the low $40’s.

International Business Machines (IBM)

What a month for IBM. And not in a particularly good way. Revenue growth continues to stagnate as the blue chip technology company reported a 4% decline in revenues for the 3rd quarter and abandoned their previous goal of $20 in EPS for 2015. In all fairness, the EPS was established by a previous CEO. However, EPS growth continues, albeit at a slower than expected pace as the company has begun focusing on improving and growing its business in key segments with an eye towards the future. From CEO Ginni Rometty on her company’s results, “We again performed well in our strategic growth areas cloud, data and analytics, security, social and mobile-where we continue to shift our business. We will accelerate this transformation.”

IBM also provided guidance for 2015 EPS which falls in  a range of $15.97 to $16.30. Applying a P/E of 13 which is where IBM has traded historically, we can come up with a fair value of $207.61 based on the low end of guidance. IBM also added another $5 Billion to their share buyback plan. While the lack of revenue growth is disappointing, I like that the company is aggressively buying back stock, cutting costs, and increasing margins in order to continue growing profits. IBM is a company in transition as they shed old businesses and focus their efforts in faster growing segments like the cloud. While it won’t happen overnight, I think IBM will turn things around and get revenue growing again in the future. Since the dividend is still well covered by earnings, I’m content to just collect the dividend and let it reinvest at low share prices in the meantime.

Aflac (AFL)

The insurer and dividend champion reported so-so numbers for its 3rd quarter report, earning $1.51 in profits missing estimates by 8 cents a share. Revenue beat estimates but still came in slightly lower than last year by 2.5%. Aflac also announced a 5.4% increase in their quarterly dividend to $0.39 a share and increased the size of their buyback plan from $1 billion to $1.2 billion which I like since it shows management is being smart when it comes to buying back stock on cheap valuations. The company also announced it plans to have a $1.3 billion buyback plan for 2015. Currency issues continue to hamper the company but with a low payout ratio, Aflac is set up to weather times like this without risks of dividend cuts or freezes. With the stock hitting 52 week lows, now may be a good time to add to or initiate a position in the company.

Disney (DIS)

Disney is a stock I’ve been looking at recently after reading a write-up by fellow blogger Brian over at Long Term Mindset. Disney recently announced a large slate of new Marvel movies that are expected to be released over the next 4 years.

Check out the list:
The Avengers 3-split into 2 parts in May 2018 and May 2019
Captain America: Serpent Society in May 2016
Doctor Strange in November 2016
Guardians of the Galaxy 2 in May 2015
Thor: Ragnarok in July 2017
Black Panther in November 2017
Captain Marvel in July 2018
Inhumans in November 2018

Pretty impressive, especially since this doesn’t even include the Lucasfilm Star Wars movies (the third trilogy of Episodes 7, 8, and 9 plus spinoff movies) which I am looking forward to as both an investor and Star Wars fan. Although DIS seems to always trade at a premium valuation, I’ve been coming around lately to the idea that this premium is deserved due to their strong growth prospects. I may start dollar cost averaging into a position via Loyal3 soon.

BP

Announced a 2.6% increase to their quarterly dividend to $0.60. While a relatively small increase, I’ll take it as BP’s high starting yield helps make up for it. The stock continues to trade at an attractive valuation compared to their peers and is on my shortlist for portfolio purchases after its recent pullback to the low $40’s. While its easy to get caught up in all the negativity surrounding the company regarding lawsuits over their oil spill, the company is still generating large profits and remains committed to steadily increasing their dividend.

J. M. Smucker (SJM)

Announced a 5 million share increase to their buyback program, bringing their total authorized buyback plan to 10 million shares which will retire about 10% of the company’s outstanding stock if fully executed. How cool is that? Another stock on my short list (I feel like I’ve said that a lot today, so many great stocks, so little capital! 😉 ), I’d prefer to buy it near the 17 P/E mark but may initiate a position sometime during the last quarter of this year or early 2015 if shares continue to trade around 19 times earnings.

 

Disclosure: I am long KMI, V, O, IBM, AFL, and BP and may initiate positions in DIS and SJM in the coming weeks/months.

How about your portfolio and watchlists? Any important news or events this month?

Blog and Watchlist Update

Hello all!  I’ve been away from the blogging world here the last 4 weeks as I’ve been very busy going through a training school for work.  I’ve spent this time learning the basics of everything I’ll need to become a supervisor in my work center and be responsible for my own troops.  Kind of felt like I was in high school again with all the homework.  😉  Now that I’m almost done, it’s time to get back to updating the blog.  Over the next few days I’ll be posting my progress updates for August.

Since I didn’t invest a whole lot in August, I’m sitting on some cash right now trying to decide which stock to invest in next in my taxable brokerage account.  Some of the stocks on my watchlist include Deere (DE) which has pulled back some after I initiated a purchase earlier this summer, Phillip Morris (PM) which is continuing to trade near the price I bought shares at in July and Visa (V).  Although Visa has increased a bit since my first purchase, the high growth dividend challenger is still trading at what I think is a fair valuation relative to their growth prospects.  Over at Loyal3, I plan on continuing to dollar cost average into Coca-Cola (KO), McDonalds (MCD) and Wal-Mart (WMT).  I’ll be sure to share once I make a purchase.

Hope everyone had a great summer!

-SFZ

 

Also, be sure to follow me on Twitter @startingfrzero where I like sharing some of the great blog posts and financial articles from around the web that I read.

 

Disclosure:  I am long all stocks mentioned.

Liebster Award Nomination

Thank you to Dear Dividend for nominating me for a Liebster Award. For those of you unaware what a Liebster Award is, it’s basically a way to discover and highlight newer blogs. You nominate a few other newer blogs and ask 5 questions to your nominees. Then your nominees can pass it on and nominate some other blogs. Great way to learn about and find some new blogs to follow.

So here are my answers to the questions DD asked.

1. Why did you start a blog?

-I think mainly it was to be able to interact with like minded individuals about investing and ideas about retiring early, something I don’t have a chance to do with people in my everyday life. I’ve met a ton of great people since starting this blog and its really helped me a learn a lot about investing.

2. What is your favorite quote?

-“Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re on.”

3. What is your favorite book?

-Wow, this is a tough one. I’ve been an avid reader since probably around 3rd grade so it’s tough narrowing it down to just one. I think I’ll cheat a little and list a few-Lord of the Rings, anything by John Grisham, Harry Potter series (showing my age with this one), and for the financial genre-Rich Dad, Poor Dad.

4. What is your favorite food?

-Pizza!!!

5. What is your favorite hobby?

-Another tough one, as I tend to bounce around quite a bit as far as what I like to do in my free time-guitar, bike riding, hiking, basketball, weight lifting etc. Probably writing would be number one though. Been into writing fiction ever since jr. high and now have really gotten into blogging about finances and investing.

 

Okay now for my nominations. Since I’m a little late getting into this and most of my ideas for nominations have already been nominated, I’ve chosen to highlight 4 here.

My nominations (in no particular order):

1. Dividendasaur-Neil started his blog around the same time as I did so it’s been cool following his journey from the beginning. In addition to investing in some of the common dividend growth stocks, Neil also highlights a lot of lesser known names that are always interesting to read about.

2. Long Term Mindset-Brian blogs about dividend investing with a focus on companies with strong growth potential like Starbucks, Mastercard, Visa, etc. which is a nice change from all the blogs talking about buying Coca-Cola every month (wait, that sounds like me 😉 ).

3. The Dividend Way-TDW is fellow 21 year old blogger and business student from Finland and one of the first bloggers I interacted with when setting up Starting From Zero. Recently opened a new brokerage account and has been investing in American dividend champions.

4. Dividend Digger-Brand new blog (with only 2 posts so far) that I recently stumbled upon after he commented here. Ace is off to a great start with his blog and I encourage you to check him out and support him as he gets started.

Questions for my nominees to answer on their blog.

1. How long have you been investing?

2. What is your favorite movie?

3. What is your favorite personal finance related book?

4. What is your favorite quote?

5. What is your favorite stock?

 

Thanks again for nominating me Dear Dividend!

Blog Update: July 2014

Good afternoon! I hope all of you had a good 4th of July and are enjoying your weekend. 🙂

I haven’t been posting too much on here lately so I just wanted to give a quick update on what was going on. Due to my reaching 3 years in the military I get to move out of the dorms/barracks this month. So I’ve been pretty busy the last few weeks filling out rental apps and looking at places. I finally found one this week that was both fairly close to work and will fit my budget (gotta be able to continue with dividend investing) and I should be moving in by next weekend.

Now that that is out of the way, hopefully I should be able to get back to a more regular blogging schedule, including posting weekly roundups like I used to. I’ll be putting together my June update posts later today and posting them throughout this week.

If you have a few minutes, check out the latest Saturday Weekend Review over at Canadian Budget Binder where Mr. CBB was kind enough to include me in his Blogger Making a Difference series.

Also for all you twitter folks, be sure to follow me @startingfrzero.