Tag Archives: mcd

Monthly Investing Recaps: October 2014

At the start of each month I detail all the buy/sell activity here for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also continued investing in my Thrift Savings Plan (TSP) again this month. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here.

Loyal3 Account

Buys

.528 shares of McDonalds (MCD) @ $94.69 per share=$50 invested.

Quick Hits: Although I wasn’t able to buy MCD at its low mid-month, I added some more to this position at a decent valuation.

 

Roth IRA

No activity this month.

Quick Hits: Contribution limit maxed out until next year.

 

Taxable Brokerage

Buys

38 shares of Kinder Morgan (KMI) @ $38.92 per share=$1487.91 invested including commission.

Quick Hits: With KMI set up for projected 10% annual dividend growth over the next few years, I decided to double my position in the energy giant. Although I ended up raising my cost basis here, I still think KMI presents good value here when factoring in the upcoming consolidation of Kinder Morgan Partners (KMP) and Kinder Morgan Management (KMR) under KMI.

 

Full Disclosure: I am long all stocks mentioned. This post is not intended to be a buy or sell recommendation for any stock mentioned and is intended for educational/entertainment purposes only.

How was your October for investing? What do you think of my stock picks this month? Share with a comment below and thank you for reading!

Monthly Investing Recaps: August 2014

At the start of each month I detail all the buy/sell activity here for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also continued investing in my Thrift Savings Plan (TSP) again this month. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here.

Loyal3 Account

Buys

1.0686 shares of McDonalds (MCD) @ $93.58 per share.

.5314 shares of McDonalds (MCD) @ $94.10 per share.

1.0668 shares of McDonalds (MCD) @ $93.73 per share.

2.5164 shares of Coca-Cola (KO) @ $39.74 per share.

.8351 shares of Target (TGT) @ $59.87 per share.

1.3354 shares of Wal-Mart (WMT) @ $74.88 per share.

1.3204 shares of Wal-Mart (WMT) @ $75.74 per share.

Quick Hits: With too much time spent on school work this past month, I only made some small purchases through this account throughout the month. I plan on continuing to dollar cost average into KO anytime the stock dips below $40. With WMT, MCD and TGT all presenting good value at different times throughout the month I also continued dollar cost averaging into those stocks.

 

Roth IRA

Sells

.539 shares of RDSA @ 80.54 per share=$43.41. Realized gain of $4.71.

Quick Hits: I currently hold both my taxable brokerage and Roth IRA through my bank’s brokerage service. They recently  converted their brokerage service to a separate company and any holdings that were less than 1 share were automatically sold. Since dividends from Royal Dutch Shell’s class B shares (RDSB) can only be reinvested into class A shares (RDSA), this is how I ended up with a a fractional amount.

 

Taxable Brokerage

No activity this month.

 

Full Disclosure: I am long MCD, KO, TGT, WMT and RDSB. This post is not intended to be a buy or sell recommendation for any stock mentioned and is intended for educational/entertainment purposes only.

How was your August for investing? What do you think of my stock picks this month? Share with a comment below and thank you for reading!

July 2014 Balance Sheet

Today I’ll be sharing my personal balance sheet, listing all of my assets and liabilities to figure out what my current net worth is. Tracking your net worth is a good exercise in my opinion since it provides you a quick snapshot of your financial life.

Overall July was an all right month, considering the high level of expenses that I had. Used up a lot of my cash reserves with apartment related expenses plus added to my position in Philip Morris (PM) toward the end of the month. Note: the +/- after each category total represents the change only from the prior month.

Assets

Emergency Fund: $4501.76 (+.38). Yay for interest! ;)

Cash Savings: $3903.13 (-976.40). Combining this amount with the increase in credit card debt accounted for all of my initial apartment costs-security deposit, first month’s rent, renter’s insurance, furniture, etc.

Roth IRA: $12867.82 (-301.82). Just following the ups and downs of the market for now as I maxed out the account with my purchase of Deere (DE) in June.

Brokerage: $12024.55 (+1172.71). Added to my position in Phillip Morris (PM).

Loyal3: $2414.25 (-65.43). No activity this month except for a small dividend check from Coca-Cola. Investing some cash here is one of my goals for August with both Coca-Cola and McDonald’s recently dipping into my price range.

Thrift Savings Plan: $1347.55 (+42.17). I started contributing a small portion of my paycheck to the TSP in March, splitting my contributions between a S&P 500 and a small-cap stock index fund. This is the one portfolio where I’m investing primarily for total return as these funds do not pay dividends. However, they do have some of the lowest expense ratios you can fund in a retirement plan.

Auto Worth: $4985.00 (-313.00). The value of my ‘ole Chevy sedan continues to slowly decline as to be expected. The only reason I include it here is that is is the one non-financial “asset” that if I ever needed to sell, could probably get close to its market value. Also a nice reminder each month to not think of cars as an investment.

Assets Total: $42,044.06 (-441.39).

Liabilities

Credit Cards: $987.61 (+894.48). As I never carry a balance on my cards and the billing cycles ends in the middle of each month, this is simply my current balance at the end of the month. Like a lot of personal finance bloggers, I’m only in it for the rewards! ;)

Net Worth: $41,056.45 (-1335.87). First month over month loss since I started tracking this back in January which was to be expected considering all of the expenses I had planned for July. Depending on the markets, I plan on getting back to positive increases here in August.

 

Disclosure: I am long DE, PM, MCD, and KO.

How was your July for finances? Do you track your net worth and if so, are there any other items you track? Share below with a comment and thanks for reading!

 

Monthly Dividend Income: June 2014

My favorite post to write each month. 🙂 This is when I get to share all my dividend income for the previous month. These dividends are what I’ll eventually use to live off of when I become financially independent.

I share these figures along with monthly income/expenses to not only track my progress towards financial independence but also to hopefully show others that it is possible to get started with dividend growth investing with a low income. The hardest part is weathering the first few years of small dividend payments and allow the compounding snowball to get rolling.

Here is June’s dividend income from my 3 stock investment accounts: Roth IRA, Loyal3, and Taxable Brokerage. I automatically reinvest all dividends in my Roth and selectively reinvest dividends, combining them with fresh capital every month or two, in my other accounts.

Roth IRA

Aflac (AFL): $8.14-reinvested into .132 shares @ $61.33 per share.

Visa (V): $2.80-reinvested into .013 shares @ $211.80 per share.

Chevron (CVX): $10.97-reinvested into .087 shares @ $124.77 per share.

Realty Income (O): $2.84-reinvested into .065 shares @ $43.67 per share.

Royal Dutch Shell Class B and Class A (RDSB and RDSA): $13.51-reinvested into .171 shares of RDSA @ $78.90 per share.

Loyal3

Target (TGT): $5.55

McDonald’s (MCD): $2.51

Taxable Brokerage

Wal-Mart (WMT): $0.96

Chevron (CVX): $5.35

IBM (IBM): $9.90

Target (TGT): $0.86

Realty Income (O): $19.89

BP (BP): $9.95

June Total: $93.23. Getting so close to that $100 mark! Maybe in September when all these companies pay out again. 😉 At the half-way mark of the year I’ve now earned $387.93 for the year.

 

Full Disclosure: I am long WMT, CVX, IBM, TGT, O, BP, AFL, V, RDSB, RDSA, and MCD. This post is not intended to be a buy or sell recommendation for any stock mentioned and is for entertainment/educational uses only.

How was your June for dividend income (or portfolio gains for any growth investors)? Share below with a comment and thanks for reading!

Updating My Potential Buy List: April 2014

Good morning fellow dividend growth investors and personal finance enthusiasts!

Today I’m reviewing some of the stocks on my potential buy list. I recently got my tax refund back so it’s time to go shopping for stocks. 🙂

I’ve broken the list down into two parts, stocks that I already own and would like to add more to, and stocks that would be new additions to my portfolio.

First off, the stocks I currently own and would consider adding to.

Coca-Cola (KO)-As long as KO trades at less than $40 a share, I plan on continuing to dollar cost average using my commission free Loyal3 account.

General Electric (GE)-With a P/E of 17.3 I think GE is trading at fair value and I’d like to add more to position in the stock. With an increased focus on returning to its industrial roots and reducing the size and spinning off portions of its financial arm the company looks to be returning to its former dividend growth blue chip status.

McDonald’s (MCD)-Although shares have popped a little since my last purchase, I’d like to add more on a pullback as I have just a small position. While MCD doesn’t have as much of a margin of safety in the share price as I’d normally like, with a very long-term investing horizon, I feel comfortable paying up a little for a quality stock as I detailed here.

Philip Morris (PM)-Even though the price has rebounded a bit since my last Buy List post, the international tobacco giant continues to trade well below its 52 week highs and currently yields 4.5% at today’s levels.

Target (TGT)-This stock continues to be punished after a weak roll-out in Canada and the data breach during the last holiday shopping season. Like KO, I plan on continuing to dollar cost average into this stock using Loyal3.

Now for stocks that would be new additions to  my portfolio.

Aflac (AFL)-The insurance dividend champion continues to trade at an attractive valuation with a current P/E of just 9.1. With its strong dividend growth rates AFL should make a great long-term holding and also give me some exposure to the financial sector since I recently sold my shares in Powershares Financial Preferred ETF (PGF).

General Mills (GIS)-Man, I so wish I had just bought this when I was starting out and it was trading in the low 40’s. I’m still waiting for a slight pull back before initiating a position as the diversified food company continues to trade at a premium to its historic P/E but with a long-term investing horizon I may consider adding it if it dips below $50.

Kinder Morgan Management (KMR)-I recently purchased KMI in my Roth IRA last month. Rather than adding more to this position I was thinking of adding Kinder Morgan Management. KMR provides a similar yield to Kinder Morgan Partners (KMP), the master limited partnership, and issues stock dividends so you don’t have to worry about dealing with a K-1 come tax time. Once you decide to sell your position, you are given a 1099 just like with regular dividend growth stocks. Since it is structured as an LLC C-Corp it can be held in a retirement account so I’m thinking of adding this to my Roth to shield those future capital gains.

Visa (V)-Wait, what? Isn’t Visa a growth stock, I thought you were a dividend growth investor? 😉 With its low yield (currently less than 1%), it’s easy to look at V as only a growth stock and forget that it now has a 7 year history of raising dividends and a very impressive dividend growth rate as well. It currently sports dividend growth rates of: 40.4% for 1 year, 38.3% for 3 year, and 45.9% for its 5 year average. With shares pulling back below $200 a share recently, off from a 52 week high of $235, Visa looks attractively valued at today’s levels for starting a long-term position.

Full Disclosure: I am long KO, GE, KMI, MCD, PM, TGT, and may initiate long positions in AFL, GIS, KMR, and V over the coming weeks. For a full list of all my holding please visit my portfolio page. As always don’t take anything I post here as a buy or sell recommendation and I highly encourage you to do your own research before investing.

What do you think of these stocks? Do you hold any of these in your portfolio or looking to add them? Let me know in the comments! 🙂

Monthly Investing Recaps: March 2014

At the start of each month I plan on detailing all my buy/sell activity for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also started investing in my Thrift Savings Plan (TSP) again this month to help put more of my money in tax advantaged accounts. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. 😉 Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here but will now be including a total on my portfolio page.

I also received a surprise check from my college late in March with a tuition refund of $721.50 which was from me overpaying my tuition bill for the last 3 semesters before some of my scholarships were deposited. I knew I was getting a refund at some point but had completely forgotten about it. 🙂 I put this money to work immediately, combining it with most of the cash in my Roth to initiate a new position in Kinder Morgan Inc (KMI) which was one of the stocks on my buy list that I highlighted here.

Loyal3 Account

Buys: 03 Mar: 7.6296 shares of Coca-Cola (KO) @ $38.01 per share.

19 Mar: 2.0854 shares of Target (TGT) @ $59.94 per share.

19 Mar: 3.0985 shares of McDonald’s (MCD) @ $96.82 per share.

19 Mar: 1.297 shares of Coca-Cola (KO) @ $38.55 per share.

Quick Hits: Similar to last month as I continue dollar cost averaging into both Coke and Target. Looking to diversify a bit more this month I added McDonald’s, a dividend champion with 38 years of dividend growth. With a P/E of 17, I consider the stock to be fairly valued and will likely continue to add to my position in the coming months.

Roth IRA

Buys: 31 Mar: 33 shares of Kinder Morgan Inc (KMI) @ 32.13 per share.

Quick Hits: I combined some fresh capital this month with the cash I had just sitting idle in my Roth and finally pulled the trigger on KMI with the energy giant trading at an attractive valuation relative to its 52 week trading range. At current prices the stock boosts a dividend yield of 5.10% and is expected to be able to grow that dividend by 8% annually. Like all of my Roth holdings, the dividends received will be automatically reinvested. I plan on doing a full blog post on KMI here soon.

Taxable Brokerage: No buy or sell activity this month.

Overall a pretty solid month of investing. Combined all of my purchases this month added $78.62 to my projected annual dividend income. With the purchase of KMI, this puts me slightly overweight in the energy sector and will most likely be my last energy pick-up for a while. (Unless of course, another bargain presents itself next month. 😉 ) With a relatively small portfolio, I’m comfortable being overweight in certain sectors or stocks (like Realty Income) at the moment knowing future additions will help balance it out in the coming years. Once I get closer to financial independence, portfolio allocation is going to become more important. Until then, I plan on continuing to add whatever stocks are trading at fair value (or below) and meet my guidelines.

 

Full Disclosure: I am long KO, MCD, TGT, and KMI. This post is not intended to be a buy or sell recommendation on any stock mentioned and is designed for educational/entertainment purposes only. Only you are responsible for your investing and I always encourage you to conduct your own research prior to investing. Please see my disclaimer page.

How was your March for investing? What do you think of the additions to my portfolio? Share with a comment below and thank you for reading.

Updating my Potential Buy List

Time to share my current Buy List of dividend growth stocks. These are stocks I have done research on and are on my short list of potential stocks to buy soon. I like to keep such a list to help me narrow down my purchases each month and keep me on track. The stocks listed are separated into two categories, Stocks I Currently Own, and New Stocks.

First, the stocks I currently own that I consider would like to purchase more of at current market prices.

Chevron (CVX)-My original cost basis for the oil major was around $120 a share and it is currently trading below that at $117. The company has paid out growing dividends to shareholders for 26 straight years. The current P/E is 10.61 which compares favorably with its 5 year average of 10.3.

Coca-Cola (KO)-The king of dividend growth stocks. 😉 With a current P/E of 20 I consider KO to be fairly valued and have been accumulating shares using my Loyal3 account recently and plan on continuing to do so as long as the stock remains around $40 a share.

General Electric (GE)-General Electric has been doing all of the right things lately as they continue to recover from the recession and the dividend cut that ensued. The firm has gradually been reducing the size of its financial arm and going back to its industrial conglomerate roots. With over a $200 billion dollar backlog of orders, the company is on track to get back its status as a blue chip dividend payer.

McDonald’s (MCD)-Another stock currently trading at what I consider fair value. While MCD doesn’t have as much of a margin of safety in the share price as I’d normally like, with a very long-term investing horizon, I feel comfortable paying up a little for a quality stock as I detailed here.

Philip Morris (PM)-With 2014 slated to be an investment year for the company, the stock has taken a bit of a hit recently, currently trading 16% below its 52 week high. I originally initiated a position at $89 so I would be thrilled to be able to pick up some more at almost $10 a share less.

Target (TGT)-Between the data breach and not so great start to its expansion in Canada, TGT has taken quite a bit of a hit recently and is now trading 19% below its 52 week high. Although I expect the dividend growth to slow over the short-term due to its recent troubles, I expect TGT to recover and continue to be an excellent long-term holding. Like KO, I plan on continuing to dollar cost average into the stock each month using Loyal3.

Now for stocks that would be new positions for my portfolio.

Aflac (AFL)-While AFL doesn’t have a high starting yield at 2.4% the stock has a great dividend growth rate history with averages of 8.1% and 16.8% for the past 5 and 10 years respectively. The biggest thing the dividend champion has going for it right now is a great valuation with a P/E of just 9.3 which is a discount to both its historical P/E and that of its sector.

General Mills (GIS)-Similar to MCD, General Mills isn’t trading with very much of a margin of safety with a P/E of 18.7, slightly above its 5 year average of 16. I’d really like to add this stock to my portfolio this year but will be waiting for a pullback before I make a purchase.

Kinder Morgan Inc. (KMI)-Kinder Morgan is a company I’ve been reading a lot about recently and wouldn’t mind adding it here at current prices where it currently trading at $31, down from its 52 week high of $41.49. Nice combination of a high starting yield, high dividend growth rate, and an attractive entry point.

 

Full Disclosure: I am long CVX, KO, GE, MCD, PM, TGT. Check out all of my holdings here. This post is meant for educational/entertainment purposes only and should not be considered as a buy or sell recommendation for any stock mentioned.

What do you think of these stocks? Do you hold any of these in your portfolio or looking to add them? Let me know in the comments! 🙂

McDonald’s Stock Research

Lately with all the saving I’ve been doing to get ready to move into my own apartment off base, I haven’t had a lot of money left over each month to invest with. Therefore I’ve been doing all my stock investing in my commission-free Loyal3 account. The last few months I’ve mostly just been buying shares of Coca-Cola (KO) as the stock has continued to trade at a fair valuation.

Although Loyal3 is great with their no commission or fee set-up, it is limited by the number of stocks you can buy. The whole list can be found here. Browsing through them the other day I separated out all the ones that (A) paid a dividend and (B) has increased that dividend for at least 5 years. This is what I came up with: Coca-Cola, Dr. Pepper Snapple (DPS), Hasbro (HAS), Kellogg (K), Mattel (MAT), McDonald’s (MCD), Microsoft (MSFT), Nike (NKE), Pepisco (PEP), Target (TGT), VF Corp (VFC), and Wal-Mart (WMT). Not a bad list to choose from by any means.

I plan to continue to dollar cost average into KO and add more to my TGT position as long they remain fairly valued and undervalued in the case of TGT also but wanted to add a new position to continue diversifying my portfolio. Of the ones mentioned above, I decided to go with the home of the golden arches: McDonald’s, to add this month.

As I’m sure most of you know, McDonald’s is a global fast food franchise with locations in over 100 countries. It was founded in 1964 and currently has a market cap of $96 Billion. The dividend champion has been increasing their dividend for 38 years now. While the latest dividend increase of 8.7% disappointed some dividend growth investors after seeing double digit increases over the last few years since 2008, the stock still has a 5 year dividend growth rate of 13.9%.

Taking a look at the rest of the company’s fundamentals, McDonald’s has a current P/E ratio of 17.6 which compares favorably with their 5 year average P/E of 17. The forward P/E is fairly low at 14.9 which is below the S&P 500’s average forward P/E of 16. Going back ten years, MCD has been able to grow earnings per share every year except in 2007.

This trend is expected to continue in the future with estimated 8.4% earnings per share growth over the next five years, about the same as the past 5 years. This should allow the company to continue to raise the dividend in line with earnings growth and with a payout ratio of only 58.38%, allows the company to grow the dividend in excess of earnings if they choose to do so.

In conclusion, McDonald’s looks like a good long-term investment opportunity at its current valuation considering its dividend growth history, expected future earnings per share growth, and dividend growth rate. I will be starting to dollar cost average into this stock starting this month.

Full Disclosure: I am long KO, TGT, and will be initiating a position in MCD soon. Please see my disclaimer page.

What do you think of McDonald’s as an investment right now? Does anyone else own it in their dividend growth portfolios? Thank you for reading.