Dividend Kings – 10 More Shares
Here we go, the most red we have seen in the market in awhile. Some people are calling for a massive crash, others say its almost over, a bunch are complaining about their losses and some are going to extremes bulking up on rice and essentials. Who knows what will happen. It’s pretty safe to say the market will still be around in 20 years though and these dips will continue to happen.
Honestly it is a little bit of a shock to read people complaining about their losses though. This has been a 5-10% pullback and could be a lot worse. I have really gotten my mindset engaged on the long term aspect of investing and I highly suggest you do as well. Personally our portfolio is down about 6k this week. (and we are pretty utility heavy) But stocks that went up in value so much and I couldn’t drip, have fell back down to drip levels. =)
Being a dividend investor is quite a bit different than a growth stock investor. Lower prices equal a higher starting yield and stocks can drip for cheaper. 2 huge bonuses and something to consider moving forward. Some dividend kings have grown their dividend for over 60 years straight. Remember sars? the wars? The 2009 financial crisis? Yup they continued raising their dividend when everyone thought it was the end of the world.
That’s my plan moving forward in these red days.. Stick with the dividend kings and aristocrats or possibly disney. haha
Previously I had a small position in 3m and it was one of my lowest holdings. The company has steadily been on a downward spiral with all these China issues. Next quarter may also be a big hit to earnings because of this virus but things may also start turning around. Supposedly those 3m masks are sold out everywhere! They also are laying off 1,500 people and restructuring the company into 4 divisions. There are some risks here for sure, but the stock is cheap.
3m currently projects earnings to be between 9.30 – 9.75 per share in 2020. Using the lower end of guidance of $9.30 and a $147.58 share price, the forward p/e ratio is 15.86. Quite a bit lower than the broader market.
At the moment mmm has a payout ratio of 61.5% of free cash flow. They recently raised their dividend by 2%. A really weak raise for sure, but its to be expected as they navigate this restructuring and aim to lower that payout ratio. (This raise marks 62 years of dividend raises, incredible stuff) Looking back though, they have had a pretty solid dividend growth rate boosting that dividend an average of 11% annually over the last 10 years.
All of this helped make my decision easier and deciding to add another 10 shares to the portfolio. I bought them yesterday at $147.58 per share. Will the stock keep dropping who knows? But I’m pretty sure that dividend is safe and will continue to grow moving forward.
This purchase adds $58.80 to our forward income and offers a solid 3.98% starting yield
One of our goals for 2020 is to continue funding our etf holding. We decided to start a position in xaw etf because of its range of stocks that are all ex Canada. We already have a lot of Canadian stocks in our tfsa’s and resp. Our goal was to contribute 250 a month but I bumped that up to be able to purchase 10 shares.
So we bought 10 shares at about 27.50 per share adding a whopping 5.88 to our forward income.
Note we use questrade to buy some stocks or etfs. Etf trades are basically free, costing a couple cents and share purchases are some of the lowest in Canada. If your interested in using our affiliate feel free to click here. There would be no additional cost to you, but you could get 50 bucks in free trades and we would get a little kick back as well.
Red days aren’t all that bad. It is unfortunate if you don’t have any cash sitting around though. In that case go out there and sell that body or do side jobs in your free time. We need to take advantage of these lower prices and cheaper dividend kings. Overall these purchases in our rrsp accounts added $64.68 to our forward passive income. Dividend Portfolio has been updated. Slowly but surely.
Let’s see how the next couple weeks go, could be red could be green. Just stick to your plan and focus on growing that income.
keep stacking those div’s, Cheers!
What are your thoughts? Are you buying or watching anything? Always appreciate the comments!
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.