As a value investor, one should always be on hunt to find the bargain and keep investing in the dividend paying bargains at regular interval, monthly or bi-weekly or however frequently enough cash becomes available to put back to work. When bargains shifts from one company to other, we as a value investor, should follow the value stocks and maintain these frequent purchases of these value stocks to create continuously growing stream of passive income through dividends. Continuous flow of dividend income stream that can grow over the time at faster pace than inflation rate is extremely vital.
In The Dividend Karma’s journey of creating constant flow of passive income via dividend investing, I try to keep looking around hunting for the value dividend stock and post it on this blog once the purchase is made to own a piece of business within any company.
Since no one can really predict the market moods and sentiments, the highs or the lows or even future directions, it is best to keep buying all along the way thru the ups and the downs without much interruptions. Although, I do believe in keeping little more cash than usual when one feels the market is little too high and its not easy to find the value stocks, which is what I believe we should do in current market condition. I also think regardless of above, not buying on regular basis can also hurt for two main reasons. Reason one is who knows what next year or two brings, it may be possible that correction may not occur for next several years so waiting for correction may not work very well specially when you are building a portfolio in accumulation phase of your life. Reason number two is if we wait for correction and if the bull run continues then correction has to be much harder just to get back to the same price you would have otherwise bought the stock anyway while waiting for correction and even if correction comes after a year or two or longer, then in a long run, it will reduce the amount of time your investment can actually compound and in process it may be possible that reduction in power of compounding years may hurt your portfolio value and dividend income more than rather buying in value stocks at regular intervals.
With above mindset, I’ve recently bought into a few companies, which in my opinion a good value at current levels with current market conditions. Below is the list of a few purchases I have recently made:
On 15th December, I bought 25 stocks of BP at an average price of $40.37. BP pays quarterly dividend of $0.60 (paid in the month of February, May, August and November). TDK’s annual dividend increase with this purchase will be about $60.0 at a dividend yield of about about 5.945%.
On 15th December, I bought 100 stocks of KMI at an average price of $18.04. KMI pays quarterly dividend of $0.125 (paid in the month of January, April, July and October). TDK’s annual dividend increase with this purchase will be about $50.0 at a dividend yield of about about 2.77%.
On 15th December, I bought 8 stocks of FAS at an average price of $68.06. FAS doesn’t pay any dividends. There are very few companies within TDK’s portfolio that don’t pay dividends. FAS is among those ones.
On 14th December, I bought 75 stocks of GE at an average price of $17.68. GE has recently cut its dividend down to quarterly payment of $0.12 (paid in the month of February, June, September and December). TDK’s annual dividend increase with this purchase will be about $36.0 at a dividend yield of about about 2.715%.
Total invested capital is $4,682.81. These purchases will increase the TDK’s annual dividend by $146.0. Dividend on this purchase yields about 3.12%.
What are your thoughts on this purchase ? What are the stocks you are buying or looking to add ?