Tuesday, September 1, 2015

Weekly Purchase 2




The market went down again today, but I didn’t pay much attention. With my weekly purchase plan, I initiated the transaction on Monday. I had already planned out my weekly list in advance - so I didn't check the market until I received the email showing the trade.

The advantage of such a plan is that it takes me away from the market. The drawback is that CapitalOne seems to pick sub-optimal prices. Luckily, I am not too worried for not picking the best price for the day.

With my capital still low this week, I only bought a few shares of UTX

My decision is based on my new September Screen as well as current holding of UTX in my portfolio which is relatively low compared with my other holdings. I want to build up the other positions and diversify as well.



Date
Action
Security
Price
Quantity
Amount
9/1/2015
Buy
UTX
$90.46
11.0115
$996.05

My criteria table is shown below which didn’t change from last time I bought UTX (apart from the yield due to the price change.)

UTX 9/2015
Area
Criteria
CheckList
Comment
Quality Company
Dividend Growth
>5 years
Yes
22 Years
ROE/Op Margin
Stable
Yes
Stable
Long term Avg Growth
Stable
Yes
Stable
FCF over Dividends
Yes
Yes
FCF covers Dividends
M* Moat
Wide Moat
Yes
Wide
M* & S&P
Credit Rating
> BBB+
Yes
A
Cash to Debt & Interest Coverage, Debt to Equity
Cash Debt >1 or Interest Coverage > 5
Yes
Cash to Debt 0.26
Interest Coverage 8.88
Debt to Equity 69.98
M* & S&P Stars
> 3 Stars for both
Yes
M* 4 Stars
S&P CapIQ 4 Stars A+ rated
Payout Ratio
<60%
Yes
35.29%
Dividend Growth
& Yield
Dividend Yield
>3%
Yes
2.69%
Dividend Growth
>5%
Yes
8.90%
Chowder
>12%
No
11.59%
Valuation
Yield/Avg Yield
>1.1
Yes
1.20
Dividend Yield Theory Mid Point
Below Mid Point
Yes
Mid Point 100.56
Low Point 80
P/E
Below Mid Point
Yes
Median 15.33 Current 12.86
DRRM
~10%
Yes
Assuming 6% growth; projected return=11.43%
M* Estimate
<M* est
Yes
M* 120
S&P Estimate
< S&P cap IQ est
Yes
S&P Cap IQ 126

The purchase increased my estimated yearly dividend income by $28.19.

After typing this blog page, I see some excellent bargains out there! Let's see if I can dig up some extra cash to invest outside of my weekly investments. However, I need to space out my purchases - I don't know if the market will rebound or go down further.

What do you think of UTX?

D4s

6 comments:

  1. Great purchase, Div4Son. UTX is another great company that has always stayed on my watchlist but never pulled the trigger - looks very attractive at current levels indeed.

    Congrats on another purchase and adding to your div income.
    R2R

    ReplyDelete
    Replies
    1. R2R, thanks. There are a lot if bargains. Almost spoilt with choice. My decision was based in my current UTX holding size in my portfolio. If we remain low for a while, I can build up my other positions.
      Thanks for visiting.
      D4s

      Delete
  2. Good buy D4s. This is on my watch list but I am focusing on recession proofing my portfolio at the moment. Hopefully we'll have a correction in the future and more opportunities to pick up quality companies. =)

    ReplyDelete
    Replies
    1. Broke Dividend Investor,
      I have a few defensive stocks to purchase myself. I will try to space out my buys - if I catch some goodies then great - otherwise, it is what it is.
      Thanks for visiting.
      D4s

      Delete
  3. Like the UTX buy. It's been pretty beaten up lately and is an industrial name that has been on my watch list for a long time though I never pulled trigger on it. Seems like I'm no the only one judging by the comment above. Nice to see industrial and some consumer names selling at better prices these days. Thanks for sharing and great quality buy.

    ReplyDelete
    Replies
    1. Divhut, thanks for your comments. Industrials, consumer and financials are all beaten up. Oh yeah, also the oil and energy. If the market stays this way, it's a good time to bulk up the smaller positions - which is what I am trying to do. I wish I can buy more PG, KO and XOM but they will need to wait. I bought some KMB today (small) and initiated my weekly trade for next Tuesday. Still investing... But capital is still low.
      Anyway, I'll try to write a post on my trades soon.
      D4s

      Delete