2/24/2013

General Electic (GE) Is The Next Stock Buy For The Dividend Yield Passive Income Portfolio


After the recent buys of Unilever and Nestlé, I want to force the industrial sector in my Dividend Yield Passive Income Portfolio (DYPI). One big player within the sector is General Electric (GE).

General Electric Company operates as a technology and financial services company worldwide. The company's Energy Infrastructure segment offers wind turbines; gas and steam turbines and generators; integrated gasification combined cycle systems; aircraft engine derivatives; nuclear reactors, fuel, and support services; oil and gas extraction and mining motors and control systems; aftermarket services; water treatment solutions; power conversion infrastructure technology and services; and integrated electrical equipment and systems.

Dividends and Earnings Of General Electric (GE)

GE is a diversified machinery stock with $245 billion market capitalization and sales of $147 billion. The current P/E ratio amounts to 16.83 and the dividend yield is at 3.25 percent. Earnings are expected to grow for the mid-term by a double-digit rate. The forward P/E is 12.71.

I bought 65 shares for a price of 23.39. The total purchase amount was $1,525.35 and will give me around $50 per year in additional dividends. The total portfolio income is now forecasted at $1,131.18 per year.

The average portfolio yield is 3.56 percent and the yield on cost (yield when I bought the stocks) amounts to 3.75 percent). The yield ratio declined because of the small capital gain of 4.87 percent.

Dividend Yield Portfolio Overview (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

The virtual portfolio has now 21 stock holdings. Combined they have a current market value of $31,428.4. I purchased all stocks for a total cost of $29,968.25. Stocks of the DYPI-Portfolio are up 4.87 since the date of funding – October 04, 2012.

Only 30 percent of the 100k funded asset vehicle is currently invested. Roughly 70 percent or $70,177.80 in cash is still available for further stock acquisitions. With this money, I plan to increase the total number of stocks to 50-70 by the end of this year. With this in mind, the whole dividend income should grow to $3,000 to $4,000 per year. Over the next decade, this amount should double.

The total portfolio performance is 1.61 percent of which 1.56 percent was generated this year.

Dividend Yield Passive Income Portfolio Performance (Click to enlarge)

GE is a high debt loaded company. The total long-term loans amounted to $414 billion as of Q4/2012 and cash of $125.7 billion was accounted. The company has also a strong cash flow of $33 billion and an EBITDA in a range of $18 billion. So the EV/EBITDA ratio is around 17 - that's a damn high value. But capital business works different. In times of rising financial costs or financial crises, the business model could be hurt.

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
11.95
4.31

28.90
50
$64.25
$1,496.00
LMT
Lockheed Martin C
10.47
4.74

92.72
20
$83.00
$1,762.40
INTC
Intel Corporation
9.51
4.37

21.27
50
$44.25
$1,021.00
MCD
McDonald's Corpor
17.57
3.05

87.33
15
$43.05
$1,428.75
WU
Western Union Com
8.22
3.06

11.95
100
$42.50
$1,402.00
PM
Philip Morris Int
18.01
3.52

85.42
20
$65.58
$1,868.40
JNJ
Johnson & Johnson
19.76
3.2

69.19
20
$48.80
$1,525.00
MO
Altria Group Inc
17.1
4.83

33.48
40
$68.00
$1,412.80
SYY
Sysco Corporation
17.95
3.34

31.65
40
$43.60
$1,310.00
DRI
Darden Restaurant
12.78
4.31

46.66
30
$57.90
$1,386.90
CA
CA Inc.
12.41
4.1

21.86
50
$50.00
$1,228.00
PG
Procter & Gamble
17.49
2.92

68.72
25
$56.20
$1,924.75
KRFT
Kraft Foods Group
17.04
4.21

44.41
40
$80.00
$1,898.40
MAT
Mattel Inc.
18.2
3.19

36.45
40
$51.60
$1,620.80
PEP
Pepsico Inc. Com
19.22
2.82

70.88
20
$42.56
$1,511.40
KMB
Kimberly-Clark Co
20.79
3.22

86.82
15
$44.40
$1,417.50
COP
ConocoPhillips Co
8.64
4.54

61.06
20
$52.80
$1,164.00
GIS
General Mills In
16.73
2.86

42.13
30
$38.85
$1,370.10
UL
Unilever PLC Comm
20.02
3.14

39.65
35
$43.89
$1,408.05
NSRGY
NESTLE SA REG SHR
19.34
3.06

68.69
30
$63.15
$2,079.33
GE
General Electric
18
3.1

23.39
65
$46.80
$1,520.35
















$1,131.18
$31,755.93
















Average Yield
3.56%
















Yield On Cost
3.75%

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