3/24/2013

Defense Stock Raytheon Is The New Pick For The Dividend Yield Passive Income Portfolio


I purchased 20 Raytheon (RTN) shares last Friday for my Dividend Yield Passive Income Portfolio, a 100k virtual funded project on October 03, 2012. The total purchase price was $1,145.80 at a price of $54.04. Here is what the company manufactures:

Raytheon provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as a range of mission support services in the United States and internationally. The company's Integrated Defense Systems segment provides integrated air and missile defense, radar solutions, and naval combat and ship electronic systems.

Raytheon is the fourth largest public traded US military stock behind Lockheed Martin, Boeing and General Dynamics. LMT is also part of my DYPI-Portfolio with a nearly flat performance since I bought them but LMT pays a great yield of around 5 percent.

The military supply industry is no hot investment field for investors. Everybody fears budget cuts by the government and they will come. It’s announced that the industry sees the largest budget decreases since the end of the Vietnam War.

Fundamentals of RTN look good and a slow growth of 5.7 percent in earnings is still expected for the next five years. Last week, RTN announced a dividend hike of 10 percent. The current yield is now at 3.86 percent. The company is a Dividend Challenger and managed to raise dividends over nine consecutive years.

Earnings and Dividends of Raytheon

The new position will give me additional $44 in dividends over the year. The total dividend income is now estimated at $1,300. By the end of this year, the income should rise to a total amount of $3,000 to $4,000. With still $64,475.90 in cash on banks should this possible. All I need to do is to buy a stock each week with an average yield above the 3 percent mark.

Dividend Yield Passive Income Portfolio (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

There are still some great shares out there with an acceptable dividend yield but my targets getting rare because of the stronger growing stock market. Investors push prices and yields come down as a result.

Yet, it was still possible to exceed the magic 3 percent mark. My current yield on cost is at 3.64 percent but the portfolio yield is constantly sinking because of the capital gains the portfolio produce. Since the date of funding,  stockholdings gained 7.73 percent or $2,764.45 in total.

The development of the stocks is in-line with the performance of the broad market but due to the high cash amount, the total performance is only at 3.0 percent.

Portfolio Performance (Click to enlarge)


Here is the income perspective of the DYPI-Portfolio:

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
12.89
4

28.90
50
$64.25
$1,612.00
LMT
Lockheed Martin C
10.97
4.69

92.72
20
$86.00
$1,845.20
INTC
Intel Corporation
9.88
4.21

21.27
50
$44.25
$1,066.50
MCD
McDonald's Corpor
18.38
2.98

87.33
15
$44.10
$1,489.05
WU
Western Union Com
8.57
3.11

11.95
100
$45.00
$1,464.00
PM
Philip Morris Int
17.61
3.6

85.42
20
$65.58
$1,832.40
JNJ
Johnson & Johnson
20.47
3.09

69.19
20
$48.80
$1,594.80
MO
Altria Group Inc
16.44
5.11

33.48
40
$69.20
$1,356.40
SYY
Sysco Corporation
18.92
3.16

31.65
40
$43.60
$1,396.00
DRI
Darden Restaurant
13.99
3.94

46.66
30
$57.90
$1,488.60
CA
CA Inc.
12.76
3.99

21.86
50
$50.00
$1,266.00
PG
Procter & Gamble
17.52
2.91

68.72
25
$56.20
$1,931.75
KRFT
Kraft Foods Group
18.79
3.91

44.41
40
$80.00
$2,047.60
MAT
Mattel Inc.
19.17
3.03

36.45
40
$51.60
$1,729.60
PEP
Pepsico Inc. Com
19.41
2.82

70.88
20
$43.00
$1,572.80
KMB
Kimberly-Clark Co
21.48
3.19

86.82
15
$45.45
$1,434.90
COP
ConocoPhillips Co
9.07
4.33

61.06
20
$52.80
$1,218.20
GIS
General Mills In
17.53
2.71

42.13
30
$38.85
$1,444.50
UL
Unilever PLC Comm
20.77
3.03

39.65
35
$43.89
$1,471.05
NSRGY
NESTLE SA REG SHR
20.26
2.92

68.69
30
$63.15
$2,165.40
GE
General Electric
18.03
3.09

23.39
65
$46.80
$1,519.05
ADP
Automatic Data Pr
22.23
2.6

61.65
25
$41.50
$1,602.00
K
Kellogg Company C
23.48
2.79

61.52
25
$43.75
$1,584.75
KO
Coca-Cola Company
20.34
2.61

38.83
40
$41.80
$1,601.60
RTN
Raytheon Company
10.26
3.52

57.04
20
$40.00
$1,140.80
















$1,307.47
$38,874.95
















Average Yield
3.36%
















Yield On Cost
3.64%

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