6/09/2013

International Business Machines (IBM): Next Portfolio Stock Purchase

On last Friday I needed to make a choice between IBM and Teva Pharmaceuticals. I decided to pick the technology stock despite the fact the IBM has a higher valuation in terms of price to earnings and debt to equity ratio.

The current valuation of IBM is 14.23 and the forward P/E is at 11.25. Also the dividend yield is the lowest below all portfolio holdings. It’s at 1.84 percent. Why buying IBM?

Compared to other high quality dividend growth stocks, IBM is still cheap like most other technology companies with a higher capitalization. IBM is the biggest basic pick within the sector and every long-term dividend growth investor need some shares of the company. As of now, I had no shares of the company and needed to pull the trigger for the first position.

The second reason to take a stake of IBM is the low cyclic and higher degree of safeness. With a $200+ billion company, you have much more possibilities to grow and the self finance ratio is also much higher. IBM makes huge share buybacks while TEVA needs to increase its capital basis. As you might see below, the dividend potenital compared to earnings per share is for IBM unbelievable high.

Earnings and Dividends of IBM

What makes IBM?

International Business Machines Corporation provides information technology (IT) products and services worldwide. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. The Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and technology support services.

How many shares?


I purchased 8 shares at 206.35 which resulted in a total purchase amount of $1,650.80. IBM is the thirteenth biggest stake in my Dividend Yield Passive Income Portfolio (DYPI).

Dividend Yield Passive Income Portfolio (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)


The DYP-Portfolio was funded virtual on October 03, 2012 with 100k. Since then, I purchased each week one stake for around 1k to 2k. Now, I still have $48.491.06 and 35 portfolio holdings.

The full portfolio income is now estimated at $1,807 per year. The average portfolio yield on cost amounts to 3.47 percent and the current yield of the portfolio is 3.20 percent.


Here is the income perspective of the dividend portfolio:

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
15.88
3.86

28.90
50
$64.50
$1,688.50
LMT
Lockheed Martin C
12.05
4.26

92.72
20
$89.00
$2,147.20
INTC
Intel Corporation
12.32
3.59

21.27
50
$44.25
$1,229.50
MCD
McDonald's Corpor
17.93
3.11

87.33
15
$45.15
$1,474.20
WU
Western Union Com
9.89
2.74

11.95
100
$45.00
$1,665.00
PM
Philip Morris Int
17.69
3.65

85.42
20
$67.18
$1,841.80
JNJ
Johnson & Johnson
22.94
2.95

69.19
20
$49.80
$1,698.20
MO
Altria Group Inc
16.57
4.83

33.48
40
$69.20
$1,446.00
SYY
Sysco Corporation
19.41
3.29

31.65
40
$44.00
$1,350.40
DRI
Darden Restaurant
16.26
3.75

46.66
30
$60.00
$1,626.90
CA
CA Inc.
13.52
3.57

21.86
50
$50.00
$1,457.00
PG
Procter & Gamble
17.21
2.98

68.72
25
$57.20
$1,943.75
KRFT
Kraft Foods Group
19.97
3.68

44.41
40
$80.00
$2,174.80
MAT
Mattel Inc.
19.27
2.91

36.45
40
$51.60
$1,807.20
PEP
Pepsico Inc. Com
20.92
2.67

70.88
20
$43.60
$1,650.20
KMB
Kimberly-Clark Co
20.96
3.22

86.82
15
$46.50
$1,456.80
COP
ConocoPhillips Co
10.05
4.26

61.06
20
$52.80
$1,246.40
GIS
General Mills In
17.36
2.78

42.13
30
$39.60
$1,442.40
UL
Unilever PLC Comm
20.86
3.08

39.65
35
$44.91
$1,464.05
NSRGY
NESTLE SA REG SHR
18.77
3.26

68.69
30
$65.31
$2,023.80
GE
General Electric
17.32
3.08

23.39
65
$46.80
$1,550.90
ADP
Automatic Data Pr
23.11
2.44

61.65
25
$41.50
$1,722.75
K
Kellogg Company C
24.38
2.84

61.52
25
$44.00
$1,584.75
KO
Coca-Cola Company
21.34
2.56

38.83
40
$41.80
$1,656.40
RTN
Raytheon Company
11.57
3.11

57.04
20
$41.00
$1,348.20
RCI
Rogers Communicat
13.08
3.61

51.06
30
$48.69
$1,343.10
GPC
Genuine Parts Com
18.33
2.72

77.06
20
$41.28
$1,549.40
TSCDY
TESCO PLC SPONS A
216.15
4.37

17.98
70
$49.63
$1,138.90
APD
Air Products and
16.94
2.78

85.71
15
$39.45
$1,426.35
GSK
GlaxoSmithKline P
18.71
4.58

52.16
30
$70.38
$1,551.30
WMT
Wal-Mart Stores
14.9
2.3

79.25
20
$34.72
$1,526.60
BTI
British American
17.35
3.77

114.6
13
$53.82
$1,431.56
CHL
China Mobile Limi
10.08
4.3

55.32
25
$54.95
$1,271.75
MMM
3M Company Common
17.14
2.25

110.27
15
$36.75
$1,666.65
TUP
Tupperware Brands
23.68
2.08

80.98
15
$25.50
$1,243.05
IBM
International Bus
14.05
1.72

206.35
8
$28.00
$1,650.80
















$1,807.87
$56,496.56
















Average Yield
3.20%
















Yield On Cost
3.47%

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