Bookmark and Share

Target: Next Stock Purchase For The Dividend Yield Passive Income Portfolio

I bought 20 shares of the discount store operator Target. The company yields at 2.41 percent and is priced with a P/E of 16.77. Due to growth, the forward P/E should sink to 13.10. Over the next five years, earnings are expected to grow by 11.06 percent yearly. That’s a good value and the price is fair in my view. The stock is down 1.5 percent last week.

The full stake cost me $1,434.20 in total and would bring me around $35 Bucks in dividend income, based on $1.72 estimated yearly dividends. Target operates in three segments: U.S. Retail, U.S. Credit Card and Canadian. As a component of the U.S. Retail Segment, its online presence is designed to enable guests to purchase products either online or by locating them in one of its stores with the aid of online research and location tools.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Passive Income Portfolio I (Click to enlarge)

Dividend Yield Passive Income Portfolio II (Click to enlarge)


--------------------------------------
For readers who a new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.
--------------------------------------

Target is the second biggest capital market listed company from the discount and variety store industry, behind Costco Wholesale. COST as a USD 5 Billion bigger market capitalization but sells more items for around USD 30 billion per year. Costco has a smaller margin; it offers larger discounts and has a 12.5 percent gross margin. Target’s gross margin is at 30.80.

Target is a real Dividend Champion. The company raised its dividend payments over a period of 46 consecutive years. Its dividend growth accelerated from 18.6 percent over the recent 10 years to 24.7 percent for the past 3 Years. The latest dividend hike was at 20% from 30 Cents to 36 Cents on August 13, 2012.

Earnings and Dividends of Target

As of the time of writing, the stockholdings from the portfolio gained 9.13% since the date of funding. It’s a small underperformance compared to the broad market and a result of the slow purchasing process. I buy only one company each week for around 1k to 2k. In markets that are going strongly up, the strategy will produce an underperformance. My aim is not to show how make fast profits by trading stocks. I like to create a sustainable long-term dividend growth portfolio. I plan to boost the current income to 3k or more by the end of the year. Over the next ten years, this value should double to 6k or more.

Portfolio Performance (Click to enlarge)

With still $40,022.60 in cash, it’s a solid basis for further stock acquisitions. I’m quite confident to realize my current goals.


Here is the income perspective of the portfolio


Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
16.79
3.65

28.90
50
$64.50
$1,765.50
LMT
Lockheed Martin C
13.8
3.72

92.72
20
$89.00
$2,400.00
INTC
Intel Corporation
12.46
3.9

21.27
50
$45.00
$1,163.00
MCD
McDonald's Corpor
18.08
3.09

87.33
15
$45.15
$1,470.45
WU
Western Union Com
10.32
2.77

11.95
100
$47.50
$1,696.00
PM
Philip Morris Int
17.33
3.85

85.42
20
$68.78
$1,777.60
JNJ
Johnson & Johnson
20.55
2.69

69.19
20
$49.80
$1,856.60
MO
Altria Group Inc
16.62
4.9

33.48
40
$70.40
$1,436.00
SYY
Sysco Corporation
20.08
3.21

31.65
40
$44.40
$1,390.80
DRI
Darden Restaurant
15.44
4.24

46.66
30
$61.50
$1,467.90
CA
CA Inc.
14.36
3.36

21.86
50
$50.00
$1,484.00
PG
Procter & Gamble
18.02
2.9

68.72
25
$58.20
$2,009.75
KRFT
Kraft Foods Group
21.13
3.54

44.41
40
$80.00
$2,258.00
MAT
Mattel Inc.
19.03
3.16

36.45
40
$53.60
$1,710.80
PEP
Pepsico Inc. Com
21.92
2.55

70.88
20
$43.60
$1,706.20
KMB
Kimberly-Clark Co
21.42
3.15

86.82
15
$46.50
$1,475.85
COP
ConocoPhillips Co
10.67
4.06

61.06
20
$52.80
$1,314.40
GIS
General Mills In
18.43
2.66

42.13
30
$41.10
$1,545.30
UL
Unilever PLC Comm
20.68
3.11

39.65
35
$44.91
$1,419.95
NSRGY
NESTLE SA REG SHR
18.99
3.22

68.69
30
$65.31
$2,007.00
GE
General Electric
18.28
3.1

23.39
65
$48.10
$1,602.25
ADP
Automatic Data Pr
24.55
2.36

61.65
25
$42.50
$1,812.00
K
Kellogg Company C
26.31
2.63

61.52
25
$44.00
$1,674.50
KO
Coca-Cola Company
21.51
2.62

38.83
40
$42.80
$1,625.60
RTN
Raytheon Company
12.23
3.01

57.04
20
$42.00
$1,400.20
RCI
Rogers Communicat
11.74
4.13

51.06
50
$83.30
$2,015.00
GPC
Genuine Parts Com
18.45
2.52

77.06
20
$41.28
$1,642.00
TSCDY
TESCO PLC SPONS A
226.67
4.05

17.98
110
$75.68
$1,855.70
APD
Air Products and
19.19
2.52

85.71
15
$40.50
$1,561.80
GSK
GlaxoSmithKline P
18.95
4.52

52.16
30
$70.38
$1,545.00
WMT
Wal-Mart Stores
15.37
2.23

79.25
20
$34.72
$1,560.00
BTI
British American
16.77
3.9

114.6
23
$95.22
$2,443.29
CHL
China Mobile Limi
10.54
4.11

55.32
25
$54.95
$1,334.50
MMM
3M Company Common
18.38
2.1

110.27
15
$36.75
$1,753.65
TUP
Tupperware Brands
24.08
2.36

80.98
15
$29.40
$1,247.25
IBM
International Bus
14.01
1.77

206.35
8
$28.00
$1,578.80
HAS
Hasbro Inc.
18.68
3.14

44.09
30
$44.40
$1,412.40
T
AT&T Inc.
27.42
5.05

34.47
30
$53.70
$1,068.00
WAG
Walgreen Co. Comm
22.31
2.16

44.25
30
$33.00
$1,524.60
AFL
AFLAC Incorporate
9.55
2.28

59.39
20
$27.60
$1,221.80
TGT
Target Corporatio
16.88
2.01

71.46
20
$28.80
$1,429.20
















$2,119.13
$66,662.64
















Average Yield
3.18%
















Yield On Cost
3.46%

No comments:

Post a Comment

Do you have any questions or notes to this article?
Please let me know your thoughts and we will discuss it.