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John Deere (DE): The New Dividend Payer For My Passive Income Portfolio

I put some shares of the farm equipment manufacturer Deere into the Dividend Yield Passive Income Portfolio.

Deere pays a 2.43 percent dividend yield and is valuated with a P/E of 10.35. The forward P/E amounts to 9.95. Analysts predict the future 5-Year earnings per share growth at 9 percent yearly.

I don’t like the business model because of its capital intensive structure. Deere made huge investments into its production plants each year to keep the productivity at a high level. That’s the main reason for the low payout of 23 percent and the high debt burdens of the company.

Earnings and Dividends of Deere

Here is what the company produces: Deere & Company manufactures and distributes agriculture and turf equipment, and construction and forestry equipment worldwide. Its Agriculture and Turf segment provides agriculture and turf equipment, and related service parts, including large, medium, and utility tractors; loaders; combines, corn pickers, cotton and sugarcane harvesters, and related front-end equipment and sugarcane loaders; tillage, seeding, and application equipment comprising sprayers, nutrient management, and soil preparation machinery; and hay and forage equipment consisting of self-propelled forage harvesters and attachments, balers, and mowers.

I love the cheap valuation. I think that I have a 30 to 50 percent margin of safety before I lose some money. This could also be my potential gain.

As you might have heard, UralKali plans to increase its Kali production with the expected result of lower prices. Farms with high input costs of kali could increase profits on their agricultural products. With a higher agricultural return, investments into farm equipments could be made easier. That’s my speculation and Deere is the biggest fish in the pool of crop picking engines.

The Deere trade is a definitely more speculative driven investment.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Portfolio I (Click to enlarge)

Dividend Yield Portfolio II (Click to enlarge)


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For readers who are 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.
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I paid $1,266.65 for my stake in Deere which will give me around $30 bucks in additional dividend income per year.

The expected full year dividend income is now estimated at $2,157 per year. By the end of this year the amount of dividend income should rise to over $3,000 per year and double over the next decade to more than $6,000 per year without work.

With USD 36,023.98 in cash and a yield on cost of 3.32 percent, I’m still confident to realize my goals.

Portfolio Performance (Click to enlarge)


Here is the income perspective of the portfolio

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
26.51
3.7

28.90
50
$64.25
$1,740.00
LMT
Lockheed Martin C
13.7
3.52

92.72
20
$86.00
$2,444.00
INTC
Intel Corporation
11.9
4.09

21.27
50
$45.00
$1,095.75
MCD
McDonald's Corpor
17.46
3.08

87.33
15
$44.10
$1,425.45
WU
Western Union Com
11.49
2.47

11.95
100
$45.00
$1,825.00
PM
Philip Morris Int
16.93
3.85

85.42
20
$67.18
$1,715.00
JNJ
Johnson & Johnson
19.88
2.72

69.19
20
$48.80
$1,787.40
MO
Altria Group Inc
15.8
5

33.48
40
$69.20
$1,371.60
SYY
Sysco Corporation
18.88
3.39

31.65
40
$44.00
$1,298.00
DRI
Darden Restaurant
15.26
4.18

46.66
30
$60.00
$1,437.30
CA
CA Inc.
13.54
2.42

21.86
50
$37.50
$1,527.25
PG
Procter & Gamble
20.85
2.79

68.72
25
$56.20
$1,997.50
KRFT
Kraft Foods Group
17.51
3.79

44.41
40
$80.00
$2,110.80
MAT
Mattel Inc.
18.86
3.19

36.45
40
$53.60
$1,666.00
PEP
Pepsico Inc. Com
19.06
2.66

70.88
20
$43.00
$1,603.60
KMB
Kimberly-Clark Co
20.37
3.16

86.82
15
$45.45
$1,424.10
COP
ConocoPhillips Co
11.28
29.08

61.06
20
$52.80
$1,347.60
GIS
General Mills In
18.12
2.61

42.13
30
$39.60
$1,481.40
UL
Unilever PLC Comm
18.91
3.12

39.65
35
$43.89
$1,405.25
NSRGY
NESTLE SA REG SHR
18.64
3.23

68.69
30
$65.31
$2,007.00
GE
General Electric
17.76
3

23.39
65
$46.80
$1,556.75
ADP
Automatic Data Pr
24.81
2.37

61.65
25
$42.50
$1,797.25
K
Kellogg Company C
24.7
2.71

61.52
25
$43.75
$1,573.75
KO
Coca-Cola Company
20.58
2.67

38.83
40
$41.80
$1,562.00
RTN
Raytheon Company
13.06
2.71

57.04
20
$41.00
$1,534.80
RCI
Rogers Communicat
11.1
3.94

46.5
50
$81.15
$2,025.50
GPC
Genuine Parts Com
17.74
2.57

77.06
20
$40.44
$1,556.60
TSCDY
TESCO PLC SPONS A
230
3.99

17.08
110
$75.68
$1,917.30
APD
Air Products and
21.65
2.59

85.71
15
$39.45
$1,513.35
GSK
GlaxoSmithKline P
19.61
4.55

52.16
30
$70.35
$1,548.90
WMT
Wal-Mart Stores
14.66
2.24

79.25
20
$33.28
$1,482.20
BTI
British American
16.31
3.88

111.13
23
$95.22
$2,448.58
CHL
China Mobile Limi
10.7
4.02

55.32
25
$54.45
$1,352.50
MMM
3M Company Common
18.13
2.08

110.27
15
$36.08
$1,738.50
TUP
Tupperware Brands
18.56
1.97

80.98
15
$25.50
$1,293.00
IBM
International Bus
13.19
1.83

197.09
16
$54.40
$2,965.44
HAS
Hasbro Inc.
18.21
3.37

44.09
30
$45.60
$1,346.85
T
AT&T Inc.
26.3
5.18

34.47
30
$53.40
$1,025.40
WAG
Walgreen Co. Comm
21.45
2.14

44.25
30
$31.50
$1,465.20
AFL
AFLAC Incorporate
8.39
2.25

59.39
20
$27.20
$1,210.80
TGT
Target Corporatio
16.23
2

71.46
20
$27.60
$1,371.60
CSCO
Cisco Systems In
13.6
2.53

26.19
50
$31.00
$1,213.50
DE
Deere & Company C
10.38
2.24

84.11
15
$28.35
$1,261.65
















$2,157.38
$69,471.42
















Average Yield
3.11%
















Yield On Cost
3.32%

1 comment:

  1. Hi
    your post was stuffed one..i can see the exact value as you have mentioned in graph it is useful for all..Thanks for sharing..

    Pension

    ReplyDelete

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