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Technology Giant Oracle (ORCL) Becomes A New Stake In Our Portfolio

The markets are hot priced and we must accept that there are no cheap bargains available on the market. 

On the latest trading day of the month, I decided to purchase a new holding company for the Dividend Yield Passive Income Portfolio. 

It was the technology stock Oracle. Like Microsoft, Oracle dominates the application software market for business clients. Databases are core products of Oracle.

Earnings and Dividends of Oracle (ORCL)

The company is not a well-known dividend grower because it invested much money into big acquisitions within the recent years. 

Acquisitions were the main growth driver which boosted sales to a total amount of $37 billion compared to $10 billion a decade before. Earnings increased by a factor of 3.7 during the same period.

I love technology stocks because of the high cash amounts and the strong growing cash flows. Most of the big technology giants started to give money back to shareholders and I’m pretty confident that Oracle will also give back some parts of his wealth.

I purchased 40 shares at $35.20 which resulted in $1,413 total investment amount. The new stake will not deliver high dividends due to the low payout of Oracle. 

In total, the stake should bring around $17 per year but has great potential to grow over the next years. The current dividend payout ratio is at 30 percent.

More interestingly is the cheap valuation of Oracle, measured by a forward P/E of 11.12. With long-term growth perspectives, it’s in my view a solid stock for the portfolio that could deliver growth possibilities at an attractive price.

Most of the big technology companies are real underperformer this year. Oracle is up 12.28 percent year to date but did not outperform major indices. The Dow is up 19.71 percent and the S&P 500 hit the 25 percent recently. 

Latest Portfolio Transactions (Click to enlarge)

Latest Portfolio I (Click to enlarge)

Latest 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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The full portfolio performance amounts to 11.1 percent. That’s an underperformance compared to the major indices but the major goal is not to make quick money in strong rising markets. The aim is to create a long-term orientated portfolio that doubles its income each 10 years.

The underperformance is also reasonable to the slow purchasing process and high cash amounts over the past year which was part of the strategy.

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
33.8
3.47
28.90
50
$65.00
$1,869.00
LMT
Lockheed Martin C
15.36
3.32
92.72
20
$95.60
$2,833.40
INTC
Intel Corporation
12.93
3.77
21.27
50
$45.00
$1,192.00
MCD
McDonald's Corpor
17.52
3.21
87.33
25
$78.00
$2,434.25
WU
Western Union Com
11.14
2.97
11.95
100
$50.00
$1,667.00
PM
Philip Morris Int
16.23
4.13
89.76
30
$105.87
$2,566.20
JNJ
Johnson & Johnson
21.18
2.73
69.19
20
$51.80
$1,893.20
MO
Altria Group Inc
14.49
4.85
33.48
40
$72.00
$1,479.20
SYY
Sysco Corporation
20.37
3.31
31.65
40
$44.80
$1,345.20
DRI
Darden Restaurant
19
3.93
46.66
30
$63.00
$1,599.90
CA
CA Inc.
14.06
3.04
21.86
50
$50.00
$1,650.00
PG
Procter & Gamble
21.42
2.81
68.72
25
$59.20
$2,105.50
KRFT
Kraft Foods Group
17.24
3.79
44.41
40
$80.00
$2,124.80
MAT
Mattel Inc.
19.37
3.11
36.45
40
$57.60
$1,850.80
PEP
Pepsico Inc. Com
19.82
2.62
70.88
20
$44.20
$1,689.20
KMB
Kimberly-Clark Co
22.5
2.93
86.82
15
$47.55
$1,637.40
COP
ConocoPhillips Co
11.11
3.72
61.06
20
$52.80
$1,456.00
GIS
General Mills In
18.93
2.81
42.13
30
$42.60
$1,512.90
UL
Unilever PLC Comm
18.94
3.47
39.65
35
$48.83
$1,417.50
NSRGY
NESTLE SA REG SHR
20.16
2.98
68.69
30
$65.31
$2,193.30
GE
General Electric
20.17
2.83
23.39
65
$49.40
$1,732.90
ADP
Automatic Data Pr
27.32
2.17
61.65
25
$43.50
$2,000.50
K
Kellogg Company C
23.28
2.96
61.52
25
$45.00
$1,516.00
KO
Coca-Cola Company
20.83
2.79
38.83
40
$44.80
$1,607.60
RTN
Raytheon Company
15.36
2.41
57.04
20
$43.00
$1,773.60
RCI
Rogers Communicat
12.07
3.77
46.5
50
$84.00
$2,241.50
GPC
Genuine Parts Com
18.35
2.57
77.06
20
$42.12
$1,656.80
TSCDY
TESCO PLC SPONS A
N/A
4.1
17.08
110
$75.79
$1,888.70
APD
Air Products and
23.3
2.54
85.71
15
$41.55
$1,632.45
GSK
GlaxoSmithKline P
20.68
4.59
52.16
30
$72.24
$1,587.60
WMT
Wal-Mart Stores
15.55
2.23
79.25
20
$36.16
$1,620.20
BTI
British American
16.23
3.93
111.13
23
$96.14
$2,445.59
CHL
China Mobile Limi
10.63
4.13
55.32
40
$89.52
$2,169.60
MMM
3M Company Common
20.51
1.9
110.27
15
$38.10
$2,002.65
TUP
Tupperware Brands
19.13
2.43
80.98
15
$33.30
$1,370.10
IBM
International Bus
12.39
2.07
193.17
20
$74.00
$3,593.60
HAS
Hasbro Inc.
24.69
2.9
44.09
30
$46.80
$1,614.60
T
AT&T Inc.
25.92
5.08
34.47
30
$54.00
$1,056.30
WAG
Walgreen Co. Comm
23.13
1.99
44.25
30
$35.40
$1,776.00
AFL
AFLAC Incorporate
10.15
2.14
59.39
20
$28.40
$1,327.40
TGT
Target Corporatio
17.24
2.45
68.69
32
$50.56
$2,045.76
CSCO
Cisco Systems In
11.57
2.4
25.12
90
$45.90
$1,912.50
DE
Deere & Company C
9.22
2.37
84.11
15
$29.85
$1,263.60
RGR
Sturm Ruger & Co
14.6
2.76
51.65
20
$42.48
$1,538.60
LO
Lorillard Inc Co
16.2
4.27
42.3
30
$66.00
$1,539.90
UNP
Union Pacific Cor
17.95
1.82
154.75
8
$23.68
$1,296.32
IDA
IDACORP Inc. Com
15.38
3.06
47.94
20
$31.40
$1,033.60
BAX
Baxter Internatio
17.28
2.76
66.38
20
$37.60
$1,369.00
MSFT
Microsoft Corpora
14.08
2.58
33.88
40
$38.80
$1,525.20
ACN
Accenture plc. Cl
15.73
2.24
77.71
20
$34.80
$1,549.40
BCE
BCE Inc. Common
14.49
3.9
44.26
25
$42.98
$1,104.75
VZ
Verizon Communica
65.01
4.16
50.31
30
$62.25
$1,488.60
CVX
Chevron Corporati
10.01
3.19
124.03
10
$39.00
$1,224.40
ORCL
Oracle Corporatio
15.17
1.19
35.2
40
$16.80
$1,411.60














$2,854.47
$93,433.67














Average Yield
3.06%














Yield On Cost
3.39%

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