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Showing posts with label Soft Drink. Show all posts
Showing posts with label Soft Drink. Show all posts

Coca-Cola Stock Buy For The Dividend Yield Passive Income Portfolio

I keep it short; Coca Cola is the next purchase for the Dividend Yield Passive Income Portfolio (DYPI). I bought 40 shares for a price of $38.30. The total purchase amount was $1,553.20. KO shares representing 1.7 percent of the full portfolio. It’s the eleventh biggest position.

Every Friday I plan to put one new stake into the DYPI-Portfolio. As of now, 24 companies are part of the portfolio and I have $65,609 in cash for further acquisitions. With this capital I plan to increase to total number of stock holdings to 50-70 by the end of this year. The DYPI-Portfolio was funded virtual on October 03, 2012.

Dividend Yield Passive Income Portfolio (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

The new Coke position will give me additional $44.80 of yearly dividend income. It represents a yield on cost of 2.88 percent. The full portfolio income is estimated at $1,267.47. I plan to boost the passive capital income to $3,000 to $4,000 by the end of this year. All I need to do is to keep the yield on cost of the portfolio over 3 percent. This plan developed to a tough fight because the yields going rapidly down for high-quality stocks. The reason is a very strong gaining stock market.

If the prices still rise, I needed to make a longer break or must cut my own target. For the time being, the current yield on cost is still over 3 percent at 3.64 percent but the actual portfolio yield is now below 3.4 percent.

The difference is reasonable with a small capital gain from the existing portfolio holdings (6.96 percent). This is still in-line with the performance of the market and major indices. Because of the high cash amount (65 percent of the mony is not invested), the full performance is only 2.63 percent or $2,409.95.

Portfolio Performance
I accept this underperformance because I like to buy slowly stocks in order to get better prices when single investments have starting difficulties. In addition I have many optionalities when there are new investment targets.
The disadvantage of this strategy is that I will lose performance when the market goes strongly up. This happened over the past months.

Why Coca Cola? Coke is a leading beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. KO is the dominating player followed by PepsiCo which is still part of my portfolio.

Coca-Cola is one of the safest long-term dividend growth stocks. The board from Coca-Cola managed to raise dividends over a period of 51 consecutive years. The beta ratio is very low (0.5). This figure is an expression of the high diversification and global presence of the company - KO generates 57% percent of its sales in Americans countries, 11.76% in Europe and 18.11% in Asian areas. Coke is also one of the world’s top brands with a very sustainable operating margin of 22.45 percent.

Dividends and Earnings per Share of Coca-Cola)

The drawback is that KO shares are highly priced. The current P/E is 19.71 and the yield at 2.88. Compared to other high-quality dividend growth stocks it’s in my view still a good ratio. Remember: The low yields from long-term bonds are not far away.

Coke’s future earnings are expected to grow in a range of 8 percent. The dividends should top this growth rate because of the smaller amount of outstanding shares (KO still purchases own shares for $3 billion).

Here is the income perspective of the Dividend Yield Passive Income Portfolio:

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
12.58
4.1

28.90
50
$64.25
$1,613.00
LMT
Lockheed Martin C
11.07
4.65

92.72
20
$86.00
$1,854.80
INTC
Intel Corporation
10.16
4.09

21.27
50
$44.25
$1,068.75
MCD
McDonald's Corpor
18.53
2.96

87.33
15
$44.10
$1,495.05
WU
Western Union Com
8.61
3.09

11.95
100
$45.00
$1,467.00
PM
Philip Morris Int
17.66
3.59

85.42
20
$65.58
$1,827.40
JNJ
Johnson & Johnson
20.49
3.08

69.19
20
$48.80
$1,583.80
MO
Altria Group Inc
16.42
5.12

33.48
40
$69.20
$1,347.20
SYY
Sysco Corporation
18.56
3.23

31.65
40
$43.60
$1,354.40
DRI
Darden Restaurant
13.97
3.95

46.66
30
$57.90
$1,481.10
CA
CA Inc.
12.97
3.92

21.86
50
$50.00
$1,272.00
PG
Procter & Gamble
17.56
2.9

68.72
25
$56.20
$1,908.50
KRFT
Kraft Foods Group
18.35
3.98

44.41
40
$80.00
$2,010.80
MAT
Mattel Inc.
19.05
3.05

36.45
40
$51.60
$1,685.60
PEP
Pepsico Inc. Com
19.68
2.79

70.88
20
$43.00
$1,540.80
KMB
Kimberly-Clark Co
21.22
3.23

86.82
15
$45.45
$1,398.90
COP
ConocoPhillips Co
8.85
4.47

61.06
20
$52.80
$1,181.40
GIS
General Mills In
17.13
2.79

42.13
30
$38.85
$1,387.20
UL
Unilever PLC Comm
20.74
3.03

39.65
35
$43.89
$1,442.00
NSRGY
NESTLE SA REG SHR
20.45
2.89

68.69
30
$63.15
$2,200.50
GE
General Electric
18.34
3.04

23.39
65
$46.80
$1,523.60
ADP
Automatic Data Pr
22.68
2.55

61.65
25
$41.50
$1,612.00
K
Kellogg Company C
23.31
2.81

61.52
25
$43.75
$1,555.00
KO
Coca-Cola Company
19.81
2.68

38.83
40
$41.80
$1,553.20
















$1,267.47
$37,364.00
















Average Yield
3.39%
















Yield On Cost
3.64%

I Bought Coke And Sold NYSE Euronext Yesterday

Stocks I Bought and Sold Yesterday

Yesterday was an active trading day for me. I sold 90 share of the diversified investment group NYSE Euronext (NYX) at $36.50 and bought 100 shares of Coca Cola (KO).

No further fantasy for NYSE Euronext Shares

I sold NYX shares because the stock price is around 10% over the takeover price announced by the IntercontinentalExchange (ICE). I believe that it could be possible that another exchange could start a second offer and overbid the current price. So my sell-off was only a part of my full position. With the rest I could benefit from a higher offer. However, fantasy with the NYX is over. I don’t see any growth perspectives if the deal passes through. ICE, CME and BOCE are more interesting now.

My whole NYX stake was up around 40% and I like to hedge these gains. Now, everything is nearly safe and my big risk in this position is off.
In addition, I bought some shares of Coca Cola and increased my stake by a significant number. KO was the best performing of my core holdings over the recent years but compared to the other stocks I own, it is still an underperformer.

Cocal Cola is down, but long-term still a buy

KO was down 2.72% yesterday. The earnings results were solid but the market expected more. I don’t really care about the current price levels and quarter reports. They change too fast. I am a long-term investor. I bought several times KO shares and increased my position every time at a higher rate. That’s not a good choice but if my portfolio grows, I need to increase the total amount of my safe heaven core holdings.

I love stocks with very long dividend growth, a trustful managements and solid market positions in several markets worldwide. KO is definitely not cheap. The EV/EBITDA ratio is at 14! The yield is still acceptable at 2.72%. I expect that the yield should climb over 3% with the next dividend hike.

I have several beverage stocks and they all have a very high valuation. I don’t know why but in the market is a huge fight about big companies with strong brands and distribution power.

Companhia de Bebidas Das Americas offers a higher risk

Companhia de Bebidas Das Americas (ABV) is an aggressively buying company in the brewing industry. They lend huge amounts of debt to buy the biggest brewers in the world. I don’t like those offensive strategies, especially when they pay prices at 14x of the EBITDA, but they are somehow successful and the stock price explode. Coke is not cheap but solid. I believe that it should be possible to realize a yearly long-term return of 8% or more.

PepsiCo: A Big Dividend Payer For My Dividend Yield Passive Income Portfolio


Last Friday I put 20 PepsiCo shares into the Dividend Yield Passive Income Portfolio (DYPI). The total purchase amount was $1,422 which represents roughly 1.4 percent of the whole portfolio net worth.

PepsiCo is a global food and beverage company. It’s the second biggest soft drink producer and distributor in North-America (behind Coca Cola) and a Dividend Champion with 40 years of consecutive dividend growth.  Additionally, it owns a number of other businesses - ranging from fruit juices and other non carbonated drinks to bottled water and breakfast cereal. PepsiCo's most important division is its food products  division, which consists of Frito-Lay and Quaker Oats.

The DYPI-Portfolio was funded virtual with $100,000 on October 04, 2012. I like to show you with this experiment that you can make money with dividend stocks if you are a wise, disciplined and patient investor with a long-term investment horizon.

I have realized a double-digit return since I started investing money into stocks. I lost much money over years - that's part of the business. But I ever had stocks with a great total return that paid me off.

One of my trading accounts with the longest performance history shows that I made a six-figure gross income with stock trading over the recent decade. One third of my profits came from dividends and two third were capital gains.

Investing money into dividend stocks is no one-way strategy to trading success. It’s hard work and should give you fun. You should enjoy reading my blog and other stuff from the capital market. Educate yourself and create your own investment philosophy. Out there are so many investment opportunities to make money with.

I did it too and made big money. Today I live off dividend payments. My annualized dividend income is in a five-figure range.

Why did I put PepsiCo into the Dividend Yield Passive Income Portfolio?

Well my first thoughts were that I don’t have enough low beta stocks with a higher capitalization and a broader diversified business model. PepsiCo is not a cheap stock. The company has a current P/E ratio of 18.90 and the forward P/E is expected at 16.07. Earnings growth is weak for the time being. For the next year, earnings per share are expected to grow by 8.62 percent and for the next five years the growth is expected at 6.18 percent.

PepsiCo is a must have investment for a long-term dividend growth investor like me. I own the company personally despite the fact that the performance was very weak within the recent years. I hold roughly 2.79 percent of my full real net worth in the company. My biggest position is still Philip Morris with 6.87 percent portfolio share.

The PepsiCo stake will give me around $45 dividend income per year. The full portfolio dividend income is estimated at $800. I will put more stocks into the DYPI-Portfolio. As of now I own around 15 stocks and have still $78,926.55 in cash for further stock acquisitions.

At the end of the year 2013 the total number of shares in the portfolio should count 50 – 70. As a result, the yearly dividend income will grow to 3,000 – 4,000. For the upcoming 10 years, this amount should double. That's my aim!

What do you think about my thoughts? Is it possible? Is PepsiCo the right stock for the DYPI-Portfolio to achieve these goals? Please share your thoughts with me and leave a small comment below. I will reply you.

Here is the current portfolio:

Dividend Yield Passive Income Portfolio Overview (Click to enlarge)

These are the latest portfolio transactions:

Lastest Dividend Stock Buys Passive Income Portfolio (Click to enlarge)

Here is a snapshot of the 3 biggest companies including PepsiCo:

PepsiCo (NYSE:PEP) has a market capitalization of $109.64 billion. The company employs 297,000 people, generates revenue of $66.504 billion and has a net income of $6.462 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12.242 billion. The EBITDA margin is 18.41 percent (the operating margin is 14.48 percent and the net profit margin 9.72 percent).

Financial Analysis: The total debt represents 36.73 percent of the company’s assets and the total debt in relation to the equity amounts to 130.04 percent. Due to the financial situation, a return on equity of 30.66 percent was realized. Twelve trailing months earnings per share reached a value of $3.75. Last fiscal year, the company paid $2.02 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.88, the P/S ratio is 1.65 and the P/B ratio is finally 5.35. The dividend yield amounts to 3.03 percent and the beta ratio has a value of 0.45.


”Long-Term
Long-Term Stock History Chart Of PepsiCo (PEP)
”Long-Term
Long-Term Dividends History of PepsiCo (PEP)
”Long-Term
Long-Term Dividend Yield History of PepsiCo (PEP)

Dr Pepper Snapple Group (NYSE:DPS) has a market capitalization of $9.38 billion. The company employs 19,000 people, generates revenue of $5.903 billion and has a net income of $605.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.231 billion. The EBITDA margin is 20.85 percent (the operating margin is 17.35 percent and the net profit margin 10.25 percent).

Financial Analysis: The total debt represents 29.17 percent of the company’s assets and the total debt in relation to the equity amounts to 119.66 percent. Due to the financial situation, a return on equity of 25.67 percent was realized. Twelve trailing months earnings per share reached a value of $2.92. Last fiscal year, the company paid $1.21 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.42, the P/S ratio is 1.59 and the P/B ratio is finally 4.23. The dividend yield amounts to 3.02 percent and the beta ratio has a value of 0.71.


”Long-Term
Long-Term Stock History Chart Of Dr Pepper Snapple Group (DPS)
”Long-Term
Long-Term Dividends History of Dr Pepper Snapple Group (DPS)
”Long-Term
Long-Term Dividend Yield History of Dr Pepper Snapple Group (DPS)

Coca-Cola (NYSE:KO) has a market capitalization of $165.55 billion. The company employs 146,200 people, generates revenue of $46.542 billion and has a net income of $8.634 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12.596 billion. The EBITDA margin is 27.06 percent (the operating margin is 23.06 percent and the net profit margin 18.55 percent).

Financial Analysis: The total debt represents 35.72 percent of the company’s assets and the total debt in relation to the equity amounts to 90.31 percent. Due to the financial situation, a return on equity of 27.37 percent was realized. Twelve trailing months earnings per share reached a value of $1.92. Last fiscal year, the company paid $0.94 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.26, the P/S ratio is 3.56 and the P/B ratio is finally 5.28. The dividend yield amounts to 2.76 percent and the beta ratio has a value of 0.50.


”Long-Term
Long-Term Stock History Chart Of Coca-Cola (KO)
”Long-Term
Long-Term Dividends History of Coca-Cola (KO)
”Long-Term
Long-Term Dividend Yield History of Coca-Cola (KO)