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British Retailer Tesco Is The New Stock Buy For The Dividend Yield Passive Income Portfolio

Last Friday I purchased 70 shares of the British retailer Tesco plc. Tesco is an international retailer. The activity of the Company is retailing and associated activities in the United Kingdom, the People’s Republic of China, the Czech Republic, Hungary, the Republic of Ireland, India, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and the United States. The Company also provides retail banking and insurance services through its subsidiary, Tesco Bank.

76 percent of sales come from Europe while 16 percent are from Asian/Pacific countries. The Middle East contributes 6.43 percent to Tesco's sales.

Tesco has a current dividend yield of 3.87 percent and a P/E of 11.21. The valuation looks cheap for a leading and deeply integrated company like Tesco. But the reason for the low valuation is due to the fact that the british economy is down and consumer spendigs are still weak. However, I believe that Tesco is one of the best picks from the British country and also one of the highest yielding companies at the FTSE. Because of the weak performance and high focus on the U.K. market, I underweight the stock in my portfolio.


Earnings and Dividends of Tesco Plc

The stake costs $1,258.60 and represents only 1.2 percent of the portfolio value. The Dividend Yield Passive Income (DYPI) portfolio was funded virtual on October 04, 2013 with $100,000. The portfolio holdings are up 9.16% since the date of funding. Because of the high amount of cash (still $60,265 is cash on banks), the overall performance amounts to 4.05%.


Portfolio Performance (Click to enlarge)
That’s a result of the strategy to buy one stock each week with a 1 to 2 percent weighting. I don’t like to show how to make fast money with hot stocks and you won’t learn from my blog how to get quick rich. 

All I try to do is to find solid dividend growth stocks which investors could hold over a long period and let them participate on the business success. The second rule I’ve implemented was an acceptable yield. I try to put stocks with a yield above the 3 percent mark into the DYPI-Portfolio. That’s a big burden because many good dividend growth stocks have a yield below this magic level.

But for me it's absolutely nessecairy to receive high cash flows from your investments. This alone hedges you against inflation and stock price losses. Not enough, it gives you more possibilites to grow your investments.


Dividend Yield Passive Income Portfolio Overview (Click to enlarge)


Latest Portfolio Transactions (Click to enlarge)

The new stake will give me additional $50 per year in dividend income. The full year estimated dividend income of the DYPI-portfolio amounts to $1,402.45. By the end of this year, I plan to boost the income to a level of $3,000 to $4,000. All I need to do is to buy stocks with a yield on cost of more than 3 percent. As of now I’ve achieved this goal. The yield on cost amounts to 3.48 percent. Due to the capital gains of 9.16 percent or $3,674.10, the current portfolio yield slipped to 3.27 percent.

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
13.17
3.92

28.90
50
$64.25
$1,630.50
LMT
Lockheed Martin C
11.64
4.42

92.72
20
$86.00
$1,943.60
INTC
Intel Corporation
10.25
4.05

21.27
50
$44.25
$1,083.75
MCD
McDonald's Corpor
19.03
2.88

87.33
15
$44.10
$1,553.85
WU
Western Union Com
8.95
2.97

11.95
100
$45.00
$1,504.00
PM
Philip Morris Int
18.49
3.51

85.42
20
$67.18
$1,928.80
JNJ
Johnson & Johnson
21.33
2.96

69.19
20
$48.80
$1,654.80
MO
Altria Group Inc
17.3
4.86

33.48
40
$69.20
$1,436.40
SYY
Sysco Corporation
19.03
3.18

31.65
40
$44.00
$1,384.80
DRI
Darden Restaurant
15.2
4.01

46.66
30
$60.00
$1,507.80
CA
CA Inc.
12.65
4.02

21.86
50
$50.00
$1,246.50
PG
Procter & Gamble
18.08
2.82

68.72
25
$56.20
$2,002.00
KRFT
Kraft Foods Group
18.55
3.84

44.41
40
$80.00
$2,082.80
MAT
Mattel Inc.
19.91
2.92

36.45
40
$51.60
$1,760.80
PEP
Pepsico Inc. Com
20.38
2.69

70.88
20
$43.00
$1,599.80
KMB
Kimberly-Clark Co
22.88
3.20

86.82
15
$45.45
$1,518.45
COP
ConocoPhillips Co
8.95
4.45

61.06
20
$52.80
$1,187.20
GIS
General Mills In
18.04
2.68

42.13
30
$39.60
$1,480.50
UL
Unilever PLC Comm
21.55
2.92

39.65
35
$43.89
$1,505.00
NSRGY
NESTLE SA REG SHR
20.36
2.91

68.69
30
$63.15
$2,172.00
GE
General Electric
18.26
3.05

23.39
65
$46.80
$1,524.90
ADP
Automatic Data Pr
23.06
2.51

61.65
25
$41.50
$1,647.75
K
Kellogg Company C
24.07
2.72

61.52
25
$43.75
$1,617.50
KO
Coca-Cola Company
20.9
2.54

38.83
40
$41.80
$1,643.20
RTN
Raytheon Company
10.54
3.51

57.04
20
$41.00
$1,166.80
RCI
Rogers Communicat
15.5
3.15

51.06
30
$48.69
$1,531.50
GPC
Genuine Parts Com
18.84
2.59

77.06
20
$40.44
$1,554.80
TSCDY
TESCO PLC SPONS A
10.91
3.99

17.98
70
$49.63
$1,258.60
















$1,402.45
$42,869.80
















Average Yield
3.27%
















Yield On Cost
3.48%