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Showing posts with label General Mills. Show all posts
Showing posts with label General Mills. Show all posts

Kellogg Is The New Stock Holding In The Dividend Yield Passive Income Portfolio

On Friday 08, 2013 I put 25 shares of the processed & packaged goods company Kellogg into the Dividend Yield Passive Income Portfolio (DYPI). 

The total purchase amount was $1,543 at a stock price of $61.52. Kellogg represents now 1.47 percent of the full portfolio which was funded virtual with 100k on October 03, 2012.

Kellogg manufactures and markets ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America, and the Asia Pacific. It primarily produces snacks and frozen food, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods. The company sells its products to grocery trade through its direct sales force, brokers, and distributors under the Kellogg's name.

The current dividend yield of Kellogg amounts to 2.86% and the P/E ratio has a value of 23.94. Growth is expected in earnings for the next years around the 7% percent mark. That’s solid in my view.

The new stake will hike my current dividend income by $44. The total gross income is now estimated at $1,221.97. I plan to boost the passive income to $3,000 – 4,000 by the end of the year. All I need to do is to invest the remaining capital of $67,127.40 into dividend stocks with a yield around the 3% mark.

Dividend Yield Passive Income Portfolio


Latest Portfolio Transactions

The Kellogg buy is the second stock purchase with a yield below the 3% yield. You can see that its getting hard to find stocks with a higher yield. If I have luck, the next hike can lift the current yield above the magic level.

For sure, high quality stocks have a high price and you must pay it or leave the battle field. In my view it is still a better choice to have high valuated stocks with a top long-term growth perspective as being invested in bonds with a longer duration. In times of rising interest rates and gaining inflation, your bond portfolio will definitely loose the ground. Dividend stocks like Kellogg force the inflation and get stronger with every recession.


Kellogg Earnings and Dividends

The full portfolio is up 2.2 percent since the date of funding. Major indices gained 3-6% during the same period. The lower performance is reasonable with a high cash amount and the slow purchase process. I buy only one stock a week for around 1-2 percent of the portfolio value. This strategy hedges me against falling markets and could give a better average price but will also lead to a worser performance if the markets go strong up. Unfortunately, this happened in the past. My stockholdings delivered a total return of 6.15%. That’s a pretty good ratio and in-line with the market.


Portfolio Performance

Here is the income perspective of the portfolio:


Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
12.34
4.18

28.90
50
$64.25
$1,536.00
LMT
Lockheed Martin C
10.62
4.84

92.72
20
$86.00
$1,799.80
INTC
Intel Corporation
10.28
4.04

21.27
50
$44.25
$1,079.00
MCD
McDonald's Corpor
18.11
3.03

87.33
15
$44.10
$1,480.65
WU
Western Union Com
8.52
2.95

11.95
100
$42.50
$1,463.00
PM
Philip Morris Int
17.76
3.57

85.42
20
$65.58
$1,822.20
JNJ
Johnson & Johnson
20.14
3.14

69.19
20
$48.80
$1,563.80
MO
Altria Group Inc
16.49
5.01

33.48
40
$68.00
$1,360.00
SYY
Sysco Corporation
17.95
3.34

31.65
40
$43.60
$1,330.80
DRI
Darden Restaurant
13.57
4.06

46.66
30
$57.90
$1,419.90
CA
CA Inc.
12.69
4

21.86
50
$50.00
$1,254.00
PG
Procter & Gamble
17.45
2.92

68.72
25
$56.20
$1,929.50
KRFT
Kraft Foods Group
17.83
4.02

44.41
40
$80.00
$1,988.40
MAT
Mattel Inc.
18.58
3.13

36.45
40
$51.60
$1,657.20
PEP
Pepsico Inc. Com
19.66
2.79

70.88
20
$43.00
$1,544.00
KMB
Kimberly-Clark Co
21.26
3.22

86.82
15
$45.45
$1,412.85
COP
ConocoPhillips Co
8.61
4.52

61.06
20
$52.80
$1,167.80
GIS
General Mills In
17.14
2.79

42.13
30
$38.85
$1,389.90
UL
Unilever PLC Comm
20.45
3.08

39.65
35
$43.89
$1,431.15
NSRGY
NESTLE SA REG SHR
19.97
2.96

68.69
30
$63.15
$2,125.80
GE
General Electric
18.33
3.04

23.39
65
$46.80
$1,545.05
ADP
Automatic Data Pr
22.09
2.62

61.65
25
$41.50
$1,583.75
K
Kellogg Company C
23.02
2.85

61.52
25
$43.75
$1,538.00
















$1,221.97
$35,422.55
















Average Yield
3.45%
















Yield On Cost
3.67%

General Mills: A Solid Dividend Growth Pick For The Dividend Yield Passive Income Portfolio

Last Friday, on February 01, I purchased 30 shares of General Mills (GIS) for my Dividend Yield Passive Income Portfolio (DYPI).

The company manufactures and markets branded consumer foods worldwide. GIS also supplies branded and unbranded food products to the foodservice and commercial baking industries.

General Mills has managed to raise dividends over a period of 9 consecutive years and is a Dividend Challenger on the edge to become a Dividend Contender.

The full DYPI-Portfolio has now 18 members with a total cost of $24,984.45. Stocks from the portfolio are up 4.09 percent since October 05, 2012 – The date of funding. Total capital gain amounts to $1,021.30. 

As a result, $75,147.55 of cash is still available for further stock purchases. With this money I plan to increase the total number of stock holdings to a figure of 50-70 by the end of the year 2013.

Dividend Yield Passive Income Portfolio (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

Income is king for the asset allocation: The current estimated portfolio income after the General Mills buy amounts to $963.04. If I complete the acquisition process, the total dividend portfolio income should grow to a value of $3,000 – $4,000 per year.

For the time being, it seems that it’s getting harder to find cheap higher yielding stocks with solid growth perspectives. The market is hot and asset prices too. It could be possible that I need to look at stocks with a yield around the 2% mark.

The DYPI-Portfolio has a current yield of 3.66% and the yield on cost is slightly higher because of the capital gains - The amount is 3.82%. With growing stock holdings, the average yield should decrease to a value of around 3%.

Friday’s pick of General Mills is not a cheap solution. The company has a P/E of 15.55 and forward P/E is expected at 14.53. A solid growth of 8.21% is estimated for the next year with a slightly lower mid-term forecast for the next five years (7.98%).

However, price ratios are ok for a high quality dividend growth stock. The only problem could be the low international diversification as well as the high debt amount. GIS generates only 17 percent of its revenue abroad. That’s too low in a world were China is the only growth solution for many companies. The market position within the United States is solid.

Earnings and Dividends
Because of the high debt of $5.5 billion at $1.5 billion net income, the company must act careful when it wants to be consolidation winner.

The current portfolio performance is good but compared to the return of the whole market, it’s a clear underperformance because the Dow Jones is up 5.12% and the S&P 500 gained 5.61%. What the heck - There are worse happenings.

The approach of the DYPI-Portfolio is not to show you how to get quick rich or to show how you can make fast money by trading stocks. There are so many other tools to realize a quick return. But those tools are also more risky and you need to take a steady look at your prices and assets.

Dividend Yield Portfolio Performance (Click to enlarge)

With a passive income portfolio, you can place your money into solid dividend growth stocks and participate on the long-term business success. It’s a strategy with an investment horizon of at least 10 years or more.

I personally invested money into dividend stocks and other assets for more than 10 years and my annualized return is on average in a double-digit range.

Dividend growth will not make you quick rich but it could hedge your assets against inflation and provide you a good return of at least 8%. All you need is a wise investment strategy and a long investment horizon.

Here is the portfolio:


Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
N/A
4.18

28.90
50
$64.00
$1,546.50
LMT
Lockheed Martin C
10.39
4.78

92.72
20
$83.00
$1,744.40
INTC
Intel Corporation
9.88
3.14

21.27
50
$33.00
$1,067.75
MCD
McDonald's Corpor
17.79
3.01

87.33
15
$43.05
$1,439.25
WU
Western Union Com
7.04
2.99

11.95
100
$42.50
$1,438.00
PM
Philip Morris Int
17.63
3.72

85.42
20
$65.58
$1,762.60
JNJ
Johnson & Johnson
19.16
3.25

69.19
20
$48.00
$1,483.60
MO
Altria Group Inc
16.35
5.05

33.48
40
$68.00
$1,368.00
SYY
Sysco Corporation
16.9
3.43

31.65
40
$43.60
$1,283.60
DRI
Darden Restaurant
13.29
4.15

46.66
30
$57.90
$1,405.20
CA
CA Inc.
12.62
4.03

21.86
50
$50.00
$1,251.50
PG
Procter & Gamble
17.06
2.99

68.72
25
$56.20
$1,898.00
KRFT
Kraft Foods Group
14.11
4.29

44.41
40
$80.00
$1,864.00
MAT
Mattel Inc.
15.61
3.3

36.45
40
$49.60
$1,530.40
PEP
Pepsico Inc. Com
19.4
2.92

70.88
20
$42.56
$1,453.40
KMB
Kimberly-Clark Co
20.26
3.31

86.82
15
$44.40
$1,350.15
COP
ConocoPhillips Co
8.63
4.49

61.06
20
$52.80
$1,176.40
GIS
General Mills In
15.48
3.09

42.13
30
$38.85
$1,263.90
















$963.04
$26,326.65
















Average Yield
3.66%
















Yield On Cost
3.82%