4 Top Dividend Picks From The Discount Variety Stores Industry To Benefit From Black Friday

The last month of the year is the most important month within the whole year because up to 1/4 of the full-year sales are generated within December. 

Everybody loves to buy great things that helps you to improve you life quality, makes living easier and keeps your friends and family members happy.

Black Friday is the first day on which analysts start to measure the consumer activity by spending money. Black Friday gives us a good sign if the shopping season will end at new records or not.

Today I would like to present you four of the most popular discount store operators that pay the best industry dividends and have managed to grow them over the past years.

Get A Higher Portfolio Stability With German Dividend Stocks

The German economy continues to spur growth while reinforcing its standing as a key global location for direct investment. The country has the most attractive business environment in Europe and the fifth worldwide. 

The Germany’s FDI stocks increased to approximately EUR 50 billion. There are more than 55,000 foreign companies are operating in Germany which are employing around three million people. Today I would like to look at one of the best dividend stocks in Germany which is paying a favorable dividend yield.

Metro AG

Profile

It is a German global diversified retail and wholesale company. The company has the largest market shares in its home market, and is one of the most globalized retail and wholesale corporations. It operates of portfolio of sales brands which offers a range of services for private and commercial customers. The company is the fifth-largest retailer in the world measured by revenues. It was established in 1964 by Otto Beisheim.

Its portfolio includes Metrol Cash & Carry brand which is active in the self-service wholesale industry, Real hypermarkets brand, which operates the Real stores across Europe offering both food and non-food products, Media market brand which is active on the European market in the consumer electronics retailing industry; Saturn brand, which operates consumer electronics stores and Galeria Kaufhof brand, under which the company operates department stores in Germany and Belgium. The company is also involved in the Real Estate management services of its own real estate, logistics services of its distribution and procurement network, supporting its IT solutions and Advertising servicing.

History

Metro was founded in 1996 within a period of only ten months through a merger of the retail companies Asko Deutsche kaufhaus AG, Kaufhof Holdings AG and Deutsche SB-Kauf AG. At that time the company had a market capitalization of 12.07 billion German marks. It was one of the 20 largest publicly listed companies in Germany. In 1999 the company liquidated its retail properties. This gave the company leeway for key investments, which accelerate its growth in wholesale and retail. Additionally the company continues to consistently expand its international presence: 16 Metro Cash & Carry wholesale outlets, ten Real hypermarkets and 47 nonfood specialty centers open abroad.  

In the year of 2000 the company had developed into an internationally oriented company with decentralized management teams. The group employed approximately 220, 000 people in 22 countries. For the first time the group released its financial statement for the year 2000 in accordance to the International Accounting Standards (IAS) to achieve greater transparency in its accounting. In this year the company ranked no. 18 among DAX 3 among DAX 30 companies. The Metro Share was one of the 20 most traded DAX stocks. In 2009 the company has more weigh to the subject sustainability, making it an integral part of its corporate strategy by founding a Sustainability Committee.

Strategy

In 2011 Metro Group refocused its strategy to boost its competitiveness across all sales lines.  The company is also boosting its performance strength by increasing its margins and improving its cost position and cash flow. To this end it focuses its entire team on creating value for customers on the basis of five priorities which include Transform, Grow, Improve, Expand, and Innovate.

Why invest in Metro

When you invest in Metro Group which is the world’s fourth-largest retail company you will find many advantages. There are many reasons to invest in this company such as:

• The company is no. 1 in consumer electronics retailing in Europe. It is a leading company in the department store segment in Germany and Belgium.
• It has a unique international portfolio of commercial real estate properties.
• The company is present in more than 30 countries with outstanding market positions in emerging and developed markets worldwide.
• It works with a strategy of profitable growth as well as sustainable and consequent value enhancement.
• The company also has high self-financing ability and above-average return on equity compared to competitors.

Dividend history

At the present time, the company has a market capitalization of 9.80 Billion, EPS is 0.67, P/E ratio is 44.66 and the dividend yield is 3.33% at the annual dividend payout of 1.00.

For more information related to Dividend Stocks in Germany please visit the site DividendInvestor.de

Target: Next Stock Purchase For The Dividend Yield Passive Income Portfolio

I bought 20 shares of the discount store operator Target. The company yields at 2.41 percent and is priced with a P/E of 16.77. Due to growth, the forward P/E should sink to 13.10. Over the next five years, earnings are expected to grow by 11.06 percent yearly. That’s a good value and the price is fair in my view. The stock is down 1.5 percent last week.

The full stake cost me $1,434.20 in total and would bring me around $35 Bucks in dividend income, based on $1.72 estimated yearly dividends. Target operates in three segments: U.S. Retail, U.S. Credit Card and Canadian. As a component of the U.S. Retail Segment, its online presence is designed to enable guests to purchase products either online or by locating them in one of its stores with the aid of online research and location tools.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Passive Income Portfolio I (Click to enlarge)

Dividend Yield Passive Income Portfolio II (Click to enlarge)

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For readers who a 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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Target is the second biggest capital market listed company from the discount and variety store industry, behind Costco Wholesale. COST as a USD 5 Billion bigger market capitalization but sells more items for around USD 30 billion per year. Costco has a smaller margin; it offers larger discounts and has a 12.5 percent gross margin. Target’s gross margin is at 30.80.

Target is a real Dividend Champion. The company raised its dividend payments over a period of 46 consecutive years. Its dividend growth accelerated from 18.6 percent over the recent 10 years to 24.7 percent for the past 3 Years. The latest dividend hike was at 20% from 30 Cents to 36 Cents on August 13, 2012.

Earnings and Dividends of Target

As of the time of writing, the stockholdings from the portfolio gained 9.13% since the date of funding. It’s a small underperformance compared to the broad market and a result of the slow purchasing process. I buy only one company each week for around 1k to 2k. In markets that are going strongly up, the strategy will produce an underperformance. My aim is not to show how make fast profits by trading stocks. I like to create a sustainable long-term dividend growth portfolio. I plan to boost the current income to 3k or more by the end of the year. Over the next ten years, this value should double to 6k or more.

Portfolio Performance (Click to enlarge)

With still $40,022.60 in cash, it’s a solid basis for further stock acquisitions. I’m quite confident to realize my current goals.

Here is the income perspective of the portfolio

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	16.79	3.65		28.90	50	$64.50	$1,765.50
LMT	Lockheed Martin C	13.8	3.72		92.72	20	$89.00	$2,400.00
INTC	Intel Corporation	12.46	3.9		21.27	50	$45.00	$1,163.00
MCD	McDonald's Corpor	18.08	3.09		87.33	15	$45.15	$1,470.45
WU	Western Union Com	10.32	2.77		11.95	100	$47.50	$1,696.00
PM	Philip Morris Int	17.33	3.85		85.42	20	$68.78	$1,777.60
JNJ	Johnson & Johnson	20.55	2.69		69.19	20	$49.80	$1,856.60
MO	Altria Group Inc	16.62	4.9		33.48	40	$70.40	$1,436.00
SYY	Sysco Corporation	20.08	3.21		31.65	40	$44.40	$1,390.80
DRI	Darden Restaurant	15.44	4.24		46.66	30	$61.50	$1,467.90
CA	CA Inc.	14.36	3.36		21.86	50	$50.00	$1,484.00
PG	Procter & Gamble	18.02	2.9		68.72	25	$58.20	$2,009.75
KRFT	Kraft Foods Group	21.13	3.54		44.41	40	$80.00	$2,258.00
MAT	Mattel Inc.	19.03	3.16		36.45	40	$53.60	$1,710.80
PEP	Pepsico Inc. Com	21.92	2.55		70.88	20	$43.60	$1,706.20
KMB	Kimberly-Clark Co	21.42	3.15		86.82	15	$46.50	$1,475.85
COP	ConocoPhillips Co	10.67	4.06		61.06	20	$52.80	$1,314.40
GIS	General Mills In	18.43	2.66		42.13	30	$41.10	$1,545.30
UL	Unilever PLC Comm	20.68	3.11		39.65	35	$44.91	$1,419.95
NSRGY	NESTLE SA REG SHR	18.99	3.22		68.69	30	$65.31	$2,007.00
GE	General Electric	18.28	3.1		23.39	65	$48.10	$1,602.25
ADP	Automatic Data Pr	24.55	2.36		61.65	25	$42.50	$1,812.00
K	Kellogg Company C	26.31	2.63		61.52	25	$44.00	$1,674.50
KO	Coca-Cola Company	21.51	2.62		38.83	40	$42.80	$1,625.60
RTN	Raytheon Company	12.23	3.01		57.04	20	$42.00	$1,400.20
RCI	Rogers Communicat	11.74	4.13		51.06	50	$83.30	$2,015.00
GPC	Genuine Parts Com	18.45	2.52		77.06	20	$41.28	$1,642.00
TSCDY	TESCO PLC SPONS A	226.67	4.05		17.98	110	$75.68	$1,855.70
APD	Air Products and	19.19	2.52		85.71	15	$40.50	$1,561.80
GSK	GlaxoSmithKline P	18.95	4.52		52.16	30	$70.38	$1,545.00
WMT	Wal-Mart Stores	15.37	2.23		79.25	20	$34.72	$1,560.00
BTI	British American	16.77	3.9		114.6	23	$95.22	$2,443.29
CHL	China Mobile Limi	10.54	4.11		55.32	25	$54.95	$1,334.50
MMM	3M Company Common	18.38	2.1		110.27	15	$36.75	$1,753.65
TUP	Tupperware Brands	24.08	2.36		80.98	15	$29.40	$1,247.25
IBM	International Bus	14.01	1.77		206.35	8	$28.00	$1,578.80
HAS	Hasbro Inc.	18.68	3.14		44.09	30	$44.40	$1,412.40
T	AT&T Inc.	27.42	5.05		34.47	30	$53.70	$1,068.00
WAG	Walgreen Co. Comm	22.31	2.16		44.25	30	$33.00	$1,524.60
AFL	AFLAC Incorporate	9.55	2.28		59.39	20	$27.60	$1,221.80
TGT	Target Corporatio	16.88	2.01		71.46	20	$28.80	$1,429.20
							$2,119.13	$66,662.64
							Average Yield	3.18%
							Yield On Cost	3.46%