Added Three New Companies: BBL, CAT, NSRGY

There’s been a few companies that one of my favorite investing blog authors, Tim McAleenan Jr. of The Conservative Income Investor, recently wrote about.

One of his posts was talking about how cheap the diversified materials producer, BHP Billiton, had gotten. The price has declined from the low $70s in July to low $50s now. It still made just shy of $6 billion in net profits even during the 2009 earnings collapse. Because of the recent price drop, I was able to add 100 shares to my portfolio at a dividend yield of 4.73% (highest since 1999, when it reached 3.9%) at a price of $52.30/share. This purchase adds $248 to my annual dividend. It pays out biannually in March and September.

I purchased BBL, the ADR of BHP Billiton, which works out the best tax-wise for Americans. See “BHP vs BBL for Investors in the United States” for a good discussion on the differences between the Australian and British companies, respectively.

Another stock that Tim recently discussed was Nestle, which he described as The Only Must Own Stock Outside The United States. After some investigation, I decided to add it to my long-term portfolio. It is a Swiss company, which trades as an ADR under the ticker symbol NSRGY. Prior to the purchase of BHP Billiton, my only foreign-owned companies were BP and Unilever.

That’s not to say that I wasn’t internationally diversified. Most of my US owned companies are very global and may actually get the majority of their revenue from overseas. However, Nestle is a huge foodmaker with an excellent management team and may offer a higher long-term growth than its immediate US competitors.

I purchased 30 shares of NSRGY at $74.04/share and an initial dividend yield of 3.25%. This purchase adds $72.52 to my annual dividend. Unfortunately, unlike most US-based companies, it only pays annually in May.

My final purchase was of Caterpillar (ticker symbol CAT). As the economy continues to pick up steam and developing/ emerging countries begin to really build up there infrastructure, Caterpillar is one of those companies that will be there with their classic yellow equipment. John Deere (DE) was another cyclic industrial company that I’ve been eyeing for quite some time. I would like to purchase some DE as well, but decided to go with CAT for this recent purchase. I feel that both are undervalued. Also, while I don’t follow all of Schwab’s picks, CAT has been recently been rated as an ‘A’ by Schwab’s Equity Rating system.

I purchased 50 shares of CAT at $101.17/share and an initial dividend yield of 2.76%. This purchase adds $140 to my annual dividend.

These new three purchases add $460.52 to my forward 12-month dividends. My forward 12-month dividends are now $3,352.83 ($279.40/month). I am now invested in 26 companies.

Company Symbol Shares Price Yield Expected Annual Dividend
BHP Billiton BBL 100 $52.30 4.73% $248
Caterpillar CAT 50 $101.17 2.76% $140
Nestle NSRGY 30 $74.04 3.25% $72.52

Forward 12-Month Dividends: $3,352.83 (or $279.40/month).

Full disclosure: Long BBL, CAT, NSRGY

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8 Responses

  1. FerdiS says:

    Those are nice buys! I like BBL and CAT (of course), and Nestle chocolates! As far as NSRGY is concerned, I’m avoiding it for now as it pays dividends only once a year and is an OTC stock.

    Good luck with your investments and thanks for sharing!
    FerdiS recently posted…Recent Buy: HPMy Profile

  2. Scott,

    Great stuff! You put some serious capital to work, my friend. Over $450 in dividend income added all in one fell swoop. Awesome! 🙂

    I really like the buys here. I bought some BBL last month and I’m thinking of buying more next month, if it stays at these prices. Great value, and about as historically cheap as it gets.

    NSRGY will probably be the next consumer stock I started buying up after I’m done with Unilever (which I’m currently focusing on). Great company with a ton of diversification.

    Keep up the great work!

    Best wishes.
    Dividend Mantra recently posted…The Golden Age Of Financial IndependenceMy Profile

    • scott says:

      Thanks, DM! I just wish I had the money to do this purchase a few months ago. As it is I think I’ll end up about $60 short of my $2400 goal in dividends for 2014.

      Thanks for visiting and writing some great articles. I love the dividend investing community…what a great way to share investing ideas!

  3. Wowsers… talk about putting some capital to work… $12,500 roughly. Some serious scratch, and three great companies to add to the portfolio. As with FerdiS, I’m a bit hesitant with NSRGY due to the annual dividend. I’ll do the semi-annual (BBL), but annual is a tough pill to swallow. Makes me think of Disney…

    Either way, nice job boosting the dividend stream up an over the $3,000 mark. Next stop, $3,600 or a $300 per month average. Won’t be too much longer!
    writing2reality recently posted…Trades – Chevron Corporation (CVX) and Baxter International (BAX) PurchasesMy Profile

    • scott says:

      I agree. For both BBL and NSRGY I miss having the typical quarterly dividends that American companies pay. However, I feel that the quality of these companies and potential for growth make it worth it. It isn’t so much the fact that NSRGY is on the pink sheets that bothers me but rather the non-quarterly dividends. I guess I just like seeing the money in hand earlier so that it can compound as quickly as possible.

      $300/month would be really nice! I’ll be writing a 2015 goals post early in the new year and will likely set a goal somewhat above that mark.

      Thanks again for visiting!

  4. I don’t think you could go wrong with any of these companies. They are wonderful additions to a portfolio. I pulled the trigger today on BBL, as it seems to be one of the better valued buys for DGI. I only added a small position but will look to add in the coming weeks.
    Special Agent Dividend recently posted…Goal Completed and First Milestone – Dividend Growth InvestingMy Profile

    • scott says:

      Thanks, Special Agent Dividend. I’m not sure if you are a reader yet of http://theconservativeincomeinvestor.com, but Tim there has written some excellent articles recently about many of these companies that I bought. Great blog to start reading if you haven’t already.

      I think I will be holding off buying more of BBL for now but might think of purchasing another industrial company like UTX. It definitely gets addicting! Any chance of seeing your portfolio on your website? With investing at least a $1000 to month, it will be fun to see the account build quickly in value. You’ll reach the $1000 in forward 12-month dividends in no time!

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