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.
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Forward 12-Month Dividends: $3,352.83 (or $279.40/month).
Full disclosure: Long BBL, CAT, NSRGY