Recent Buy // AMGN

Hi Friends – Long time, no speak!

This summer has been a busy one. Especially for Mr. Market. There have been so many swings caused from anything as small as a small comment made by a US Presidential candidate to something as big as one of Europe’s largest economies deciding to leave the EU (#brexit). So, to say it’s been hard to time the market, is putting things mildly. However, as I mentioned many times before, time in the market is much more important than timing the market; which means when I have the money in hand and I find a compelling buy, I should pull the trigger. Which is exactly how I came to own this next buy.

I purchased 8 shares of Amgen, Inc. (AMGN) on 6/16/2016 for $150.84 per share.

recent buy_amgen

Overview

Amgen, Inc. is the worlds largest independent biotechnology company that works in discovering, developing, manufacturing & delivering human therapeutics worldwide. Their principal products include Nuelesta/Neupogen which are used to prevent infections in patients undergoing cancer chemotherapy; Enbrel, used in the treatment of rheumatoid arthritis and other autoimmune diseases; and Epogen, used to treat anemia.

AMGN makes money by selling these medicines/treatments to treat diseases/life threatening illnesses. Since they hold patents to prevent other healthcare competitors from creating generic brand options, they not only have 100% market share but they also have a multi-year head start before competitors can come in and start developing their own versions of the medicines. Their customers are typically patients through pharmaceutical wholesale distributors, physicians (in clinics, dialysis centers, hospitals and pharmacies), and direct consumers.

Quantitative

  • Revenue grew by approximately 10% over the last 5 years.
  • EPS is 9.06 and has increased by 24.6% over the last 5 years.
  • Dividend yield at time of purchase was 2.65% and AMGN pays a dividend of $4 per share. AMGN has been increasing dividends for 6 years and the payout ratio is currently 35.6%.
  • Debt/Equity ratio: 1.04

Risks

As a biotechnology firm, Amgen is not without its risks. While they do hold multiyear patents that prevent other companies from competing in the same space, there are many other macro risks that affect Amgen; particularly in the US. Drug pricing issues, uncertainty about health care policies with the next US president and an overall lack of investor confidence in the industry present risks that one should be cognizant of when evaluating this company.

Valuation

  • The P/E at the time of purchase was 16.1 which is lower than AMGN 5 year average of 17.8.
  • Morningstar valuation (at time of purchase): $153, rated a 5 star “BUY”
  • S&P Capital IQ valuation (at time of purchase): $171.20, rated a 4 star “BUY”

Conclusion

Amgen overall is an attractively valued company. Fortunately/Unfortunately, there has been a run up in the stock price (price is $170.68 per share at the time this post was published). However, I do feel that this is a still a great entry price for someone to initiate a new position in this company. In the biotech industry, AMGN is regarded as a leader and is highly respected. With a good balance sheet, low dividend payout ratio and attractive entry price, I am happy with my latest purchase and will look for more opportunities to acquire more.

This purchase adds $32 to my annual dividend income based on the current $1.00 quarterly dividend.

Full disclosure: Long AMGN

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth.

 

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Recent Buy // SBUX

Hi friends! I’m back at it again with another purchase – but with a stock that I’ve already vetted and purchased before. This stock has seen a small pullback in price but this just means I have an opportunity to pick up more shares at a discount. When you’re just starting out in building an investment portfolio, dollar cost averaging is the best way to go.

That’s what I’ve done with SBUX.

I purchased 18 shares of Starbucks Corporation (SBUX) on 4/26/2016 for $57.62 per share.

investing in starbucks corporation

Valuation

  • The P/E ratio is currently 33.3. This is slightly higher than the industry average of 28.7 and much higher than the S&P 500 average of 19.1.
  • Morningstar valuation: $60, rated a 4 star “BUY”
  • S&P Capital IQ valuation: $46.40, rated a 4 star “BUY”

Conclusion

Starbucks Corporation remains an attractive company for me to continue to invest in. Back in November 2015, when I first initiated a position in this company, I believed the company to be financially sound. So when given the opportunity to pick up more shares at a cheaper price, I jumped at the opportunity. I think there is still some potential for another small pullback for SBUX in the short-term but I remain confident in their long-term growth.

This additional purchase of SBUX adds an additional $14.40 to my annual dividend income, based on the current $0.20 quarterly dividend.

Full Disclosure: Long SBUX

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth. 

Recent Buy // DIS

Let me preface this post by saying this- what a tumultuous beginning we’ve had in 2016! Investors were fearful for many reasons-including concerns over depressed oil prices and China’s lagging economy. But if you were one of the few people who wasn’t afraid and kept putting in money while others were pulling money out, you would likely be patting yourself on the back right now as you are reading this. Because you would know that the Dow and S&P500 are both up over 9% from the lows they hit in early February.

So while many were selling, I scooped up shares in a company that’s been on my watch list for a while; I purchased 12 shares of The Walt Disney Company (DIS) on 2/24/2016 for $93.41 per share.

disney, dividend investing

Overview

The Walt Disney Company, more commonly known as Disney, is a well diversified multinational mass media and entertainment conglomerate. Founded on October 16, 1923 by Walt Disney and Rodney O. Disney as the Disney Brothers Cartoon Studio, the company soon established itself as a leader in the American animation industry. It has since diversified into the live-action film production, theme parks and television.

DIS operates in five segments (% of company revenue): Media Networks (43%) includes cable networks such as ESPN, Disney channel, Freeform and ABC; Parks (31%) which includes Disney World and Disney Land resorts, Spa Vacation Clubs, and Cruise lines; Studio Entertainment (15%) which includes all of the various franchises like Marvel Entertainment and Pixar; Consumer Products (8%) which includes the licensing and franchising of iconic logos and images owned by The Walt Disney Company; and Interactive (3%) which oversees various websites and interactive media owned by The Walt Disney Company and it’s subsidiaries.

Since The Walt Disney Company is so well diversified, they make their money in a multitude of ways. A few examples include advertising/sponsorships on media networks and interactive segments, ticket sales at theme parks and studio entertainment, licensing fees, and the sale of consumer products. Disney also does a wonderful job of integrating segments so that consumers of one segment are encouraged to purchase from other segments.

Quantitative

I know I’ve stated this at least twice already but let me say it again; The Walt Disney Company is extremely well diversified. That’s one of the things that really makes me keep a company under serious consideration- knowing that one part of the company could falter but understanding that there are other segments that can pick up the slack and keep the revenue machine going. Also the low debt on the balance sheet lets me know that DIS is primed for good financial health in the future.

  • Revenue grew by approximately 5.66% over the last 5 years.
  • EPS is 4.95 and has increased by 19.3% over the last 5 years.
  • Dividend yield at time of purchase was 1.52% and DIS pays a dividend of $1.42 per share. DIS has been increasing dividends for 6 years and the payout ratio is currently 26.5%. This tells me there is still plenty of room for the dividend to grow at a healthy rate.
  • Debt/Equity ratio: 0.29

Risks

The biggest risk that all anyone seems to talk about these days is cable “cord cutters” and the loss of subscriber fees. While ESPN and other popular channels make up a large percentage of  the media networks segment revenue (and DIS overall revenue), the company is well diversified in other areas to make up for the potential loss of revenue from that segment. I also believe that just because people are cutting their cable subscriptions that it doesn’t mean they aren’t watching these programs; consumers are just using other resources (going online, using apps, etc.) to watch these programs so there is an opportunity for DIS to make changes and redirect consumers to platforms where they can charge them directly for these programs (like HBO has done with HBO GO).

Valuation

  • The P/E ratio at time of purchase was 17.8, which is lower than DIS’s 5 year average of 19.3.
  • Morningstar valuation: $134, rated a 4 star “BUY”
  • S&P Capital IQ valuation: $101, rated a 4 star “BUY”

Conclusion

The Walt Disney Company overall is an attractively valued high-quality stock. My hope is to continue adding to this position and let DIS serve as an anchor for my portfolio. They have a business model that is easy to understand, are well-respected as leaders in their industry, have a great balance sheet and have plenty of room to grow the dividend rate. Another clear winner, in my book!

This purchase adds $17.04 to my annual dividend income based on the current $0.71 semi-annual dividend.

Full Disclosure: Long DIS

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth.

Recent Buy // TROW

recent buy trow

Remember when I essentially said; “if it ain’t broke, don’t fix it” in November when I added to my position in Johnson & Johnson? Well, I really meant it. While there were many, many stocks on “sale” due to a horrible January, I decided to stick to what I knew- T.Rowe Price Inc.

In a market where many people are foregoing mutual funds and focusing on ETFs, TROW managed to still post excellent results in their latest quarterly earnings report. I already wrote on the merits of TROW back in September so I won’t bore you with repeated information.

I purchased 15 shares of T. Rowe Price Group Inc. (TROW) on 1/28/2016 for $68.69 per share.

Valuation

  • The P/E ratio is currently 15.1 which is slightly below it’s 5 yr average. In addition, TROW P/E is currently below the broader market.
  • S&P Capital IQ Valuation: $80.90

Conclusion

T. Rowe Price Group Inc. overall is an attractively valued high-quality stock, I think. They have a business model that is easy to understand, are well-respected as leaders in their industry, have a clean balance sheet and have plenty of room to grow the dividend rate. Again, a clear winner in my book!

This purchase adds $31.20 to my annual dividend income based on the current $0.52 quarterly dividend.

Full Disclosure: Long TROW

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth.

Recent Buy // JNJ

Building a portfolio utilizing a dividend investing is pretty easy; once you find a stock you like, all you have to do is keep adding fresh capital to it (assuming of course, the fundamentals of the company haven’t changed and you still believe in the product/service they sell). The one thing to watch is price. As long as the stock is trading near or below fair value, figuring out which stock to allocate your fresh capital to is really a no-brainer.

That’s what I’ve done with JNJ.

I purchased 10 shares of Johnson & Johnson (JNJ) on 11/13/15 for $99.98 per share.Recentbuy_JNJ

If you recall, my first ever buy was JNJ back in July. Since then, the fundamentals of the company have not changed dramatically. The latest earnings report headline reflected a sales decrease of 7.4% of year-over-year growth; however, this was largely due to the impact of foreign currency issues and masked an underlying sales growth of close to 1% in business revenue.

Valuation

  • The P/E ratio is currently 19.2 which is slightly above it’s 5 yr average. In addition, JNJ P/E is currently below the broader market.
  • S&P Capital IQ Valuation: $105.90

Conclusion

Again, it’s hard to go wrong with JNJ. I anticipate I will continue to add shares of this stock to my portfolio, as long as I see value. For this stock, anywhere under $100 (barring a substantial change to management or financials) seems like a fair price to pay. And since I am starting early and not really focused on strict asset allocation at this time (I will once my portfolio gets to the $50K range), I am OK with adding whenever I have the capital to support a purchase.

This additional purchase of JNJ adds an additional $30 to my annual dividend income, based on the current $0.75 quarterly dividend.

Full Disclosure: Long JNJ

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth. 

 

Recent Buy // SBUX

I have to be honest- I didn’t intend to stay away from the blog for this long. While I  thought the small market correction in August would continue, many stocks rebounded and finding quality stocks at a discount was much harder to do. However, I, like many other personal finance/dividend investing bloggers, believe that time in the market is much more important than timing the market for the absolute lowest price. While it is advantageous to buy at rock bottom prices, it’s much more important to invest in a company that you believe in, has the potential to grow and is, at least, fairly valued.

I purchased 15 shares of Starbucks Corporation (SBUX) on 10/30/2015 for $63.32 per share.

investing in starbucks corporation

Overview

Starbucks Corporation is a global roaster, marketer and retailer of specialty coffee operating over 21,000 stores in 65 countries. The stores offer coffee, tea beverages, packaged roasted whole bean & ground coffees, single serve products, juices, bottled water as well as food items like pastries, breakfast sandwiches and lunch items. If that weren’t enough, they also license the rights to production and distribute Starbucks branded products ( a partnership with another company in my portfolio, PepsiCo).

SBUX makes money by selling a discretionary product so their primary customers are people that have extra money to spend and may not necessarily be “value shoppers”. Their target includes coffee lovers, coffee snobs, or people who just want to quickly grab a food item; this includes people who are devoted coffee drinkers who are loyal to the taste of SBUX product OR people who want to be seen as “cool”.

Quantitative

Starbucks has really exploded in terms of growth. Since bringing back Howard Schultz as CEO, they’ve rapidly expanded domestically and internationally. They’ve also have grown their brand recognition, have built a robust social media presence and have led the way in terms of mobile payments and loyalty programs. They also are seen as leaders when it comes to civic duty and ensuring best treatment of part-time employees like offering 401(k) matching and tuition assistance.

  • Revenue grew by approximately 11.12% over the last 10 years.
  • EPS is 1.77 and has increased by 18% over the last 5 years.
  • Dividend yield at time of purchase was 1.26% and SBUX pays a dividend of $0.80 per share. SBUX has been increasing dividends for 5 years and the payout ration is currently 34.4%. This tells me there is still plenty of room for the dividend to grow at a healthy rate so I am not too concerned about the current low yield.
  • Debt/Equity ratio: 0.40

Risks

While Starbucks has been growing tremendously, this investment doesn’t come without risks. Even a coffee lover who just gets a cup of black coffee with no accoutrements looking to pay at least $3.00 per visit. That could add up to a $15-$20 weekly habit and if you were trying to save money, this may be one of the first areas you could potentially decrease spending. A reduction in consumer discretionary spending due to economic downturn could result unfavorably for SBUX.

Valuation

  • The P/E ratio is currently 35.2. This is slightly higher than the industry average of 33.2 and much higher than the S&P 500 average of 19.3.
  • Morningstar valuation: $60
  • S&P Capital IQ valuation: $53.90, rated a 4 star “BUY”

Conclusion

Starbucks Corporation overall is a company that is primed for more growth. While the current yield is low, the payout ratio is low and revenue has been steadily increasing. This means that the dividend has room to grow and I expect that this dividend growth will help cover future inflation. This is a good stock to own now for the currently sound fundamentals and later for the opportunity for expansive growth.

This purchase adds $12.00 to my annual dividend income based on the current $0.20 quarterly dividend.

Full disclosure: Long SBUX and PEP

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth.

Recent Buy // TROW

I continued to take advantage of the late August market correction when many stock prices took a plunge. Many of these stock prices fell, not because the fundamentals of the business had changed, but mostly because of people pulling out of the market due to concerns over China’s currency devaluation. However, as a long term investor, China’s currency valuation does not affect me; I will continue to deploy capital to strong stable businesses in order to collect dividends and generate wealth.

I purchased 15 shares of T. Rowe Price Group Inc. (TROW) on 9/9/2015 for $70.60 per share.

recent buy trow

Overview

T. Rowe Price Group Inc. is a publicly owned asset management company that provides services to individuals, institutional investors, retirement plans, financial intermediaries and institutions. They provide a broad array of mutual funds, sub-advisory services, and sophisticated investment planning and guidance.

TROW makes money by charging fees on managing portfolio’s that include stock, bond, blended asset and money market funds. They also make money through fees collected from retirement planning advice, their discount brokerage service and trust services.

Quantitative

T. Rowe Price Group Inc. sports some of the most impressive fundamentals I’ve seen. Revenue in fiscal year 2005 was $1.512 billion and increased to $3.982 billion in fiscal year 2014. Double-digit top-line growth of 11.36% is not something you come across often in well established companies like TROW!

  • Revenue grew by approximately 11.36% over the last 10 years.
  • EPS is 4.65 and has increased by 8.69% over the last 5 years.
  • Dividend yield at time of purchase was 2.95% and TROW pays a dividend of $2.08 per share. TROW has been increasing dividends for 29 years and the payout ration is currently 30.6%. This tells me there is still plenty of room for the dividend to grow at a healthy rate.
  • Debt/Equity ration: None! TROW currently has no long term debt on their balance sheet.

Risks

While TROW is one of the largest and most respected “no load” mutual funds and they cater to people who do not want to actively manage their own money, they do not currently offer low index funds for people who want to save on fees and manage their money. If TROW were to offer low fee index funds, this could potentially mean sacrificing profits from the mutual fund side of the business.

Valuation

  • The P/E ratio is currently 15.20, which is lower than TROW’s 5 year average of 21.70 and the S&P 500 18.4.
  • Morningstar valuation: $85
  • S&P Capital IQ valuation: $83.10, rated a 4 star “BUY”

Conclusion

T. Rowe Price Group Inc. overall is an attractively valued high-quality stock, I think. They have a business model that is easy to understand, are well respected as leaders in their industry, have a clean balance sheet and have plenty of room to grow the dividend rate. A clear winner, in my book!

This purchase adds $31.20 to my annual dividend income based on the the current $0.52 quarterly dividend.

Full Disclosure: Long TROW

Thanks for reading.

Images: Death to the Stock Photo with graphics added by One Woman’s Worth.