Dividend Income Update // December 2016

dividend income

December Dividends

  • Starbucks Corporation (SBUX) – $8.25
  • Johnson & Johnson (JNJ) – $16.00
  • Amgen, Inc. (AMGN) – $8.00
  • T. Rowe Price (TROW) – $16.20

Total dividends received for month of December: $48.45

That’s a 105% increase over December 2015! I am super thrilled to know that, month by month, I am earning income that I don’t even have to work for; it gets deposited into my account whether I ask for it or not.

Unfortunately, due to Pepsi’s weird payout schedule, I technically will not meet my 2016 dividend income goal. However, receiving almost $220 isn’t bad! I more than doubled the amount of dividends I received this year over last year and for that I am extremely proud.

Thanks for reading.

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

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Dividend Income Update // September 2016

dividendincome_sept2016

September Dividends

  • Johnson & Johnson (JNJ) – $16.00
  • Amgen, Inc. (AMGN) – $8.00
  • Pepsi Co, Inc. (PEP) – $7.53
  • T. Rowe Price (TROW) – $16.20

Total dividends received for month of September: $47.73

Wow, that’s a 114% increase over September 2015! I spoke last month about my disappointment in not posting a YOY increase due to a dividend cut from KMI. However, I think I more than made up for it this month when I more than doubled my dividend income! This was accomplished through increasing the number of shares I own and through dividend increases from Johnson & Johnson, PepsiCo., and T. Rowe Price. While I am happy to have added a new position in Amgen, Inc. I’m really more so excited by the fact that JNJ and PEP decided to return $0.05 more per share and TROW, $0.02 per share to me. All I had to do was continue to hold my shares…it’s like getting a raise for doing absolutely nothing!

At nearly $50, this is my highest paid out month to-date and I’m really excited to see what the future hold for me and my freedom fund. Stay tuned for more updates on my dividend income, as well as, updates on progress on my portfolio value.

Thanks for reading.

Images: Upsplash with graphics added by One Woman’s Worth.

Recent Buy // PEP

Just when you thought August was going to slowly fade out…BAM! Mr. Market decides to correct itself and many stocks that were overvalued were reduced to fair value. But the stocks that were already undervalued became an absolute steal. I didn’t plan on making another purchase until the first or second of week of September; However, I don’t know about you but, when the market gives you a discount, you take it!

I purchased 10 shares of Pepsico, Inc. (PEP) on 8/25/15 for $92.58 per share.

recentbuy_pep

Overview

PepsiCo Inc. is a worldwide food and beverage company. Started in 1898 when Caleb Bradham, a pharmacist and industrialist from North Carolina, created the recipe for the syrup soft drink, they’ve since merged and acquired brands in the food/snack space. In their Frito-Lay North America segment, they own the Lays, Doritos, Cheetos, Ruffles, Tostitos, Fritos, and Santitas branded chips. The Quaker Foods North America segment sells Quaker oatmeal, grits, rice cakes, oat squares, natural granola, Aunt Jemima mixes and syrups, Quaker chewy granola bars,  Cap N Crunch and Life cereals, and Rice-A-Roni side dishes. Both segments also operate in Europe, Asia, Middle East and Africa.

PEP’s beverage reach is just as powerful, if not more. With well-recognized brands like Pepsi, Diet Pepsi, Mountain Dew, Diet Mountain Dew, Gatorade, Aquafina, 7UP, Tropicana Pure Premium, and Sierra Mist it’s pretty hard to walk into a store in any part of the world not find a PepsiCo beverage product. That sort of ubiquity makes this stock very attractive.

Quantitative

  • Revenue has grown by an average of 4.11% over the last 10 years.
  • EPS is 4.33 and has increased by an average of 8% over the last 10 years.
  • Current dividend yield is 3.04% and pays a dividend of $2.81 per share. PEP has been increasing dividends for 42 years and the payout ratio is currently 60.6%.
  • Debt/Equity ratio is currently at 1.42.

Valuation

  • The P/E ratio is currently 20.70 which, while slightly above its 5 yr average, is reasonable.
  • I did pay a bit of a premium. Based on the Dividend Discount Model, I should have waited to purchase at a price closer to $89. However, due to Mr.Market rebounding pretty quickly, I decided to take the plunge anyway and put my capital to work.
  • Morningstar Valuation: $97
  • S&P Capital IQ Valuation: $80

Conclusion

There are risks associated with PEP. As consumers become more and more health conscious, companies like Pepsico, Coca-Cola, McDonald’s, etc. need to innovate and not rely so heavily on their non-healthy products. PepsiCo has been accomplishing this by selling bottled waters, teas and juices. They also have diversity in the food segment with healthier options like rice cakes, oatmeal and chewy granola bars. The brand recognition coupled with the diverse products in pretty much any country in the world means this company deserves a core spot in my dividend portfolio.

This purchase adds $28.10 to my annual dividend based on the current $0.70 quarterly dividend.

Full disclosure: Long PEP

What do you think of PEP? Think there’s more opportunities for growth in this mammoth company?

Thanks for reading.

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