Portfolio Update: New Addition (KO and EMR; March 06, 2015)

by FI Fighter on March 6, 2015

in Stock Portfolio Updates

coca-cola-logo

I’m buying individual stocks again, and the last few moves I’ve made leaned towards being on the more aggressive side of things. Today, I decided to be a little more “boring” and focus my attention back on accumulating shares of high quality dividend growth companies again.

This morning, I put in an order for 100 shares of Coca-Cola (KO) at $41.95/share. KO is a staple and Core Holding in most everyone’s dividend portfolio. With a track record of 52 consecutive years of increasing dividend payouts, who can argue?

I realize that I didn’t purchase shares for pennies on the dollar… which is kind of difficult to do with these type of best-in-breed stocks. As a long-term buy and hold investor, I’m fine with paying retail for quality. The current dividend yield is above 3%, and even though I wouldn’t necessarily categorize KO as a growth stock, it will become one of my safer holdings. In times of uncertainty, it’ll be nice to have the extra peace of mind that comes with these low beta defensive investments.

Acquiring 100 shares of KO is just a start, and by no means do I consider my position filled. If better opportunities arise in the future, I’ll try and do my best to take advantage of it and add more shares.

In the grand scheme of things, I’m big on diversification, and adding a stock like KO helps balance out some of the volatility in my portfolio. Sure, I’ll swing for the fences on (many) occasions, but I do so with the mindset that I will also supplement the portfolio with more solid anchors, such as KO. KO goes ex-dividend on March 12, so I got in early enough to qualify for the next quarterly dividend payout. Can’t wait!

At $0.33/quarter, this purchase of KO will add $132 in annual passive income.

Moving on, since the market is a little beat up this week, I decided to make one additional move — I initiated a position with Emerson Electric (EMR) and bought 100 shares at $57.00/share.

EMR is another dividend stalwart, and has been increasing dividends over the last 58 years. This is another one of those stocks that will put my mind at ease when the going gets tough. The current dividend yield is robust at 3.30%, and the payout ratio is a modest 50%.

At $0.47/quarter, this purchase of EMR will add $188 in annual passive income.

The combined purchases today will add a total of $320 to my early FI portfolio.

These moves aren’t going to set the investment world on fire by any means… This time around, I’m just trying to hit some singles…

With these transactions out of the way, I’m off to take a look at the rehab work on Rental Property SH #3… Now, that project is definitely one where I’m attempting to swing for the fences!

 

Happy Friday! 🙂

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{ 9 comments… read them below or add one }

1 Roadmap2RetireNo Gravatar March 6, 2015 at 7:59 am

Way to go, FIFighter! Those are a couple of solid companies and that $320 in FY Dividends will serve you well.

Best wishes
R2R

Reply

2 FI FighterNo Gravatar March 7, 2015 at 9:01 am

R2R,

Thanks! It’ll be a good feeling to earn some fully passive income for a change 🙂

Cheers!

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3 writing2realityNo Gravatar March 6, 2015 at 9:14 am

We’ve overlapped a couple of times now in the past several weeks. I picked up both JNJ and EMR last month, so good to see that we’re on the same page with the value in those two.

KO is indeed a core hold, and one I’m glad to have in my portfolio. Thanks for sharing your recent purchases!

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4 FI FighterNo Gravatar March 7, 2015 at 9:02 am

writing2reality,

Yup, and I use your blog and others to pick up new ideas 😉

I consider JNJ and KO to be Core Holdings. EMR looked pretty cheap to me at these levels, so I decided to fill that position. I would like to own even more shares of JNJ and KO… Just gotta stick to the plan!

Best wishes!

Reply

5 MarkNo Gravatar March 6, 2015 at 9:20 am

KO – neutral. EMR- underweight.

There are better picks out there and these will be flat/to the downside vs the overall market. They are both driven by foreign sales and with the strong dollar ur in trouble. Heed the warning. Not everything that has been declining is an opportunity. Falling knives.

WMT for the win. It’s on sale but sale ends soon.

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6 FI FighterNo Gravatar March 7, 2015 at 9:06 am

Mark,

A lot of it depends on timeframe… I can’t say I’ll never sell these stocks (I would in an instant if a better real estate opportunity presented itself, for example), but my mentality with buying stocks going into it has always been to buy and hold.

Long term, I’m not worried about KO and EMR… I’ll gladly accept a “low” 3% annual dividend for some peace of mind.

I invest heavily into growth as well… These transactions help bring balance to my portfolio.

Good luck on WMT! I hope it does really well for you.

Take care!

Reply

7 SpencerNo Gravatar March 7, 2015 at 9:12 pm

KO will provide decent return (8-10%), not big on EMR (see subpar financial performance since ’08 using Growth under Key Ratios; http://financials.morningstar.com/ratios/r.html?t=emr&region=usa&culture=en-US).

WMT in a similar position as EMR (while their e-commerce is growing, it only accounts for ~2% of total revenue).

I prefer wide-moat companies with consistent revenue / EPS growth of 10%+ (see V, MA, AAPL, MSFT, GOOG, NKE, BRK). Granted valuations are rich now, but if you can wait…

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8 TawcanNo Gravatar March 6, 2015 at 3:17 pm

Interesting picks on KO and EMR. I’m with Mark too and I think there are other better dividend paying stocks to buy right now than KO and EMR. Having said that both KO and EMR do have very solid dividend history.

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9 FI FighterNo Gravatar March 7, 2015 at 9:08 am

Tawcan,

You’re probably right and there are perhaps better deals out there at this time… I paid a premium for KO, you could argue, and EMR could have further down to go…

With that said, I wanted some peace of mind and feel like I’ll get that with these two holdings.

Take care!

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