One of my favorite quotes from Warren Buffett deals with an issue that many dividend investors face from time to time. The quote is” If you like a stock at $50, you would love it at $30”
As usual this quote is jam-packed with a lot of insight. It makes perfect sense that a long-term investor should be excited to purchase ownership stakes in real businesses at cheaper valuations. If you have analyzed a company, and you like the business, and the economics of the business are not materially impaired, the investor should be excited that prices are lower. For us dividend growth investors, it is always better when we can obtain dividend income at a discount. Who doesn’t like getting more bang (dividend income) for their buck?
In the month of July, I managed to add to my stakes in the following companies listed below. I didn’t get to buy all companies I was eyeing at the beginning of the month, since unfortunately I only have a limited amount of capital to deploy each month. I also decided to take advantage of the declines in two transportation companies, which have been exhibiting weakness recently.
3M Company (MMM) operates as a diversified technology company worldwide. The company is a dividend king which has increased dividends for 57 years in row. The ten year dividend growth rate is 9%/annum. Currently, the stock is attractively valued at 18.90 times expected earnings and yields 2.70%. Check my analysis of 3M Company for more details.
Eaton Corporation plc (ETN) operates as a power management company worldwide. The company has increased dividends for 6 years in row. The ten year dividend growth rate is 13.80%/annum. Currently, the stock is attractively valued at 12.80 times expected earnings and yields 3.60%. Check my analysis of Eaton for more details.
United Technologies Corporation (UTX) provides technology products and services to building systems and aerospace industries worldwide. The company has increased dividends for 22 years in row. The ten year dividend growth rate is 12.90%/annum. Currently, the stock is attractively valued at 15.90 times expected earnings and yields 2.60%. Check my analysis of United Technologies for more details.
Exxon Mobil Corporation (XOM) explores for and produces crude oil and natural gas in the United States, Canada/South America, Europe, Africa, Asia, and Australia/Oceania. It is also involved in refining and transporting carbons throughout the world. The company is a dividend champion which has increased dividends for 33 years in row. The ten year dividend growth rate is %/annum. Currently, the stock is attractively valued at 17.90 times expected earnings and yields 3.70%. Check my analysis of Exxon Mobil for more details.
Union Pacific Corporation (UNP), through its subsidiary, Union Pacific Railroad Company, operates railroads in the United States. The company has increased dividends for 9 years in row. The ten year dividend growth rate is 19.70%/annum. Currently, the stock is attractively valued at 16.20 times expected earnings and yields 2.40%. Check my analysis of Union Pacific for more details.
Norfolk Southern Corporation (NSC), together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. The company has increased dividends for 14 years in row. The ten year dividend growth rate is 20%/annum. Currently, the stock is attractively valued at 15.10 times expected earnings and yields 2.90%. Check my analysis of Norfolk Southern for more details.
I am not trying to time tops or bottoms here. I simply believe that the steady accumulation of blue chip dividend paying stocks over time, should produce satisfactory results that will help me achieve my long-term goals of living off dividends someday. Building wealth takes time, persistence and perseverance. I measure my success by the rise in my forward annual dividend income. With each dividend investment I make, I can see my expected dividend income increase a little bit. Little by little, and step by step, I see how dividend income increases, taking me one step closer to the coveted dividend crossover point.
What companies did you purchase last month?
Full Disclosure: I have a position in all companies mentioned above
- Dividend Companies I am Considering this Month
- My dividend crossover point
- Dividend Kings List for 2015
- How to value dividend stocks
- The Value of Dividend Growth
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