Blue Chip Dividend History

Dividend history and growth information for your favorite blue chip stocks!

Johnson and Johnson – JNJ

Coca Cola – KO

Hershey – HSY

Tiffany & Co – TIF

Royal Dutch Shell – RDS

Philip Morris International – PM

Exxon Mobil – XOM

Proctor & Gamble – PG

Nestle – NSRGY

Diageo – DEO

General Electric – GE

Another Puff Of Philip Morris

PM Logo

PMI Logo

As the market continues its emerging market driven rout, a lot of great blue chip companies are seeing significant drops in price.  This is resulting in more of my limit orders being triggered.

When I checked the markets today Philip Morris was trading below 79 dollars, well below my $80.01 limit price.  My order was fulfilled at exactly $80 per share , resulting in a purchase of 32 additional PM shares at a cost basis of $2560.  This latest addition to my holding has a beginning dividend yield of 4.7%.

Philip Morris is now my largest individual equity position – ignoring my 401(k) index funds, which I don’t discuss on this blog.  I have a total of 92 shares with a current valuation of over $7,300.  This will result in an annual dividend payout of $345 into my Traditional IRA account.  Dividend Growth Investor has a great article on some of the merits of PM.

I still do have some uncommitted cash in that account, so could potentially buy more if the price continues to drop.  History shows that price drops in tobacco stops are just a chance to buy cheap and make even bigger returns in the future, and I am confident that this approach will hold true – however, I am not certain!  Given that I will try (and maybe even succeed) to resist the cravings to build this position further for now. Although, only 8 more shares would round my position to an even 100…

Hopefully if the markets continue to tank some of the other securities I’m pursuing will come into buying.  I have an order to add more KO at a limit of $36.77, compared to the closing price today of $37.90.  It does not seem inconceivable that this could trigger in the next couple of days if Mr Market continues with his present sour mood. I also hope to add some more Exxon-Mobil or Nestle if their prices dip down far enough.


More Coke? Yes Please

KO Logo

KO Logo

After much contemplation I decided today to increase my holding of Coke.  I’ve read a lot of articles and analyst research and have convinced myself that it is one of the few bluechip companies that are trading at a fair price.

Barring a significant rise in price in the near term, I anticipate making several such KO purchases when my supply of capital allow.  I am slowly converging on a list of core equities that I would like to build a large position in – KO, PM, XOM and NSRGY.  In the event of a significant market correction I will be scrambling to buy as much of these as I can!

One major factor for me in focusing in on Coca-Cola was a recent WealthTrack interview with Don Yacktman, who is very bullish on KO.  His funds have performed exceptionally well over the last 10 years, so his thoughts held a lot of weight with me.

With dividend reinvestment in place I’m hoping I will see a long term return in the neighborhood of 10 to 11 percent annually.  7% to 8% through earnings growth, plus the 3% from the reinvested dividend.  With Cokes ability to sell a few cents of syrup for a dollar or so a serving, and the strength of their brand around the world, I consider their moat and their profitability to be a relatively safe bet.

My original position from earlier in 2013 was 64 shares. Since then dividend reinvestment has boosted my hold to 65+ shares.  Taking advantage of todays price dip I purchased another 64 shares for $2510.08 at $39.24 a piece.

The Coca Cola holdings in my portfolio now total 129.112 shares with a new cost basis of $5082.54.  The yield is floating somewhere between 2.8% and 2.9%, so my annual KO dividend has now increased to roughly $145.

The Danger of Fear and Panic During a Stock Market Crash

One story I hear again and again about investing in equities, is how easy it is to lose a lot of money. While this is true to a certain extent, there are ways to mitigate these risks.

In the late 1990’s many investors got caught up in highly speculative tech stocks, when high prices of many issues were unsupported by their profit levels – or in many cases unsupported by any profits at all. With the benefit of hindsight, it is obvious that this bubble had to eventually burst.  Engaging in this kind of speculative investing in hopes of rapid short term gains is somewhat of a gamble, and a very easy way to squander a lot of capital.

Investing in the latest ‘sure thing’ may pay for a while, but eventually you are going to get burned.  For those willing to settle for slower but surer returns, purchasing positions in solid companies with a long track record – and preferably a wide moat protecting their business – at a fair or discounted value is a lot more likely to provide satisfactory results.

Of course, even prudent investors can find the value of their holdings go down considerably at times. During the financial crisis the S&P 500 dropped from a high of over 1500+ in late 2008, down to less than 700+ in 2009. While some companies – especially those financial firms dependent on leverage and mortgage based securities – suffered dramatic falls in share price for good reason, other non-financial firms also fell drastically.

Stalwarts such as Coca Cola – little impacted by troubles in the financial sector – traded as much as 25% lower in the depths of the financial crisis bear market than it did beforehand.  Did the intrinsic value of KO really decrease that much?  I don’t think so.  Earnings continued to grow, dividend were still paid out – and continued to increase annually.

During this time many 401(k) investors – seeing their balances decline by so much – sold all of the equity positions in their retirement accounts.  Now that the markets have fully recovered and now exceeded their former 2008 highs, these people have missed the opportunity for huge gains and will suffer in retirement accordingly.

For investors who have purchased shares in a quality blue chip company – KO is only one example, others are JNJ, PG, NSRGY, MCD – at a reasonable price, a stock market crash is not a time to panic and sell.  These firms are – barring catastrophe – not going away.  They sell products that people will continue to buy in good times and bad.

If the economy is down for some reason – recession, war, famine – the market as a whole might punish these firms out of fear they will not perform as well in the near team.  However, looking out into the future we can see from history these basic, somewhat boring firms, will continue to prosper and thrive when times improve.  In fact, with proper management, the down times can provide a quality firm the change to take market share from less sound competitors.

Rather than panicking and selling when your investment in Johnson and Johnson drops 20% due to some temporary bad news, stop and consider what is happening.  Is there some specific event that will truly impair the long term prospects of this particular company?  If not, take advantage of those panic driven sellers pushing down the price and increase your holding.

Don’t let fear and panic mess with your mind in the next stock market crash.  Hold the positions you have in quality companies and look for bargains to deploy any available cash you have.  If you can pick up ‘best of the best’ firms at a P/E of 15 of less – particularly during temporary periods of depressed earnings – then you have excellent odds of great returns when the psychology of the markets turns bullish once more.

TD Ameritrade New Client Offers

I like to keep an eye out for deals on new brokerage accounts, as sometimes brokerage firms will offer various rewards to tempt potential clients to move their business to them.

TD Ameritrade orients many of their new account bonuses towards free trades.  This offer, for example, offers up to 300 free equity trades for the first 90 days.  Now for me, that isn’t particularly useful.  I rarely perform more than 3 or 4 trades a month – even though I’m not currently charged for them at my existing brokerage!

However, perhaps if you are a day trader I see perhaps 300 trades could be a big deal.  It is worth noting that the normal equity trade fee for TDAmeritrade is $9.99 – which is a little pricey – so long term this could be a factor.

More interesting than the free trades to me is the cash signup bonus they offer.  You can earn anywhere between $100 and $1000 dollars – depending on how much you deposit.

One downside is that you are required to keep the account open for 9 months.  This is a common sense limitation on the bonus, as I suspect some folks open accounts to get these bonuses and then move on.  If you don’t mind using their services for your investing purposes it is easy money however.

Unfortunately for me, I don’t have $250000 in funds kicking around to take advantage of the $1000 dollar offer.  But if you have say $25000 available to transfer, then the free $100 – in combination with the free trades – might be worth investigating.

Speaking solely for myself, the incentives offered do not make sense for me to move my business to this brokerage.


Purchased More Philip Morris

PM Logo

PMI Logo

A week or so ago I decided that if the price dropped sufficiently to get me a 4.5% dividend yield I was going to double my Philip Morris position.  Given the high yield on PM I have determined I would prefer to have it in an IRA account rather than a regular brokerage, so I set my limit order accordingly for my traditional IRA at $83.57.

Today, in a general downswing of the markets, PM dropped far enough that my order triggered.  I have thus added 30 shares of Philip Morris to my IRA account.

Purchase of 30 shares of PM at $83.57, for a cost basis of 2,507.10. Dividend yield at time of purchase is 4.50%. Dividend Reinvestment enabled. Initial dividend income $112.8 annually.

The action doesn’t end here however!  I also dumped the PM I had in my brokerage – 28+ shares – for $2325.64. I then purchased another 30 shares (I like buying in $2500 chunks) in the IRA.  I did have to cancel a limit order I had set for DPS to free up tentatively committed funds, but I really do like PM at this price.  Thus…

Purchase of 30 shares of PM at $83.06, for a cost basis of 2,491.80. Dividend yield at time of purchase is 4.53%. Dividend Reinvestment enabled. Initial dividend income $112.8 annually.

I am pretty confident that PM will be a solid investment in the long term.  For now I think it is suffering mainly from the strong US dollar which is really casting earnings in an unflattering light.  Eventually there will be a earnings headwind versus a tailwind for Philip Morris, and I fully expect to benefit from that at some point in the future.

In summary, my entire Philip Morris investment is now in an IRA account.   This means I can reinvest the dividends without owing the IRA a cut until withdrawal.  At a yield of 4.5 percent every bit of relief helps!

Position is now 60 shares of PM at an average price of $83.32, cost basis of 4,998,90. Dividend income as of today $225.6 annually.


December 2013 Dividend Earnings

My December 2013 dividend earnings are in. It has been a busy month!

HoldingDividend/Shr# SharesDividend TotalReinvestedNew SharesAccount
XOM$0.6330.215$19.04YES0.202ROTH IRA
INTC$0.225106.058$23.86YES1.010ROTH IRA
ADM$0.1975.395$14.33YES0.352ROTH IRA
MCD$0.8127$21.87YES0.2295Trad IRA
IBM$0.9514$13.31YES0.0752Trad IRA
CSX$0.15100.5681$15.09YES0.5413Trad IRA

I got my first full dividend for MCD, after the piecemeal purchases I made earlier this year. My Shell investment returned one last ‘funny’ dividend – I received $34.20 in cash, but immediately has $5.13 clawed back as a foreign dividend tax.  Hopefully this should be resolved next quarter now that my RDSA has been liquidated from my brokerage account and I have purchased RDSB in my Traditional IRA.

$159 of dividend income is not too bad.  Unfortunately January and February will not be as lucrative, my dividend paying investments in those months are rather sparse at this time.


Shell Games – RDSA Swapped for RDSB in IRA

RDS Logo

Shell Logo

I have spent some time thinking about how best to handle the Shell dividend issue I recently experienced.  As discussed earlier my RDSA dividends are subject to Foreign Dividend Tax, which is potentially a bit of a hassle for me to deal with.  Rather than cope with this I have learned that due to their setup RDSB are not subject to dividend withholding.

The RDS.A shares are not a good choice for an IRA account, as the foreign taxes cannot be reclaimed from the IRS.  The RDS.B shares, however, without this tax to deal with are a great choice for an IRA investment. See this article for a great discussion on the background of the two types of Shell shares and the benefits of investing in each using different vehicles.

Apart from the foreign tax issues, another item of import is that Shell pays a very generous dividend, currently yielding over 5 percent.  Given the choice of a Taxable or an IRA account for my various holdings, it seems logical – all other things being equal – to locate the higher yielding holdings in a sheltered account.  I’d rather pay tax on the dividend from a stock yielding 3% than one yielding 5%.

Based on both the foreign tax and dividend income tax considerations, I have decided to do a straight swap of my RDSA in my taxable brokerage account for RDSB in my Traditional IRA.  Today I sold my 38 shares of RDSA at $67.51 (2,565.34) and purchased 38 shares of RDSB at $70.81 ($2,689.07) – the two issues do not sell at identical prices.

The sale means I have a gain of roughly $1.50 from my initial purchase back in May.  This is probably going to prove taxable as short term capital gains, but I think any tax hit will be tolerable:)

Now this sale is completed I have a nice chunk of cash sitting uncommitted in my regular taxable brokerage account.  I have an urge to purchase some more Nestle, so I have placed a GTC limit order for another 36 shares of NSRGY at $70. It is hovering around $72 per share right now, but hopefully I’ll get lucky and have the opportunity to purchase on a future dip.


November 2013 Dividend Earnings

Two dividend payouts came my way in November.  Clorox distributed the first payout since I established that position, so that this quarter I didn’t just have one position.  Feels good to not just have one entry in my table this month!

HoldingDividend/Shr# SharesDividend TotalReinvestedNew SharesAccount
CLX$0.7130$21.3YES0.2271Trad IRA
DE$0.5130.184$15.39YES0.186ROTH IRA

Income of $39 was a substantial improvement on my August figure of $15.



Portfolio Holding Pattern – Status as of November 2013

One reason I have made no new purchases of dividend stocks for my portfolio recently due to some unexpected expenses.  Between a brand new Air Conditioner and Furnace for my home, and catching up on some significant maintenance and repair work on my old Lexus, I had to payout roughly $10000.

Both these expenses were originally charged to my American Express Fidelity rewards card (that offers 2% cash back to my Fidelity brokerage account on all purchases).  This gave me in effect $200 towards future investments once I start making purchases again.

As for the $10000, I did a no fee balance transfer to my existing Pentagon Federal Credit Union card which periodically offers 4.9% for the life of balance.  As a compromise to avoid having the high balance on the card impact my credit I am in the process of paying $4000 of that additional debt, the other $6000 will remain on the card for now and be paid off slowly over time while incurring minimal interest expense.

I’m looking forward to redirecting my free cash flow to dividend yielding investments again next month, when I have completed paying off the 4000 dollars I mention.

As of today I have only funded my Fidelity ROTH for 2013 for $4500 (rather than $5500) as I’m not clear yet if my income will allow me to make the full contribution.  For now additional funding is funneled to my Taxable Brokerage account at Merrill Lynch.  Once I have completed my taxes early in 2014 I will determine if I can add the extra $1000 – or at least part of it – to my ROTH using the appropriate IRS worksheets.

Regardless of what the forms say, I will commence my 2014 ROTH contribution in January – adding at least a few thousand dollars to start with.  Overall this means that my Merrill Brokerage account will get any future contributions I make until December 31st, at which point activity will switch to Fidelity.

There is also a second reason for my lack of purchases of late.  My old Traditional IRA account still has a significant amount of cash equivalents that have yet to be deployed into dividend paying investments, I currently have GTC limit orders that would make use of a large chunk of this money if only prices of the targeted shares would drop low enough.

I have orders for roughly $2500 – my standard full position – of General Mills (GIS) at $40, Doctor Pepper Snapple (DPS) at $39.60, Proctor and Gamble (PG) at $66.35 and BP at $39.49.  While BP was getting close to triggering at one point, with the recent surge in the markets I don’t think any of these orders will fill anytime soon.

I guess this is the curse of the dividend investor purchasing for the long term.  When the market is bullish the stocks you want get too pricey!  For now I’ll keep renewing these orders (they are GTC but only for 30 days at a time).