The Consumer Discretionary sector has returned -23.24% this year. That is the third worst behind Information Technology (-26.31%) and Communication Services (-34.18%). I’ve avoided selecting a King from this sector for weeks because discretionary businesses typically do not thrive in recessions. But it’s time to dip our toes in the water. And we want a company that is steady and resilient. I found one.
Come Monday morning, Leggett & Platt Inc [LEG] joins the Portfolio for the Ages.
My market order to purchase 8 shares of MMM executed at market open today for the price of $124.75. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
When I see a juggernaut of a company barely above their pre-pandemic lows, I take notice. When I see a 10% drop in a single day on news that is not timed with an earnings announcement, I take notice. The market loves to overreact – in both directions. Sometimes the overreaction is such that it makes sense to take action.
Formerly known as the Minnesota Mining and Manufacturing Company, 3M Company [MMM] joins the portfolio this Monday.
My market order to purchase 8 shares of QCOM executed at market open today for the price of $128.84. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
QCOM is not a Dividend King. However, it is a Royal Heir, and it has just been elected to the Portfolio for the Ages. This makes it an Elected Monarch. The 25 Royal Heirs were added to the Empire to ensure each of the eleven sectors have at least five stocks to invest in. The Royal Heirs have the longest dividend increase streaks (under 50 years) in their respective sectors.
Before market open on Monday, August 22, 2022, Computer Services Inc [CSVI] announced that it entered into a definitive agreement to be acquired by a couple of private investment firms, Centerbridge Partners, L.P. and Bridgeport Partners. The merger is expected to complete in the fourth quarter of this year and shareholders will receive $58.00 per share of CSVI. CSVI is the only Dividend King representing the Information Technology sector. I won’t lie, CSVI was a serious consideration as to why I thought building out this Portfolio for the Ages consisting of Dividend Kings was possible. In June, the market was significantly down for the year, and there were several Dividend Kings that were underpriced. CSVI was one of them, as evidenced by the acquisition price of $58.00 being 53% higher than the previous closing price of $37.88.
I chose not to launch the portfolio with an immediate acquisition of 10-12 stocks. Instead, I advocated a one stock per week approach because one never knows how the market will behave. Of course, the market reversed and for the first six weeks of the second half of the year, the portfolio snagged Kings as they were rising in price but not before they hit their estimated fair values. CSVI had actually drifted slightly lower. The rest is history. I missed the opportunity. And not just this time, but quite possibly forever. Not only are they priced just shy of their merger-defined fair value of $58.001, when the merger completes, CSVI will cease being publicly traded and a Dividend King will be lost forever.
I’ve spent the following days searching for a suitable replacement from the Information Technology sector.
That search is over. Tuesday morning, Qualcomm Inc [QCOM] joins the portfolio.
My market order to purchase 22 shares of MO executed at market open today for the price of $45.81. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
This week’s pick is one of twelve Dividend Kings from the Consumer Staples sector. But of those twelve, only one other is trading below fair value and that’s Target [TGT]. As much as I love Target, especially at their current price, I am going with one that pays a massive 8.2% yield, highest amongst all Dividend Kings. In fact, on August 25, 2022, they announced their 57th dividend increase in the last 53 years. We want to remain defensive in this market, and this stock’s earnings were unphased in our last two recessions, climbing steadily year after year.
Monday morning, Altria Group Inc [MO] joins the Dividend King portfolio.
My market order to purchase 14 shares of NFG executed at market open today for the price of $73.24. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
Do you remember what you were doing on June 15, 2022? We should all remember. On that day, a company from Williamsville, New York, founded in 1902, announced an increase to their dividend. They have paid a dividend for 120 consecutive years and this increase is the 52nd consecutive annual increase in the dividend. Think about that. When they began paying a dividend, the U.S. was still minting the Indian Head penny.
This week’s Dividend King operates in four business segments, one of which is Utilities. I think this might be why they’ve been misclassified as a Utility stock on TD Ameritrade. Yahoo! Finance has them correctly labeled as an Energy company. Energy companies are notorious for inconsistent earnings, because their performance is sensitive to a host of economic factors that are out of their control. It very likely explains why there is only one Energy company in the list of Dividend Kings. Only one.
Monday morning, National Fuel Gas Company [NFG] joins the Dividend King portfolio.
My market order to purchase 7 shares of PPG executed at market open today for the price of $135.22. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
