My market order to purchase 28 shares of LEG executed at market open today for the price of $36.04. 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.
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.
…Now that the Royal Dividends portfolio has received its first dividend, it makes sense to address what we should do with them. Whenever you receive dividends from your various stock holdings, you have three options:
All three options have merit. For instance, dividends are often a significant source of income for retirees. Retirees may use their dividend income to pay bills or buy groceries. However, for those in the saving phase of their lives, spending dividends is to be avoided. Reinvesting is best and oddly enough, the best way to reinvest involves doing nothing – at least initially.
Let me explain.
…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.
…I’m going to take advantage of the Labor Day Sale prices that materialized on Friday. Check this space later this weekend to find out which company it will be. I can tell you one thing, there is a 50% chance Tuesday morning’s purchase for the Portfolio for the Ages won’t be a Dividend King!
Today, the portfolio received $7.74 in cash, courtesy of the Black Hills Corporation [BKH]. Like a proud shopkeeper who frames the bill from his first sale, I feel like a post commemorating the event is in order.
There will be at least a couple of posts in the near future, about how to best reinvest dividends and the benefits of receiving dividends during bear markets and economic recessions.
Black Hills just paid its quarterly dividend of $0.595 per share for the fourth time. That means, we can expect their next quarterly dividend to be even more. I’m looking forward to it.
I am sure you’ve seen these in your local grocery store. It’s an Italian sweet bread. Quite often you’ll see towers of Panettone boxes during the holidays. In the states, I tend to see Bauducco brand panettone, either the mini boxes or the full-size boxes, in classic and chocolate chip flavors. In a few different grocery stores in Sicily, I recall seeing perhaps a dozen brands and an even greater variety of flavors. But they were only available around Christmas if memory serves me. In the states, I’m seeing a small offering year-round now.
Recently, a friend gave me a panettone because she had been given one by a person who didn’t know she avoids gluten. The 26.2 oz. Bauducco Classic Panettone. That’s your big boy.
And thus began my mission.
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