Tuesday, October 7, 2014

Recent buy: IBM

In my monthly recap I mentioned I had enough funds to open a new position. I have used these funds to purchase 7 shares of IBM for $190 per share. This purchase adds 25 to my annual forward dividends which now stands at €750.

My reasoning for this purchase is as follows:

  • IBM currently yields 2.3% and has increased the dividend 13% per year in the last five years.
  • The payout ratio is extremely low (25%) which leaves ample room for future dividend increases.
  • P/E-ratio is low (<12).
  • IBM is buying their own common stock hand over fists. Especially at current prices, this provides a floor to the stock price and leaves me with a bigger piece of the profit pie.
  • IBM shifted from begin a low margin hardware company to a higher margin supplier of business solutions, software and IT consulting.
  • Big Data, Cloud and Mobile are important trends. IBM is a key player in this segment and should be able to profit from these developments.
  • IBM estimates to earn $20 in operating earnings per share in 2015. The company currently earns $15-16 per share. This results in $18 billion in net income in 2013!

It's my 2nd purchase in the technology sector after Intel. I think IBM will complement my portfolio very well as I consider it to a stable and big player during one of the major societal developments in the next decade.

What do you think of this purchase?

Saturday, October 4, 2014

Monthly update: September 2014

The month has passed and it's my favorite time, giving an update of my dividend portfolio. I've updated my benchmarks to include the total return indices, instead of only the stockprice indices. This seems like a better comparison.

IndicatorAs of 31-8As of 30-9% change
S&P 500 Total Return3.6453.545-2.7%
Dow Jones Industrials Total Return33.91033.417-1.5%
AEX GR1.2031.210+0.6%
Portfolio value€ 19.313 € 19.195 -0.6%