Lanny’s Recent Purchase – EMR

It’s the middle of the month and well, you know the Dividend Diplomats have a tough time sitting on the side lines during market movements!  Given that the market has been on a rollercoaster ride lately, and mostly down over the last few weeks, it was time to add more income for less and take advantage of a discounted aristocrat of a company I already owned.  I was excited to round the position out even further, and thought – I think the future me will be happy for it.  Let’s take a look at the recent add to my current position of Emerson Electric (EMR):

EMR Logo

Recent Purchase – Emerson Electric (EMR)

Back in the saddle and re-upped my position in Emerson Electric!  I believe everyone last time remembered me purchasing them, which surprisingly was at $49.66, talk about following my rule and scooping up more income for less, even after I performed my analysis on Procter & Gamble (PG).  We all know Bert loves this company, I can’t blame him, but it is, in fact, one of his 5 stocks that he feels you can always buy.  This was definitely an example of me taking advantage of the reasons being a dividend investor has benefits during this downturn -hitting essentially all 5.  Let’s see the latest stats!    

1.) Dividend Yield of approximately 4.08%, which is well above the S&P 500 of around 2.11% and also beats their 5 year average of 3.1% by almost 100 basis points.  Just wild, obviously, yielding much higher than my first purchase (previously at 3.78%)

2.) Dividend Growth – I love this metric and their dividend growth is essentially 7% over a 5 year span, something that is phenomenal, especially coupled with an above average dividend yield.  This adds quite an impact to my forward dividend growth rate for my portfolio as a whole.

3.) The P/E ratio, based on projected (updated) EPS of $3.24 was 14.20, or below the 15 that I really like to see, well below the market as a whole and is attractive amongst their competitors; and given the stock price dropped $3.00+ since last purchase, P/E was lower as well.

4.) This leads to a payout ratio of approximately 58%, below the 60% threshold we traditionally like, but above the 20% we look for, little bit of room to still grow, but could be at a slower rate.

5.) Further, I like to re-up on my position if the stock drops by 5%+ since the last time I have bought them, given no dramatic things have changed.  With the price going from $49.66 to the price I recently paid of $46.005; that was a 7.36% decline, aka, time to move back in, eh?!

EMR Stock Purchase Summary

After buying more Johnson & Johnson (JNJ) earlier this month, I am hoping this purchase allows me to continue Crushing over $6,000 in projected dividend income.  I can only thank Mr. Market for taking a turn on a stock I wanted to continue and build my position in.  I deployed a total capital amount of $1,154 (including fees) buying 25 shares of EMR and added a cool/flat $47 to my forward looking dividend income.  With the power of dividend reinvestment – the total dividend I receive now from my position of EMR should reinvest at a minimum of close to 3 shares per year, given that the dividend stays, at a minimum, stagnant and that I now own over 65 shares producing over $120 in annual income alone from EMR – thank you guys!  Adding $47.00 to my annual goal breaks down to an extra, approximately, $4.00 per month that I will start to see the benefits of this specific purchase until the 4th quarter dividend (December).  As I said earlier, this purchase also allows me to reach closer and closer to my goals for 2015.

I now own roughly $3,154 (cost basis) and as a dividend aristocrat stock, excited about this round position I have.  Excited that I am seeing triple figures going forward in income from this beautiful company.   Did anyone else pull the trigger?  Making moves on the random up-day or staying on the sidelines watching the movement happen?  What are you looking at?  Thank you!

-Lanny

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11 thoughts on “Lanny’s Recent Purchase – EMR

  1. Hi Lanny,

    Great purchase! I’m also looking at EMR for my next purchase. I’ve been hesitating between them and ETN. I think both are at a great price here. I’m not sure about ETN because I’m being charged some fees everytime I receive a dividend from the ADRs I currently own and I don’t like it that much. I’d like to reduce my fees as much as possible. This could be a good reason to jump on EMR 🙂

    Keep up the good work!

    • Sim,

      Thank you for the support! I think now is a great time as ever to buy EMR – they are in the $45’s now!! Looking too good to pass up. Excited for my 4th quarter dividend and a possible increase from this aristocrat.

      -Lanny

  2. I bought some EMR awhile ago. The market has pulled back. It’s the time! Having learning about the Dogs of the Dow, I feel like even though EMR is not one of the dogs, but in the long run, EMR is a great longterm stock to buy and hold.

  3. The dividend growth has been very strong! I haven’t looked at EMR, but I will now. On a different note, since the fed did not raise rates, what do you think the next few months will have in store for us? I am curious of what your thoughts are there.

    Thanks!
    Andrew
    SHM

    • SHM,

      I think the market is still shaky honestly. Investors aren’t sure what to do and there is quite a bit of at value or overvaluation out there. As an investor, I am trying to invest consistently into large companies that are valued below their historical metrics and current ones, you know? Such as this EMR stock haha.

      I’m trying to make sure I have capital ready – hence Friday’s plummet down. Most volatility I’ve ever seen and I don’t see it stopping. Be prepared!

      -Lanny

    • Gremlin,

      Thank you – trying to keep the peddle to the FLOOR that’s for sure but at the same time, want to have capital for pull backs – such as Friday! I appreciate it and they are a nice aristocrat, that’s for sure!

      -Lanny

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