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):
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