Today was a quick trigger type of day. I wanted to initiate a position that has been gaining a lot of attention – not only on our watch list, but from the dividend blogging community as well. I made a purchase on my phone while at a Financial Institutions conference with 3% battery life left. After the trade was made, my phone died. Timing? We’ll see. As you remember from our Sunday post, the diplomats released their current – Watch List – and stocks we are considering, with a close monitor on.
Yes – I am officially in the John Deere (DE) club! I hopped on the tractor and want to plow the ever growing field of green, that has been increasing every year at an astonishing rate. The P/E was in a great territory, the comparisons and fundamentals are extremely sound. I heard the engine and it was loud, almost as if the green and yellow was seeping through the pours. Here are the main reasons why I purchased the big ol green tractor:
- The yield at the purchase price I bought it on, which I’ll disclose later, was at 2.85%. This was up a midge from our article, 2 basis points, and I was looking at any other price drop.
- At the time of the article = $84.76, the price dropped to $84.16/17 and I placed a quick limit order at 84.15 when I saw it down today, just before my phone died. I did not know if I bought the trade until 90 minutes or so ago. Talk about a surprise because it hit. A 72 basis point drop off was fine with me, which caused my P/E also to look a smidge better as well on the purchase
- The 2.85% vs the 5 year average of 2.15%, was too much to not look at. 70 basis points is great and I expect this to rise in the future at a level that is sustainable.
- Their low payout ratio is amazing. Even if they go through a contracted cycle and EPS is pressured from ~$8.25 range to $6 – that is still a 14 PE ratio! Great value as an investor.
- The three year growth rate of 13+% couldn’t be looked away from as well and that’s including a 17+% this past year. I’m looking forward to next May, that’s for sure, which is when they typically have raised or even February.
- Fundamentally sound, current & quick ratios at 1.5X+, liquid and paired well with my Scott’s Miracle Gro.
This total purchase of 23 shares at $84.15, total purchase cost of $1,935.45 and adds $55.20 to my projected annual Dividend Income, which inches me closer to my projected annual dividend income goal of $4,000.
How do you feel about the purchase? Think it was at a great price to initiate a position in them? Thoughts on increases going forward? Would love to hear from both – fellow tractor riding owners and non-John Deere stock holders. Thanks everyone, talk soon!
-Lanny