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It’s dividend income update time. One of my favorite times of the month as I get to review my previous month of passive income received from my dividend income portfolios.

Without rehashing the wild ride we experienced in the market the last few months, I could find comfort in one thing, my dividends. As we all know, the market may move up and down irrationally and seemingly on a whim while our dividends remain much more stable, reliable and predictable. Sure, dividends may not increase every year and a cut or elimination is even possible but the odds are greatly reduced when you diversify among different companies and sectors and focus on dividend quality (free cash flow, EPS and payout ratios). Forget chasing the high yield unicorns and focus on the boring lower yielding but sustainable dividends. In the long run you’ll be better off. With that being said, let’s take a look at my April 2019 dividend totals.

Brokerage Account

Year to date dividends: $2,002.24

DateDescriptionAmount $
 04/01/19  ***INGERSOLL RAND PLC CASH DIV ON 89 SHS REC 03/08/19 PAY 03...47.17
 04/01/19  COCA COLA COMPANY (THE) CASH DIV ON 126.99777 SHS50.80
 04/01/19  ***ALLEGION PUBLIC LIMITED COMPANY CASH DIV ON 28.07368 SHS7.58
 04/02/19  KIMBERLY CLARK CORP CASH DIV ON 64 SHS REC 03/08/19 PAY 04/0...65.92
 04/10/19  ILLINOIS TOOL WORKS INC CASH DIV ON 58.44715 SHS REC 03/29/1...58.45
 04/11/19  PHILIP MORRIS INTERNATIONAL INC CASH DIV ON 40.66506 SHS46.36
 04/12/19  MONDELEZ INTERNATIONAL INC COM CASH DIV ON 32.19688 SHS8.37
 04/15/19  ***JOHNSON CONTROLS INTERNATIONAL PLC ORDINARY SHARES CASH D...30.93
 04/15/19  CARDINAL HEALTH INC CASH DIV ON 61.61456 SHS REC 04/01/19 PA...29.35
 04/15/19  ***CHUBB LTD COM CASH DIV ON 9.05059 SHS6.61
 04/17/19  ***DIAGEO PLC-SPONSORED ADR REPSTG 4 ORD SHS CASH DIV ON 43 ...58.66
 04/25/19  GENERAL ELECTRIC COMPANY COM CASH DIV ON 308.33683 SHS3.08
 04/30/19  ALTRIA GROUP INC CASH DIV ON 56.54623 SHS REC 03/25/19 PAY 0...45.24
Total: $458.52
ROTH Account

Year to date dividends: $752.93

DateDescriptionAmount $
 04/01/19  COCA COLA COMPANY (THE) CASH DIV ON 31.24548 SHS12.50
 04/02/19  KIMBERLY CLARK CORP CASH DIV ON 7 SHS REC 03/08/19 PAY 04/02...7.21
 04/11/19  PHILIP MORRIS INTERNATIONAL INC CASH DIV ON 7.11639 SHS8.11
 04/12/19  MONDELEZ INTERNATIONAL INC COM CASH DIV ON 44.27071 SHS11.51
 04/29/19  ***BANK OF NOVA SCOTIA CASH DIV ON 160.80676 SHS REC 04/03/1...103.90
 04/30/19  ALTRIA GROUP INC CASH DIV ON 27 SHS REC 03/25/19 PAY 04/30/1...21.60
Total: $164.83
IRA Account

Year to date dividends: $323.33

DateDescriptionAmount $
 04/12/19  VENTAS INC CASH DIV ON 80.04138 SHS REC 04/01/19 PAY 04/12/1...63.43
 04/30/19  LTC PROPERTIES INC CASH DIV ON 30.63749 SHS REC 04/22/19 PAY...5.82
Total: $69.25

Dividend income from my taxable account totaled $458.52 up from $420.31 an increase of 9.1% from April of last year.

Dividend income from my ROTH account totaled $164.83 up from $151.25 an increase of 9.0% from this time last year.

Dividend income from my IRA account totaled $69.25 up from $67.83, a year over year increase of 2.1%.

Grand total for the month of April: $692.60 an increase of 8.3% from April 2018.

An overall modest year over year increase which in my book is a win. Who wouldn’t want to continually grow their passive income stream in the face of so much near term price uncertainty. As mentioned above, stocks will rise and fall on a seeming whim but those predictable and reliable dividends keep chugging along.

Are any of these dividend stocks in your portfolio too? How was your April dividend income? Please let me know below.

Disclosure: Long all above

The post Dividend Income Update April 2019 appeared first on DivHut.

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New month… new stock considerations? Well, I guess if you call picking the same stocks for the last four or five months as new then, yes… these are my “new” stock considerations. Ever since going the DGI route I don’t recall considering the same four or five stocks for several months in a row but I guess when you see some compelling, juicy yield being served up by some of the most respected dividend stocks you can’t just turn a blind eye. With that being said, let’s take a look at my May stock considerations.

First, I am looking at Altria Group, Inc. (MO). Though the stock has come back quite nicely from its recent lows I still like the stock under $60. The juicy yield well north of 5% is still well covered and the negative sentiment around the stock has not abated which still might give those wishing to go long the stock some time to make up their mind and pick up some shares. I believe MO’s entry into the cannabis and vaping space will, in the long run, pay off as traditional tobacco usage continues to decline.

Next, I’m thinking about buying more AT&T Inc. (T), especially if stock prices go to $30 or below. T was my sole purchase in November as prices remained depressed and yields got pushed ever higher. Sure, there are a lot of near term headwinds this company is currently facing, not least of which is its debt load, but, the dividend still appears to be quite safe and can reward patient shareholders over the long haul. T still remains less than 1% of my taxable account and much less when compared to all three of my portfolios. In other words, I’m still comfortable adding to my position.

In the health/biotech space I’m looking to add to my Gilead Sciences, Inc. (GILD). It was one of my potential picks for December and January and was my sole buy in February and as prices continued to remain weak in 2019 and yields, which are still well covered, are around historical highs just below 4%.

Finally, I am looking to buy AbbVie Inc. (ABBV). This was my sole purchase in the month of March and April as I added some shares to my ROTH account. 2019 has been a tough year for the stock and it is once again trading at levels not seen since October of last year. With a sustainable yield pushing well over 5% this long time holding of mine is looking enticing, especially under $80.

What do you think about my potential stock buys for the month of May? Are you considering any of these names for your own portfolio? Please let me know below.

Disclosure: Long T, MO, ABBV, GILD

The post May 2019 Stock Considerations appeared first on DivHut.

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The following is a guest blog post:

Saving money can be a challenge but it’s not impossible. With the following tips, over the course of a few months, you’ll notice your savings start to grow as long as you implement these practices and stick to them.

Create a budget

It’s great to have an idea of how much you’re spending and how much you want to be spending. Track your spending over the course of a month, and after you see your results, see if you can create a budget based on your newfound information. If you find that you’re spending a bit too much in one area, perhaps take a look and see if everything in that category is actually a necessity or if it’s merely a luxury.

You can start to do things like buying one less coffee a week or packing your lunch instead of buying out. While it may sound small, you’ll end up saving quite a bit if you stick to it over time.

Pay bills on time

This one sounds obvious, but it’s really crucial. If you don’t prioritize paying your debt on time each month, you can really get hammered down with interest rates and penalty fees. If there are certain bills that are about the same each month, try to automate those payments in your bank account so that you don’t even have to think about them.

Use your credit card rewards – or open a card with rewards

Double check which credits cards you’re using, if any. While opening a credit card can seem counter intuitive to saving money, some credit cards do have some excellent perks. For instance, the Amazon Prime Chase credit card accumulates rewards that you can then use as a credit on your next Amazon purchase.

As long as you’re paying your bills on time, it may make sense to open a card. If you’re a traveler, consider opening a travel card that can help you build rewards and save money on future travel expenses.

Double check how much you are spending on utilities

You should also check on which company is providing your energy at home. If you find that your provider is overcharging, consider switching to another one. Moneyexpert.com is an excellent source if you’d like to compare energy prices or find another provider.

Alternatively, use cash only

If credit cards are too daunting or you find yourself overspending with a card, you can also opt to cut cards out entirely and pay only with cash. Take out a certain amount of money once a month and try to use only that cash to buy things. It will be much easier for you to avoid tempting products when you see your money disappearing from your wallet.

Sell things you don’t need – thrift things you do need

With the wonders of the internet age, you can opt to sell your clothes online. Of course, there are online platforms such as Ebay and Amazon that allow you to sell things, but there are also websites such as Poshmark, ThredUP, and Tradesy that are geared toward young women (and men, in the case of Poshmark) to sell their trendy and brand name clothing.

Go Green

Consider where you can save in other areas. For instance, don’t buy plastic water bottles. Perhaps buy a reusable water and a water filter, so you always have water when you need but without having to spend each time you want to fill up.

Also, consider making your own cleaning supplies instead of buying harsh chemicals. Most cleaning supplies can be made with vinegar and other solutions that you may already have in your kitchen. Your wallet will thank you and the Earth will thank you!

The post Money Hacks To Help You Reach Your Savings Goal appeared first on DivHut.

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From late March till late April today, the stock market has been looking quite strong once again. Of course, these days looking at any short term trading range is meaningless as we have witnessed extreme volatility the last several months. Up a few hundred points one day, down a few hundred the next. Where can we find stability? I’ll tell you… with our dividend growth portfolios. Wild market gyrations are no match for the diversified power of dividend paying stocks. Even with a cut or two the overall trend for passive income is up. This is why I continue to make at least one monthly purchase no matter what the financial markets are doing. It is that consistency that allows one to build up an ever increasing passive income stream over time. With that being said and sticking to my April stock considerations:

I have added to my ROTH account 15 shares at $77.99 for a total investment of $1,169.85 in AbbVie Inc. (ABBV). With this recent purchase my ROTH account holdings in ABBV now totals 35.0663 shares with a market value of $2,720.09. I also hold 151.9875 shares with a market value of $11,789.67 in my taxable account making ABBV one of my largest holdings overall. While I still like company very much long term I may want to look elsewhere for my next buy as my weighting becomes heavier in that stock. ABBV was also my sole purchase in March.

A couple weeks ago ABBV was trading well over $80 and my buy price was anything below that figure. Seeing ABBV in the high $70s once again compelled me to pull the trigger.

What do you think about my recent buy? Are you looking at ABBV or other health stocks? Seems like the entire sector is falling out of favor these days. There are still quite a few high quality high yielding names out there. What are you buying? Please let me know below.


Disclosure: Long ABBV

The post Recent Stock Purchase April 2019 appeared first on DivHut.

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The following is a guest blog post:

Until recently, cancer was a taboo word in Japan. In 1987 Emperor Hirohito underwent surgery for internal hemorrhaging due to a cancerous small intestine. Japanese officials stoutly denied there were any signs of cancer, though to the Japanese public the writing was on the wall.

It was common then for cancer patients to be denied the right to know their diagnosis. Later on, instead of outright denial, doctors would dance around the issue, and give certain nonverbal hints to patients. A 1988 piece on the subject from the Los Angeles Time quotes Hiroshi Wagatsuma, an anthropologist who researched this tacit communication: “Even if the doctor says nothing, the patient knows that he has cancer; and though nothing is said, the doctor knows that the patient knows.”

That culture of fear, silence, and death made fertile grounds for cancer insurance provider, Aflac. Japan offers National Health Insurance, but the many additional costs associated with cancer treatment made auxiliary insurance necessary. Aflac (NYSE: AFL) has established itself as the country’s premier cancer insurance provider. Within Aflac’s first year in Japan, 1974, the company had written $25 million in premiums. In 2017, 70% of the company’s total revenue came from Japan. In Forbes’ 1994 profile of the company they described CEO John Amos’ approach: “He didn’t know much about cancer statistics, but figured that where there was fear there was an opportunity to charge premiums high enough to make money.”

The fear about cancer was there, but cancer insurance was not. Aflac filled that void in 1974. For the first few years, Aflac was the only company selling cancer insurance making them a literal monopoly.

In 2012 77% of the company’s total revenue came from Japan. Aflac is now a $37 billion business and the majority of their revenue still comes from Japan. Just last year they pulled in $22 billion in sales. Aflac maintains a solid credit rating (A-) from the S&P which his allows them to issue cheap debt to grow the business and pay dividends. They’ve increased their dividend every year since 1992 making them a dividend aristocrat.

In December, Japan Post Holdings Co. acquired about 7% of Aflac Inc.’s shares. The deal will boost the presence of Aflac’s cancer insurance products throughout 20,000 postal outlets across Japan.

10-Year Dividend History

Aflac has some of the most reliable long-term dividend growth around. The company paid investors $0.56 per share a decade ago. Over the last 10 years, the dividend has climbed to $1.04. That’s an 86% increase and you can see the annual changes below…

The compound annual growth is 6.4% over 10 years, but over the last year, the dividend climbed 19.5%. The increase in dividend growth is a good sign. Aflac might work out as a great income investment. Let’s take a look at the yield…

Current Yield vs. 10-Year Average

Aflac’s long history of paying dividends makes it one of the best dividend stocks around. This also makes the dividend yield a great indicator of value. A higher yield is generally better for buyers. Sustainability is also vital, and the recent deal with Japan Post is a good sign of future growth.

The dividend yield comes in at 2.17% and that’s below the 10-year average of 2.87%. The chart below shows the dividend yield over the last 10 years…

The lower yield shows that investors have bid up the company’s market value. They might be expecting higher growth and payouts. But more often than not, the dividend yield is mean reverting with share price changes.

Improved Dividend Safety Check

Many investors look at the payout ratio to determine dividend safety. They look at the dividend per share divided by the net income per share. So, a payout ratio of 60% would mean that for every $1 Aflac earns, it pays investors $0.60.

The payout ratio is a good indicator of dividend safety, but, accountants can manipulate net income. They adjust for goodwill and other non-cash items. A better metric is free cash flow.

Here’s Aflac payout ratio based on free cash flow over the last 10 years…

The ratio is volatile over the last 10 years and the trend is up. The last reported year shows a payout ratio of 13.3%. This gives plenty of room for Aflac to payout dividends in the future. As dividend aristocrat’s it is fair to classify Aflac as a shareholder friendly company.

Good investing,

Peter

The post Aflac: Japan’s Largest Cancer Insurer appeared first on DivHut.

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The start of every month is exciting for all dividend income investors as we look back at the previous month and see how much passive dividend income our portfolios generated. March was exciting as ever as my year over year numbers continue to highlight the trifecta magic of dividend investing which includes, adding fresh capital, dividend raises and basic compounding to create an ever increasing passive income stream. Even if I stopped adding fresh capital today and every dividend stock I owned kept all distributions flat, without a single raise, my passive income stream would continue to grow. With that being said, let’s take a look back at my March 2018 dividend income.

Dividend income from my taxable account totaled $792.26 up from $679.27 an increase of 16.6% from March of last year.

Dividend income from my ROTH account totaled $182.92 up from $159.04 an increase of 15.0% from this time last year.

Dividend income from my IRA account totaled $5.80 down from $59.92 from this time last year, a decrease of -90.3%. Nothing wrong here. HCP used to pay in March last year which explains the year over year decrease as its payment has shifted to another month.

Grand total for the month of March: $980.98 an increase of 9.2% from March 2018.

Brokerage Account

Year to date dividends: $1,543.72

DateDescriptionAmount $
 03/01/19  WELLS FARGO & CO CASH DIV ON 42.33184 SHS REC 02/01/19 PAY 0...19.05
 03/01/19  PFIZER INC CASH DIV ON 49.36173 SHS REC 02/01/19 PAY 03/01/1...17.77
 03/01/19  W W GRAINGER INC CASH DIV ON 14.06002 SHS REC 02/11/19 PAY 0...19.12
 03/01/19  BEMIS CO INC CASH DIV ON 36.22872 SHS REC 02/20/19 PAY 03/01...11.59
 03/01/19  AFLAC INC CASH DIV ON 361.03290 SHS REC 02/20/19 PAY 03/01/1...97.48
 03/06/19  WABTEC CORP COMMON STOCK CIL ON 0.65608 SHRS CIL PAYMENT @71...47.20
 03/06/19  SOUTHERN CO CASH DIV ON 151.94059 SHS REC 02/19/19 PAY 03/06...91.16
 03/08/19  WABTEC CORP COMMON STOCK CIL on 0.65608 Shrs CIL Payment @74...49.00
 03/08/19  YUM BRANDS INC CASH DIV ON 59.23193 SHS REC 02/14/19 PAY 03/...24.88
 03/08/19  AMGEN INC CASH DIV ON 2.01339 SHS REC 02/15/19 PAY 03/08/192.92
 03/11/19  EMERSON ELECTRIC CO CASH DIV ON 81.63445 SHS REC 02/15/19 PA...40.00
 03/12/19  3M COMPANY CASH DIV ON 24.16199 SHS REC 02/15/19 PAY 03/12/1...34.79
 03/12/19  JOHNSON & JOHNSON CASH DIV ON 44.27028 SHS REC 02/26/19 PAY ...39.84
 03/12/19  ARCHER-DANIELS-MIDLAND CO CASH DIV ON 184.36860 SHS REC 02/1...64.53
 03/15/19  MCDONALDS CORP CASH DIV ON 28.17815 SHS REC 03/01/19 PAY 03/...32.69
 03/15/19  DOVER CORPORATION CASH DIV ON 46.29389 SHS REC 02/28/19 PAY ...22.22
 03/15/19  CONSOLIDATED EDISON INC CASH DIV ON 75.64754 SHS REC 02/13/1...55.98
 03/18/19  VF CORPORATION CASH DIV ON 56 SHS REC 03/08/19 PAY 03/18/1928.56
 03/20/19  DOMINION ENERGY INC COMMON STOCK CASH DIV ON 94 SHS REC 03/0...86.25
 03/21/19  YUM CHINA HOLDINGS INC COM CASH DIV ON 58.19852 SHS6.98
 03/21/19  ***UNILEVER PLC SPONSORED ADR CASH DIV ON 20 SHS REC 02/15/1...8.84
 03/22/19  KRAFT HEINZ COMPANY (THE) COMMON STOCK CASH DIV ON 58.75317 ...23.50
 03/28/19  GILEAD SCIENCES INC CASH DIV ON 16.04588 SHS REC 03/15/19 PA...10.11
 03/29/19  PEPSICO INC COMMON STOCK CASH DIV ON 35 SHS REC 03/01/19 PAY...32.46
 03/29/19  PRICE T ROWE GROUP INC CASH DIV ON 5.03842 SHS REC 03/15/19 ...3.83
 03/29/19  BECTON DICKINSON & CO CASH DIV ON 23 SHS REC 03/08/19 PAY 03...17.71
Total: $ 792.26
ROTH Account

Year to date dividends: $588.10

DateDescriptionAmount $
 03/01/19  PFIZER INC CASH DIV ON 9.06644 SHS REC 02/01/19 PAY 03/01/193.26
 03/08/19  YUM BRANDS INC CASH DIV ON 17.06683 SHS REC 02/14/19 PAY 03/...7.17
 03/11/19  EMERSON ELECTRIC CO CASH DIV ON 56.43863 SHS REC 02/15/19 PA...27.65
 03/12/19  3M COMPANY CASH DIV ON 9.06074 SHS REC 02/15/19 PAY 03/12/1913.05
 03/12/19  JOHNSON & JOHNSON CASH DIV ON 8.04914 SHS REC 02/26/19 PAY 0...7.24
 03/15/19  MCDONALDS CORP CASH DIV ON 11.06999 SHS REC 03/01/19 PAY 03/...12.84
 03/18/19  VF CORPORATION CASH DIV ON 41 SHS REC 03/08/19 PAY 03/18/1920.91
 03/20/19  DOMINION ENERGY INC COMMON STOCK CASH DIV ON 10 SHS REC 03/0...9.18
 03/21/19  YUM CHINA HOLDINGS INC COM CASH DIV ON 17.05819 SHS2.05
 03/21/19  ***UNILEVER PLC SPONSORED ADR CASH DIV ON 105 SHS REC 02/15/...46.43
 03/22/19  KRAFT HEINZ COMPANY (THE) COMMON STOCK CASH DIV ON 36.46748 ...14.59
 03/29/19  PEPSICO INC COMMON STOCK CASH DIV ON 20 SHS REC 03/01/19 PAY...18.55
Total: $182.92
IRA Account

Year to date dividends: $254.08

DateDescriptionAmount $
 03/29/19  LTC PROPERTIES INC CASH DIV ON 30.51197 SHS REC 03/21/19 PAY...5.80
Total: $5.80

I have to say I’m quite pleased with my March totals. Who would complain about an 9.2% year over year increase (even with that nasty KHC cut)? Stay diversified my friends.

The proof of our dividend investing strategy rests in these real results. After all, dividends don’t lie. It’s real cash being returned to investors. With patience and consistency these results and better can be achieved. Just remember, sometimes investing with blinders on can be beneficial as it blocks out the constant noise we are bombarded with on a daily basis and keeps you focused on the job at hand which is to keep investing, not falling for market timing traps, diversifying, not getting shaken out of the market when it tumbles and just creating a solid, ever growing passive income stream.

Are any of these dividend stocks in your portfolio too? How was your March dividend income? Please let me know below.

Disclosure: Long all above

The post Dividend Income Update March 2019 appeared first on DivHut.

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As we find ourselves in the month of April I realize it is time for me to outline my potential stock buy(s) for the next few weeks. Looking at my portfolio and seeing what relative good values are out there it seems that I’m considering “more of the same.” These are the stocks that seem to be on the radar of many in the DGI space as we seek to maximize potential returns with high safe yields. With that being said let’s take a look at my April stock considerations.

First, I am looking at Altria Group, Inc. (MO). Though the stock has come back quite nicely from its recent lows I still like the stock under $60. The juicy yield well north of 5% is still well covered and the negative sentiment around the stock has not abated which still might give those wishing to go long the stock some time to make up their mind and pick up some shares. The last time I added to my MO was back in January.

Next, I’m thinking about buying more AT&T Inc. (T), especially if stock prices go to $30 or below. T was my sole purchase in November as prices remain depressed and yields get pushed ever higher. Sure, there are a lot of near term headwinds this company is currently facing, not least of which is its debt load, but, the dividend still appears to be quite safe and can reward patient shareholders over the long haul. T still remains less than 1% of my taxable account and much less when compared to all three of my portfolios. In other words, I’m still comfortable adding to my position..

Finally, I am looking to buy AbbVie Inc. (ABBV). This was my sole purchase in the month of March as I added some shares to my ROTH account. 2019 has been a tough start for the stock and it is once again trading at levels not seen since October of last year. With a sustainable yield pushing well over 5% this long time holding of mine is looking enticing, especially under $80.

See, more of the same. These three stocks have been on my mind for at least the last four months or so. What do you think about my potential stock buys for the month of April? Are you considering any of these names for your own portfolio? Please let me know below.

Disclosure: Long MO, T, ABBV

The post April 2019 Stock Considerations appeared first on DivHut.

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With the entire month of March almost gone I realized that it’s time for me to make my monthly stock purchase. As the stock market continues to move up and down seemingly on a whim and without reason, I know that I can take comfort in one thing… my continued passive income hitting my account like clockwork in a predictable and consistent basis. This is why I make sure to make my buys and keep stacking those dividends. After all, the more you can stack the better equipped you are to handle those inevitable dividend cuts or eliminations that hit all of us at some time. With that being said, and sticking to my March stock considerations:

I have added to my ROTH account 15 shares at $79.96 for a total investment of $1,199.40 in AbbVie Inc. (ABBV). With this recent purchase my ROTH account holdings in ABBV now totals 20.0662 shares with a market value of $1,603.29. I also hold 151.9875 shares of ABBV in my taxable account with a market value of $12,141.52.

As you can see ABBV is a very large portion of my portfolio between my taxable and ROTH accounts yet I still felt comfortable adding to the stock under $80. Of course, I’m still eyeing Altria Group, Inc. (MO) even though it has climbed nicely from its recent lows about a month ago. MO in the mid $50s still looks good to me and overall it’s a relatively small portion of my portfolio. Why not pick up some safe and juicy yield while the stock price recovers? Perhaps it will be my April buy.

What do you think about my recent buy? Are you looking at ABBV or other health stocks? There are still quite a few high quality high yielding names out there. What are you buying? Please let me know below.

Disclosure: Long ABBV, MO

The post Recent Stock Purchase March 2019 appeared first on DivHut.

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The following is a guest blog post:

When thinking of ways to achieve financial independence, the on-growing small business sector might seem like the perfect answer. If you choose to take the plunge and start your own business, no matter how flawless the blueprint might look, there is no guarantee it will be set for success.

Taking a deeper look into the subject, statistics show that only about 70% of small businesses survive the first two years, out of which only two-thirds reach the five-year milestone. Despite these statistics, the idea of investing in a unique project, that could potentially revolutionize the targeted industry and provide financial growth, is a good enough reason for individuals to turn to small businesses. For example, in Canada, around 98% of enterprises are small businesses (under 100 employees) and only 0.3% are large corporations, as 2015 statistics show. Analyzing a bit further, we see that more than half of Canadian small businesses are micro-enterprises (maximum 4 employees).

But what exactly makes a business successful and is there indeed a recipe that can avoid financial disaster? Essentially, there are two directions you can approach, in order to get involved in the small business area: starting your own business or investing in an already existing and rising company. And in both situations, the expectations are quite similar. You invest in a project you believe in and expect an outsizing success.

Investing in your own idea

Even if you think you have spotted out a promising business idea, that could turn into a success, there are a few strategies that need to be implemented to ensure success:

  • Thorough research and business planning

No matter how much you believe in the project you are about to start, realistically evaluating your idea and keeping an objective outlook over the entire plan is paramount. The first and most important step is determining your ideal customer. Keep in mind aspects such as gender, age, income and education level, to help you create the profile of your ideal buyer.

After having a clear image of the potential buyer, you will need to conduct a market analysis to determine if the industry has room for your product. Chances are, there are already similar products on the market and in order to distinguish yourself from them, you will need to determine what makes your product stand out. Why should the customers choose your service, over the one they might have already been using for a while now? To answer this question, apart from knowing your product, you will have to be familiar with the competition. Conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis is an excellent way to research your competition.

This information will also help you in the future, when elaborating marketing strategies to advertise your product and attract customers.

A business plan is needed, in order to guide you through the process of growing your idea. There are many types of business plans you can choose from and you can tailor them even more to fit your business. Although, if you plan to seek for investors, following a traditional business plan might be a better option, as it checks all the aspects they typically look for, when deciding to fund an idea.

  • Developing a financial strategy

Establishing the budget for your business depends heavily on the type of project you have in mind. When establishing the financial plan, you need to make sure you cover both the initial investments and future expenses for at least one year. This will give you an idea of the budget you need, before seeking funding. There are various ways to fund your business, but typically entrepreneurs turn to two options:

Non-equity financing: In essence, this means you are borrowing money from a lender, with the commitment to pay them back within a certain time frame and under a set of terms. While not ideal, many people turn to friends and family, or personal credit cards during the initial stages. As the business matures and there is a track record of sales, revenue and profitability, this will open up doors to additional forms of financing, including small business loans.

Equity financing: This translates into receiving funds from investors, while trading partial ownership of your company. This means the investors assume part of the risks, in case of failure, but if your company succeeds, they end up making much more profit than a typical lender would.

A big mistake when choosing equity financing is giving up too much control over your company. This would be the exact opposite of financial stability and independence.

  • Choosing the legal business structure

The business structure you choose will reflect on may legal aspects of your company, from permits, licenses and taxes to name and liability. There are many options you can choose from, depending on your interests, investors and profits and the most commons usually are:

Sole Proprietorship: one person in handling the development and management of the business, embracing both the winnings and losses.

Corporation: Owned by a list of shareholders who elect a board of directors that are in charge of overseeing the overall development of the company. In this case, the company is a different entity than the owners.

Limited Liability Company (LLC): Although it has a lot in common with a corporation, in matters of taxation and legal entity, it has no stock and the owners are referred to as members, not shareholders.

  • Handling logistics

This includes all other physical needs your company has, from location to human resources.

When choosing the location, make sure it fits your business’ needs and determine whether it is better for you to purchase or lease the space.

Again, based on the type of business you are going to run, you have to decide if it’s better to assemble a team or outsource work to contractors.

Investing in promising start-ups

Once you start making profit and gain financial stability, consider investing in other small businesses. This will give you a chance to help someone who is in the same position as you once were and also generate other financial income. When investing in an existing company, analyze and decide whether it’s best for you to lend the money or buy stakes. While equity investments might provide more profit, it is also subject to higher risk and a bad year can cause massive losses.

The post Small Business Investing: Essential Strategies And Mistakes To Avoid appeared first on DivHut.

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The following is a guest blog post:

Improving your financial situation and your quality of life at the same time demands from you to pursue the right monetary approaches. While there are plenty of ways of generating income, if you are interested in highly promising gains, investing might be the path you should be choosing. The stock market has in store a wide range of opportunities, but in order for things to go the way you expect them to, perseverance and a long-term involvement will be required from your part. Becoming an investor – whether you choose to dedicate all of your time to this professional activity or you want to mix it with your current career – might bring you the lifestyle changes you were ti for. To reach success, however, there are various relevant details that you shouldn’t be overlooking. The following tips should be on your mind as soon as you decide to become a stock market investor:

Diversification is key

One of the first things that need to be mentioned here is that for long-term investment practices, you need to be prepared to diversify. Because things can fluctuate constantly, when it comes to stock market assets and their appeal, you should be taking risks, and constantly exploring new opportunities. Investing in an increased number of stocks from different markets, in bonds, mutual funds and a few other instruments can be the only way of reaching the wealth heights you are thinking of. Whenever you are discussing with someone who has been in this field of practice for a while and has the necessary experience, they will be able to tell you that diversification is key. The portfolio of a successful investor will not consist of more than 10 percent on a single stock. From commodity funds to property funds and through different geographical areas, keep your eye on various sectors at all times. This way, if one stock market segment collapses at some time in the future – and things like this happen all the time – you will be protected, and your activities won’t be disrupted.

Borrow to invest

You may find yourself in a situation where you are presented with an appealing investment opportunity, but your current financial limitations aren’t allowing you to invest the amount you would want. Instead of missing out on something that could potentially change your general level of monetary well-being, what you should do is look into the possibility of taking a loan. Borrowing to invest has become a popular practice among investors, and as long as you are certain of the investment plan that stands ahead of you, taking a risk can be the wise thing to do. Various experts from the lending field explain how borrowing money can actually be the thing that takes you out of debt. As suggested by those at LoanStar Finland, loan packages are versatile, so finding loan type that fits your current needs can be simpler than you have imagined. While you shouldn’t be making impulse, uninformed decisions, if you have a repayment plan in mind, pursuing a promising investment by taking out a loan is certainly an option you shouldn’t be excluding.

Make the most of your research

With so many sources of information at close reach, there is no excuse in making undocumented decisions. Research should be one of your main priorities as soon as you want to become an investor. The internet stands at your disposal with a plenitude of comparison tools that allow you to thoroughly analyze and comprehend investments. While past performance is not always a guarantee, often opting for a unity fund that has had strong preformat characteristics might be the safer option. Join forums and discussion broads, read articles written by people with experience and keep yourself up to date in regards to all popular investment trends. A well-read and informed investor will obviously always be more successful than someone who acts on impulse.

Volatility is normal

Market declines always happen, so you should be prepared to face them without letting yourself be affected by a volatile market period. Keeping your head in the game while the market is going through a serious decline can save you from a total wealth loss. In the majority of cases, markets end up still providing positive retunes even after going through a rough patch.

Focus on the future

You know by now that investing demands making choices based on things that have not yet happen, so past data isn’t always a clear indicator of what is about to happen in a certain market. You should be using the information from past stock fluctuations to our advantage, but you should never regard the gathered data as a guarantee. Sometimes, taking a risk by noticing the future potential of a stock investment can be critical.

Separate your objectives form your emotions

You are in for the long-haul, so you should start learning how to separate your goals and objectives from your emotions. When you are benefiting from a highly productive trade, you might feel tempted to continue on the same path at a fast pace, and this can lead to disastrous results. If you treat your investments with the same enthusiasm as you would a sports game, for example, you will soon find yourself in crisis situations you could have easily avoided. Take enough time between investments, analyze your trades, don’t make excitement a primary investment consideration and you will face fewer concerns. Keep yourself open-minded and try to minimize emotional involvement as much as you possibly can.

The stock market can truly provide you with promising prospects. Managing to build wealth and access the lifestyle you have always dreamed of is possible through long-term investing, but in order for the outcomes of your actions to be the ones you expect, you will need to keep in mind some relevant details. Among the various aspects that need your attention, the factors mentioned here should be kept in mind and might provide you with the support you need to continue making wise decisions. Use these recommendations as you believe best, and your status as an investor could gain the strength you were targeting.

The post Successful Long-Term Investing Advice appeared first on DivHut.

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