Lorillard: Next Stock Purchase For The Dividend Yield Passive Income Portfolio

I increased my tobacco engagement within the Dividend Yield Passive Income Portfolio. I purchased a new tobacco stock, the Lorillard. It’s the fourth company from the cigarettes industry. The others are Philip Morris, Altria, and British Tobacco.

I love the high yield of the 15 billion tobacco player. For sure, Lorillard has a higher risk because of its low diversification and is much more under pressure because of its menthol cigarettes.

The current dividend yield amounts to 5.2 percent while the forward P/E is at 12.02. I believe it’s a great compensation if we exclude the risks of the company. Growth is also forecasted. Over the next five years, earnings should grow by 12.5 percent yearly. 

Latest Portfolio Performance (Click to enlarge)

Portfolio Overview (Click to enlarge)

Portfolio Overview II (Click to enlarge)

Lorillard manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes. The Cigarettes segment manufactures and sells cigarettes. It offers 39 product offerings in various brand names, including Newport, Kent, True, Maverick, and Old Gold.

Lorillard is still a high yielding company despite the fact that stock price nearly tripled since the low in 2009. The company boosted dividends over the past six consecutive years. The three year dividend growth rate is at 17.3 percent, a very high value but debt ratios were also low during that time. Not Lorillard has over $3 billion long-term debt but also much lower outstanding shares. The debts were used for massive share repurchases.

Earnings and Dividends of Lorillard

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For readers who are new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.

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The new Lorillard stake will boost my yearly passive dividend income by additional $65. The full year dividend income is now estimated at $2,330 and should grow over $3,000 by the end of this year if I fulfill my aim to buy each week a stock with an initial yield of more than 3 percent.

The full portfolio holdings are up 4.13 percent in average. Due to the slow purchase process which is part of the strategy, the whole performance since the date of funding is only 3.69 percent.

Portfolio Performance (Click to enlarge)

Here is the income perspective of the portfolio

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	25.36	3.89		28.90	50	$64.75	$1,644.00
LMT	Lockheed Martin C	13.72	3.76		92.72	20	$92.00	$2,448.40
INTC	Intel Corporation	11.92	4.08		21.27	50	$45.00	$1,099.00
MCD	McDonald's Corpor	17.37	3.25		87.33	15	$46.20	$1,415.40
WU	Western Union Com	11.28	2.66		11.95	100	$47.50	$1,753.00
PM	Philip Morris Int	16.3	4.1		85.42	20	$68.78	$1,668.80
JNJ	Johnson & Johnson	19.22	2.93		69.19	20	$50.80	$1,728.20
MO	Altria Group Inc	15.51	5.19		33.48	40	$70.40	$1,355.20
SYY	Sysco Corporation	19.13	3.47		31.65	40	$44.40	$1,280.80
DRI	Darden Restaurant	14.85	4.4		46.66	30	$61.50	$1,386.30
CA	CA Inc.	12.95	3.37		21.86	50	$50.00	$1,462.50
PG	Procter & Gamble	20.03	3.01		68.72	25	$58.20	$1,947.25
KRFT	Kraft Foods Group	17	3.86		44.41	40	$80.00	$2,070.80
MAT	Mattel Inc.	18.13	3.44		36.45	40	$55.60	$1,620.00
PEP	Pepsico Inc. Com	18.69	2.75		70.88	20	$43.60	$1,594.60
KMB	Kimberly-Clark Co	19.76	3.34		86.82	15	$46.50	$1,402.20
COP	ConocoPhillips Co	11.04	4.04		61.06	20	$52.80	$1,326.00
GIS	General Mills In	17.64	2.78		42.13	30	$41.10	$1,479.60
UL	Unilever PLC Comm	18.07	3.5		39.65	35	$47.01	$1,336.30
NSRGY	NESTLE SA REG SHR	18.01	3.34		68.69	30	$65.31	$1,963.50
GE	General Electric	17.11	3.2		23.39	65	$48.10	$1,504.10
ADP	Automatic Data Pr	24.71	2.38		61.65	25	$42.50	$1,779.00
K	Kellogg Company C	23.21	2.94		61.52	25	$44.50	$1,517.75
KO	Coca-Cola Company	20.06	2.81		38.83	40	$42.80	$1,527.20
RTN	Raytheon Company	13.07	2.77		57.04	20	$42.00	$1,508.20
RCI	Rogers Communicat	10.75	4.18		46.5	50	$83.30	$1,980.00
GPC	Genuine Parts Com	17.41	2.67		77.06	20	$41.28	$1,540.20
TSCDY	TESCO PLC SPONS A	231.4	3.96		17.08	110	$75.68	$1,903.00
APD	Air Products and	21.87	2.64		85.71	15	$40.50	$1,532.10
GSK	GlaxoSmithKline P	19.63	4.6		52.16	30	$71.13	$1,526.70
WMT	Wal-Mart Stores	14.1	2.5		79.25	20	$36.16	$1,459.60
BTI	British American	15.56	4.1		111.13	23	$96.14	$2,336.11
CHL	China Mobile Limi	10.48	4.11		55.32	25	$54.95	$1,349.25
MMM	3M Company Common	17.74	2.2		110.27	15	$37.43	$1,703.70
TUP	Tupperware Brands	17.63	2.39		80.98	15	$29.40	$1,211.55
IBM	International Bus	12.97	1.97		197.09	16	$57.60	$2,916.32
HAS	Hasbro Inc.	18.45	3.33		44.09	30	$45.60	$1,367.40
T	AT&T Inc.	25.77	5.32		34.47	30	$53.70	$1,014.90
WAG	Walgreen Co. Comm	20.81	2.4		44.25	30	$34.20	$1,442.10
AFL	AFLAC Incorporate	8.05	2.42		59.39	20	$28.00	$1,155.80
TGT	Target Corporatio	15.22	2.39		71.46	20	$30.20	$1,266.20
CSCO	Cisco Systems In	12.61	2.64		26.19	50	$31.00	$1,165.50
DE	Deere & Company C	9.62	2.44		84.11	15	$29.10	$1,254.60
RGR	Sturm Ruger & Co	11.25	3.62		51.65	20	$38.52	$1,047.40
LO	Lorillard Inc Co	13.22	5.11		42.3	30	$65.00	$1,269.00
							$2,330.23	$70,259.53