On the latest trading day of the month, I decided to purchase a new holding company for the Dividend Yield Passive Income Portfolio.
It was the technology stock Oracle. Like Microsoft, Oracle dominates the application software market for business clients. Databases are core products of Oracle.
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| Earnings and Dividends of Oracle (ORCL) |
The company is not a well-known dividend grower because it invested much money into big acquisitions within the recent years.
Acquisitions were the main growth driver which boosted sales to a total amount of $37 billion compared to $10 billion a decade before. Earnings increased by a factor of 3.7 during the same period.
Acquisitions were the main growth driver which boosted sales to a total amount of $37 billion compared to $10 billion a decade before. Earnings increased by a factor of 3.7 during the same period.
I love technology stocks because of the high cash amounts and the strong growing cash flows. Most of the big technology giants started to give money back to shareholders and I’m pretty confident that Oracle will also give back some parts of his wealth.
I purchased 40 shares at $35.20 which resulted in $1,413 total investment amount. The new stake will not deliver high dividends due to the low payout of Oracle.
In total, the stake should bring around $17 per year but has great potential to grow over the next years. The current dividend payout ratio is at 30 percent.
In total, the stake should bring around $17 per year but has great potential to grow over the next years. The current dividend payout ratio is at 30 percent.
More interestingly is the cheap valuation of Oracle, measured by a forward P/E of 11.12. With long-term growth perspectives, it’s in my view a solid stock for the portfolio that could deliver growth possibilities at an attractive price.
Most of the big technology companies are real underperformer this year. Oracle is up 12.28 percent year to date but did not outperform major indices. The Dow is up 19.71 percent and the S&P 500 hit the 25 percent recently.
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| Latest Portfolio Transactions (Click to enlarge) |
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| Latest Portfolio I (Click to enlarge) |
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| Latest Portfolio II (Click to enlarge) |
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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 full portfolio performance amounts to 11.1 percent. That’s an underperformance compared to the major indices but the major goal is not to make quick money in strong rising markets. The aim is to create a long-term orientated portfolio that doubles its income each 10 years.
The underperformance is also reasonable to the slow purchasing process and high cash amounts over the past year which was part of the strategy.
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| 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 | 33.8 | 3.47 | 28.90 | 50 | $65.00 | $1,869.00 | |
| LMT | Lockheed Martin C | 15.36 | 3.32 | 92.72 | 20 | $95.60 | $2,833.40 |
| INTC | Intel Corporation | 12.93 | 3.77 | 21.27 | 50 | $45.00 | $1,192.00 |
| MCD | McDonald's Corpor | 17.52 | 3.21 | 87.33 | 25 | $78.00 | $2,434.25 |
| WU | Western Union Com | 11.14 | 2.97 | 11.95 | 100 | $50.00 | $1,667.00 |
| PM | Philip Morris Int | 16.23 | 4.13 | 89.76 | 30 | $105.87 | $2,566.20 |
| JNJ | Johnson & Johnson | 21.18 | 2.73 | 69.19 | 20 | $51.80 | $1,893.20 |
| MO | Altria Group Inc | 14.49 | 4.85 | 33.48 | 40 | $72.00 | $1,479.20 |
| SYY | Sysco Corporation | 20.37 | 3.31 | 31.65 | 40 | $44.80 | $1,345.20 |
| DRI | Darden Restaurant | 19 | 3.93 | 46.66 | 30 | $63.00 | $1,599.90 |
| CA | CA Inc. | 14.06 | 3.04 | 21.86 | 50 | $50.00 | $1,650.00 |
| PG | Procter & Gamble | 21.42 | 2.81 | 68.72 | 25 | $59.20 | $2,105.50 |
| KRFT | Kraft Foods Group | 17.24 | 3.79 | 44.41 | 40 | $80.00 | $2,124.80 |
| MAT | Mattel Inc. | 19.37 | 3.11 | 36.45 | 40 | $57.60 | $1,850.80 |
| PEP | Pepsico Inc. Com | 19.82 | 2.62 | 70.88 | 20 | $44.20 | $1,689.20 |
| KMB | Kimberly-Clark Co | 22.5 | 2.93 | 86.82 | 15 | $47.55 | $1,637.40 |
| COP | ConocoPhillips Co | 11.11 | 3.72 | 61.06 | 20 | $52.80 | $1,456.00 |
| GIS | General Mills In | 18.93 | 2.81 | 42.13 | 30 | $42.60 | $1,512.90 |
| UL | Unilever PLC Comm | 18.94 | 3.47 | 39.65 | 35 | $48.83 | $1,417.50 |
| NSRGY | NESTLE SA REG SHR | 20.16 | 2.98 | 68.69 | 30 | $65.31 | $2,193.30 |
| GE | General Electric | 20.17 | 2.83 | 23.39 | 65 | $49.40 | $1,732.90 |
| ADP | Automatic Data Pr | 27.32 | 2.17 | 61.65 | 25 | $43.50 | $2,000.50 |
| K | Kellogg Company C | 23.28 | 2.96 | 61.52 | 25 | $45.00 | $1,516.00 |
| KO | Coca-Cola Company | 20.83 | 2.79 | 38.83 | 40 | $44.80 | $1,607.60 |
| RTN | Raytheon Company | 15.36 | 2.41 | 57.04 | 20 | $43.00 | $1,773.60 |
| RCI | Rogers Communicat | 12.07 | 3.77 | 46.5 | 50 | $84.00 | $2,241.50 |
| GPC | Genuine Parts Com | 18.35 | 2.57 | 77.06 | 20 | $42.12 | $1,656.80 |
| TSCDY | TESCO PLC SPONS A | N/A | 4.1 | 17.08 | 110 | $75.79 | $1,888.70 |
| APD | Air Products and | 23.3 | 2.54 | 85.71 | 15 | $41.55 | $1,632.45 |
| GSK | GlaxoSmithKline P | 20.68 | 4.59 | 52.16 | 30 | $72.24 | $1,587.60 |
| WMT | Wal-Mart Stores | 15.55 | 2.23 | 79.25 | 20 | $36.16 | $1,620.20 |
| BTI | British American | 16.23 | 3.93 | 111.13 | 23 | $96.14 | $2,445.59 |
| CHL | China Mobile Limi | 10.63 | 4.13 | 55.32 | 40 | $89.52 | $2,169.60 |
| MMM | 3M Company Common | 20.51 | 1.9 | 110.27 | 15 | $38.10 | $2,002.65 |
| TUP | Tupperware Brands | 19.13 | 2.43 | 80.98 | 15 | $33.30 | $1,370.10 |
| IBM | International Bus | 12.39 | 2.07 | 193.17 | 20 | $74.00 | $3,593.60 |
| HAS | Hasbro Inc. | 24.69 | 2.9 | 44.09 | 30 | $46.80 | $1,614.60 |
| T | AT&T Inc. | 25.92 | 5.08 | 34.47 | 30 | $54.00 | $1,056.30 |
| WAG | Walgreen Co. Comm | 23.13 | 1.99 | 44.25 | 30 | $35.40 | $1,776.00 |
| AFL | AFLAC Incorporate | 10.15 | 2.14 | 59.39 | 20 | $28.40 | $1,327.40 |
| TGT | Target Corporatio | 17.24 | 2.45 | 68.69 | 32 | $50.56 | $2,045.76 |
| CSCO | Cisco Systems In | 11.57 | 2.4 | 25.12 | 90 | $45.90 | $1,912.50 |
| DE | Deere & Company C | 9.22 | 2.37 | 84.11 | 15 | $29.85 | $1,263.60 |
| RGR | Sturm Ruger & Co | 14.6 | 2.76 | 51.65 | 20 | $42.48 | $1,538.60 |
| LO | Lorillard Inc Co | 16.2 | 4.27 | 42.3 | 30 | $66.00 | $1,539.90 |
| UNP | Union Pacific Cor | 17.95 | 1.82 | 154.75 | 8 | $23.68 | $1,296.32 |
| IDA | IDACORP Inc. Com | 15.38 | 3.06 | 47.94 | 20 | $31.40 | $1,033.60 |
| BAX | Baxter Internatio | 17.28 | 2.76 | 66.38 | 20 | $37.60 | $1,369.00 |
| MSFT | Microsoft Corpora | 14.08 | 2.58 | 33.88 | 40 | $38.80 | $1,525.20 |
| ACN | Accenture plc. Cl | 15.73 | 2.24 | 77.71 | 20 | $34.80 | $1,549.40 |
| BCE | BCE Inc. Common | 14.49 | 3.9 | 44.26 | 25 | $42.98 | $1,104.75 |
| VZ | Verizon Communica | 65.01 | 4.16 | 50.31 | 30 | $62.25 | $1,488.60 |
| CVX | Chevron Corporati | 10.01 | 3.19 | 124.03 | 10 | $39.00 | $1,224.40 |
| ORCL | Oracle Corporatio | 15.17 | 1.19 | 35.2 | 40 | $16.80 | $1,411.60 |
| | | | | | | | |
| | | | | | | $2,854.47 | $93,433.67 |
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| | | | | | | Average Yield | 3.06% |
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| | | | | | | Yield On Cost | 3.39% |
