Despite the small correction within the financial markets, the asset prices for high-quality dividend growth stocks are still high. We need a bigger correction to get back to normal prices but the current forces are too strength. It’s a process of valuation adjustments – stock yields come down to bond yields.
Last Friday, I put 15 shares of the industrial conglomerate into the Dividend Yield Passive Income (DYPI) Portfolio. I bought the company at 110.27 which resulted into a total purchase amount of $ 1,654.05. Below is a graph of the latest earnings and dividend developments from the recent five years.
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| Earnings and Dividends of MMM 3M |
3M Company is a diversified technology company with a presence in the industrial and transportation; health care; consumer and office; safety, security and protection services; display and graphics, and electro and communications businesses. 3M manages its operations in six business segments: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and Graphics, and Electro and Communications.
MMM is also not cheap but compared to other dividend champions lower valuated. The current P/E amounts to 17.42 while the forward P/E is calculated at 15.02. Investors get a yield of 2.30%.
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| Dividend Yield Passive Income Portfolio (Click to enlarge) |
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| Latest Portfolio Transactions (Click to enlarge) |
The 3M position is the eleventh biggest position within the DYPI-Portfolio. The portfolio has now 34 constituents and was funded on October 04, 2012. I plan to purchase each week one stake at cost between $1 to $2k. As a result, the cash reduced from $100k to $51. It’s a strategy of slow purchase and if the markets go further strong up, I need to close my acquisition process and rest on cash. The current valuation is too high to get good long-term yields.
What happened with my current holdings? They realized a gain of 10.24 percent. Because of the high cash amount (around 50 percent of the portfolio is still not invested), the portfolio performance life-to-date amounts to 5.46%.
The new stake will give me around $37 bucks per year in additional dividend income. The full year estimated passive dividend income is now at $1,718.
Here is the income perspective of the portfolio:
| Sym | Name | P/E Ratio | Dividend Yield |
| Buy | # Shrs | Income | Value |
| TRI | | 16.66 | 3.68 |
| 28.90 | 50 | $64.50 | $1,761.50 |
| LMT | Lockheed Martin C | 12.28 | 4.05 |
| 92.72 | 20 | $86.00 | $2,141.20 |
| INTC | Intel Corporation | 12.02 | 3.68 |
| 21.27 | 50 | $44.25 | $1,196.15 |
| MCD | McDonald's Corpor | 18.74 | 2.91 |
| 87.33 | 15 | $44.10 | $1,504.35 |
| WU | Western Union Com | 9.9 | 2.73 |
| 11.95 | 100 | $45.00 | $1,645.00 |
| PM | Philip Morris Int | 18.13 | 3.56 |
| 85.42 | 20 | $67.18 | $1,882.40 |
| JNJ | Johnson & Johnson | 23.69 | 2.86 |
| 69.19 | 20 | $49.80 | $1,736.40 |
| MO | Altria Group Inc | 17.06 | 4.69 |
| 33.48 | 40 | $69.20 | $1,483.60 |
| SYY | Sysco Corporation | 20.09 | 3.18 |
| 31.65 | 40 | $44.00 | $1,392.80 |
| DRI | Darden Restaurant | 16.23 | 3.76 |
| 46.66 | 30 | $60.00 | $1,584.90 |
| CA | CA Inc. | 13.21 | 3.66 |
| 21.86 | 50 | $50.00 | $1,370.00 |
| PG | Procter & Gamble | 17.63 | 2.91 |
| 68.72 | 25 | $57.20 | $2,047.00 |
| KRFT | Kraft Foods Group | 21.14 | 3.51 |
| 44.41 | 40 | $80.00 | $2,280.40 |
| MAT | Mattel Inc. | 19.72 | 2.84 |
| 36.45 | 40 | $51.60 | $1,825.20 |
| PEP | Pepsico Inc. Com | 21.04 | 2.62 |
| 70.88 | 20 | $43.00 | $1,651.60 |
| KMB | Kimberly-Clark Co | 22.31 | 2.95 |
| 86.82 | 15 | $45.45 | $1,552.65 |
| COP | ConocoPhillips Co | 10.19 | 4.2 |
| 61.06 | 20 | $52.80 | $1,250.60 |
| GIS | General Mills In | 17.89 | 2.7 |
| 42.13 | 30 | $39.60 | $1,469.40 |
| UL | Unilever PLC Comm | 21.71 | 2.96 |
| 39.65 | 35 | $44.91 | $1,513.05 |
| NSRGY | NESTLE SA REG SHR | 19.11 | 3.2 |
| 68.69 | 30 | $65.31 | $2,049.00 |
| GE | General Electric | 17.53 | 3.04 |
| 23.39 | 65 | $46.80 | $1,529.45 |
| ADP | Automatic Data Pr | 23.79 | 2.37 |
| 61.65 | 25 | $41.50 | $1,746.25 |
| K | Kellogg Company C | 25.42 | 2.71 |
| 61.52 | 25 | $43.75 | $1,611.25 |
| KO | Coca-Cola Company | 21.94 | 2.49 |
| 38.83 | 40 | $41.80 | $1,689.60 |
| RTN | Raytheon Company | 11.71 | 3.07 |
| 57.04 | 20 | $41.00 | $1,334.60 |
| RCI | Rogers Communicat | 13.65 | 3.46 |
| 51.06 | 30 | $48.69 | $1,390.50 |
| GPC | Genuine Parts Com | 19.79 | 2.47 |
| 77.06 | 20 | $40.44 | $1,628.00 |
| TSCDY | TESCO PLC SPONS A | N/A | 4.05 |
| 17.98 | 70 | $49.63 | $1,212.40 |
| APD | Air Products and | 16.87 | 2.79 |
| 85.71 | 15 | $39.45 | $1,408.95 |
| GSK | GlaxoSmithKline P | 19.27 | 4.45 |
| 52.16 | 30 | $70.38 | $1,589.10 |
| WMT | Wal-Mart Stores | 15.04 | 2.27 |
| 79.25 | 20 | $34.72 | $1,546.20 |
| BTI | British American | 17.81 | 3.67 |
| 114.6 | 13 | $53.82 | $1,466.53 |
| CHL | China Mobile Limi | 10.5 | 1.98 |
| 55.32 | 25 | $26.33 | $1,330.50 |
| mmm | 3M Company Common | 17.41 | 2.22 |
| 110.27 | 15 | $36.75 | $1,654.05 |
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| $1,718.95 | $54,474.58 |
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| Average Yield | 3.16% |
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| Yield On Cost | 3.49% |
