Monday, July 20, 2015

Recent Buy: Ventas



On Monday July 20, 2015, I added 16 shares of Ventas at $64.00/share to my taxable account. I'm doubling down on my earlier conviction. 

Rationale:

1) here is Roadmap2retire's article on seeking alpha article

2) Constant FFO growth, constant dividend growth, and the payout ratio is actually going down.


3) Increasing Healthcare cost 

 
4) Increasing aging population 


5) Increasing number of insured people under the ACA. 


6) But I am more interested in their Hospital assets. Many of my co-workers have stated that their doctors are doubling or sometime tripling their appointments. Meaning 2-3 people are scheduled for the same doctor at the same time. After Ardent, I see Ventas making further move in the hospital business. I believe a bubble will be created from the elderly care sector. Once all the boomers are gone, will the OHI, LTC, etc's facilities be replenished with generation X? Will there be that many gen X to fill up all the facilities? I don't know. It's nice to have diversification and not have all your eggs in one basket.  


7) Spinoff. Ventas is spinning off its skilled nursing facilities. I had an interesting talk with a few boomers co-workers the other day. Some have 401ks and pensions to live off but many do not. I asked them how they will survive after 65. Many said they were going to fake illnesses or dementia to enter long term care or skilled nursing facilities. Apparently, medicare will cover these two and will also cover senior housing if staying at a senior housing was due to some medical sickness. I'm not going to argue the ethics of this but their plans do work...Ventas is going to have a huge tailwind.   


8) Fundamentals 
  • Debt to total cap: 32%
  • 10 year annual growth of 9% (note VTR froze dividends during the 08-09 meltdown but did not cut dividends)
  • Since 199, CAGR 29%
  • 10% FFO growth since 2000.
  • Est 5% FFO growth in 2005 + 10% dividend growth after spinoff.
  • Dividend payout ratio of 67%
  • Currently trading at fair value



I consider their buy to be a "full" position in VTR. I won't make any more buys the rest of the year unless something drastic happens. My forward 12 months dividend stands at $1,821.99 + FCISX dividends.

My next buy will be in 2-3 weeks. I'm looking to load up on some consumer staples like ADM, KO, PEP, PM, MO, HSY, etc. Or I might just make a loyal3 buy. Let's hope for more volatility until then. 

Thursday, July 16, 2015

Dividend Increase: KMI and OHI

KMI increased its dividend from .48/share to .49/share resulting in a 2.1% increase. 

OHI increased its dividend from .54/share to .55/share resulting in a 1.9% increase. 

Seriously, where is the OHI love? Everyone blogged about KMI but no one posted about OHI.

Loyal3 Buy 

I bought $10 worth of HSY on Loyal3. I found $10 in my pants this morning. This is a new position in HSY.

Wednesday, July 15, 2015

Recent Buy: NSC




Chugga Chugga Chugga Chugga CHOO CHOO. I had a toy train set as a child...but I had to give it away because my family was too poor to buy the batteries. On Wednesday July 15, 2015, I bought 11 shares of NSC at $87.70/share for a total of 971.70.

I've been scanning the market for deals and the railroad companies have been beaten down lately. It went down between UNP and NSC. I bought NSC for the higher yield and more shares.  Dividend Diplomat has a great article on why you should buy NSC. Link here

I have been learning how to calculate DDM so below are my quick and dirty math. I'm still working on how to calculate DCF.

Dividend Discount Model

Dividend Growth rate over 5 years=11.3%
Dividend Per share=$2.36
Discount rate= 14%

Equals a fair value of $87.41.

S&P has NSC at 4 stars buy with a fair value of $105.60 with a 12 month target of $120.00.


LOYAL3 Monthly Buy

My automatic monthly investments. 

$10 KO
$10 K
$10 WMT
$10 WMT
$10 SBUX
$10 KHC
$10 UL

My 12 month forward dividend stands at $1,766.75+FCISX dividends. I get paid this Saturday. I'm tempted to buy 11 more shares.

Wednesday, July 1, 2015

June Result + Recent Buys


June Result

June’s Dividend

ESV- $1.35
CVX- $20.33
COP- $5.11
TROW- $6.76
JNJ- $25.5
MCD- $8.50
AFL- $6.63
UL- $12.76
ORI- $6.48
GILD- $4.73
LTC- $3.57
K- $2.97
WMT- $0.93
FCISX- $22.64
Total: $128.26


Cash flow


Salary
$2,919.88
Dividend
$128.26
Interest
$7.86
Total
$3,056.00

Deductions


Gas Bill
$40.46
Electric bill
$113.37
Water Bill
$114.33
QT
$51.32
Discretionary
$537.14
Car payment
$435.45
Total
$1,292.07


Calculation

% saved
57.72%


Wealth Check

Bank
$2,318.25
Capital One 360 Bank
$2,795.52
Scottrade Tax
$33,830.42
Scottrade ROTH
$1,811.01
Loyal3
$5,426.50
401k
$14,043.00
Edward Jones Roth
$6,271.26
Total
$66,495.96


Recent Buys

10 shares of JNJ at $98.00 for a total of $987.00 and I fliped 1 share of KO for $39.40.

Forward 12 months dividend stands at $1736.56 + FCISX distribution.

Stock news
  1. CORR bought a new pipeline and increased dividend from $0.135/share to $0.15. I will receive $44.00 every 3 months. I can basically buy a share of KO every distribution.
  2. BAX split into two companies. Scottrade has yet to issue my new shares or adjust BAX cost basis. According to Scottrade, I lost $2,000 in one day.
  3. KRFT finalized its agreement with Heinz. My special dividend is coming any day now

My goals for the rest of the year:
  1. 100 shares of KO
  2. 50-60 shares of JNJ
  3. 20 shares of PEP

See you in 2 weeks for my next buy.