Thursday, July 28, 2016

Recent Buy: KO



Just bought $1004 dollars worth of Coke on July 27-July 28 ($500 a day) in my loyal3 account. This adds 23 or so shares into my total fund.

Quick rationale

  1. KO revenue declined 5% and the market punished it with a 3.5% dip.
  2. Looking into the earnings closer KO volume grew in all places but Eurasia/Africa where it declined 1%.
  3. K revenue declined not because people aren't using their products but because of being an international company. Latin america revenue decline -20% and Eurasia/Africa declined -10% due to forex.
  4. So technically KO would be making more revenue if
    1. the US dollar was to go down; or  
    2. the value of other countries money went up.
  5. But that's the life of an international company. 
  6. KO is trading at a premium but it has the same P/E level as when I bought it at $38.50. 
Forward dividend stands at $3293.64 + SCHD distributions.

I'm looking at FLO, RAI, and TIS for my next buy. Any suggestion would be helpful. Back to slavery...i mean working for peanuts. See you soon.

KO is now 5.5% of my dividends received. I'll hold off on a bigger drop before adding more. I want to diversify a little bit heading into the recession or depression or Armageddon or whatever. 

Portfolio page updated. you know the disclaimer don't trust anything I say.

8 comments:

  1. KO is one of my largest positions as well. You can't go wrong with this purchase. Thanks for sharing.
    D4s

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    Replies
    1. hey D4s. KO is my biggest stock behind JNJ. I hope to someday build this into 300 share stock

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  2. I've noticed that most of my reliable dividend growth stocks are a core holding of consumer stables. Of those on your watch list I would recommend FLO and RAI. FLO has moved back a little this week and releases earnings next week so worth following closely.

    Disc: Hold FLO

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    Replies
    1. hey Mike, I might just buy FLO into the earnings. People don't like FLO being the steady eddy and want a huge pop but I love those old reliable stocks I don't have to worry about. thanks for visiting

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  3. Why is TIS on your watchlist? The last dividend increase was 3 years ago...

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    Replies
    1. Hi Jan, TIS just had a huge pullback from its earnings. You're correct that it's dividends was increased 3 years ago but it's sporting a safe 4.5%-5%. Imagine if you bought KO at 3.25% it would take more than 3 years for your YOC to even equal one year of TIS. Plus I have big hope for TIS. they are making good positions into the consumer paper industry. Management are financial guys and not pie in the sky ceos. I like them for their future bumpy growth whereas I like KO for its stable-ness. TIS can't raise dividend until both their 2 new plants are online which is anywhere between late 2016 to mid 2017. When they go online then you'll see the dividend growth start.

      I know that was chaotic so to summarize TIS has a bright future that includes dividend growth. It has issues and is volatile but management are bright CEO financial guys with years of experience under their belt to guide this odd paper factory.

      hope that helps

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  4. Used to own KO and loved it. Now I guess I own it in my mutual fund, but it's not the same! :) Good work!

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    Replies
    1. hey dude, you gotta own some KO. Why pay a guy to own it when you can just do it yourself?

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