Recent Stock Purchase – December 2014

With oil grabbing the headlines on a daily basis, hitting new lows and taking down every energy name listed on the exchanges, I wanted to highlight some new purchases I made that are not in the oil patch. As I have stated before, I’m not against owning the energy names I just prefer a little less volatility in my portfolio. With that being said, I’d like to share my recent stock buys.

 

I have added to my taxable account 66.7080 shares at $25.43 for a total investment of $1,696.05 in General Electric Company (GE). With this recent purchase my taxable account holdings in GE now totals 153.6090 shares for a value of $3,937.00.

 

I also have added to my taxable account 12.1611 shares at $40.79 for a total investment of $496.05 in Bemis Company, Inc. (BMS). With this recent purchase my taxable account holdings in BMS now totals 23.5991 shares for a value of $968.51.

 

While I’m sure everyone is very familiar with GE, not many dividend growth investors are familiar with dividend aristocrat BMS. BMS manufactures and sells packaging products all over the world for food, medical, pharmaceutical, personal care and electronics. Basically, if you ever unwrapped a candy bar, pulled open a foil lid from your yogurt, opened a bag of salad, ripped open toilet paper or paper towel over-wraps or ate a frozen dinner you used a BMS product. These are the types of companies I just love. The ones you never hear about, yet everyone uses their products every single day. With a relatively low payout ratio of 47.2% and a growing dividend for over thirty years, BMS is definitely a stock worth considering for any long term dividend growth portfolio.

 

What do you think about my most recent purchases? Is GE and/or BMS in your dividend income portfolio? Please let me know below.

 

Disclosure: Long GE, BMS

36 thoughts on “Recent Stock Purchase – December 2014

    • Hi John,

      Thanks for sharing your position in GE. It’s really a great long term stock now that a lot of its weight has been shed over the years. The media business has been divested along with its main finance division and earlier this year the low margin appliance business was sold. This, no doubt, has created a leaner more focused GE going forward. Thanks for stopping by and commenting.

  1. I like GE here, it is still around where I picked up my last purchase of shares. I don’t think you will regret this decision for years to come.

    Everytime I swing by here I find a company I hadn’t heard of (or never bothered to look into). BMS is one, it sounds like it may be a good company to own. Packaging isn’t going anywhere. Time the throw that on the future research list, for the end of the month!

    Take care!

    • Hi ILG,

      I happen to agree with the future prospects of GE. It’s a company that is definitely on the right track after divesting some non-core and low margin businesses. BMS is another interesting small company that has a very long dividend raise history. I haven’t added to my holding in BMS in a long time as the stock price seemed to continually go higher. Sometimes, you just have to take a plunge and place a buy (albeit small) order. Thank you for stopping by.

  2. DH,

    I love the GE buy especially since the dividend increase is expected anytime this month. I hope they quickly get rid of that darn GE capital. Every time I look, GE capital is in some sort of legal trouble with US regulators.

    I’ve heard of BMS before but couldn’t decide between them and SON. For some reason I never pulled the trigger on either one (the investor paradox). Both are great companies in a low Beta sector. BMS will see greater coverage in South America and China in the coming years with the rising middle class. Combine with buying back 2% of their stock since 2010, I see BMS more of a capital gains stock and less as a dividend powerhouse in the coming years (here’s hoping I’m wrong).
    The Broke Dividend Investor recently posted…DIVIDEND INCREASE: HASIMy Profile

    • Hi TBDI,

      A four star rating by Morningstar and great current yield make GE a less risky stock to pick even at current levels. Of course, I held GE through its dividend cut and price decline of the financial crisis and as most of us here know we are truly investing for decades out so I expect to be happy with this addition years down the financial road. GE Capital is still a much smaller operating unit compared to Synchrony Financial (SYF) which was spun off earlier this year. Couple that fact with the sale of GE’s appliance unit this year and the divesting of its media assets earlier and you have a leaner more focused company.

      Regarding BMS, I agree that growing international markets will definitely help keep the company afloat going forward and though dividend increases might not be as robust as in years past, there is enough free cash flow to continue to cover and raise dividends going forward. Already raising dividends for over three decades I am confident that this trend can continue. Though a long time holding of mine, BMS is one of my smaller positions and not considered a core holding. As always, I appreciate your comment.

  3. DH,

    Nice buys! Like many I’m a GE owner and hope to add at some point, preferably under my cost basis.

    As for BMS, it has been on my watch list for the better part of six months but I don’t own any. Yet, anyway. Their stock price has been in a tight range for the better part of two years so I’m in no rush.

    I was hoping to take most of December off from purchases. However, today’s action got me looking at a couple names I might want to add to that I already own, including: GE, COP, INTC, T and VZ.

    I’ll continue to monitor 🙂

    Best,
    DWC

    • Hi DwC,

      Sometimes you can’t always wait to buy a stock under your cost basis. Believe me, I know the feeling of averaging up on a stock purchase rather than averaging down in price but you may not get a chance for many, many years to add additional shares if you wait to average down especially for a stock that has experienced a great price appreciation. Most of us here invest for rising dividend income instead of price appreciation and if that’s the case then it shouldn’t matter much if your are averaging up or down in purchase price.

      BMS is a name that doesn’t get much attention from the dividend bloggers. Not sure why since it has a very solid dividend history. It may not be the cheapest stock on the block but relative to historic PEs it’s below averages.

      Thanks for sharing your stock considerations as well. I guess form your list I prefer GE and COP the most. Appreciate you stopping by.

      • DH,

        I only eye “under my cost basis” if it’s already close and the general market trend is headed south. Even more so I’m looking at yield and trying to maximize it with a purchase.

        The cash I have on hand was burning a hole in my pocket and I made a purchase this morning. Ironically it wasn’t any of the five stocks I listed above. Or oil. It was a new initial position for me: CAT.

        Best,
        DWC
        Dividends with Children recently posted…Dividend Hike: I Got a Raise!My Profile

        • Hi DwC,

          Thanks for the explanation. I too try and look at yield as a primary reason for buying a dividend growth stock but it is not my only metric. I own BCR which is a great long term dividend raiser but notoriously low yielding.

          I have to say I like your CAT purchase. It has been in my portfolio since the very beginning and is one of my larger holdings. I have not added to it in a while but when the value/price is right I surely will. Thank you for sharing your recent buy.

  4. I’m a holder of GE.

    BMS seems a bit expensive here. It’s trading at 17-18x earnings (its 5-yr average is 16). It’s dividend growth the past 5 years has slowed substantially. I’m also curious if ti can meet an ongoing growth rate of 9%. History doesn’t suggest it can maintain that rate.

    • Hi Adam,

      I think many of the dividend growth bloggers have a GE position, if not make it a core position in their portfolios. I think it will be a great long term holding going forward looking at a time horizon measured in decades.

      While you have a point about the recent dividend growth rate of BMS, I do fully expect to see dividend raises going forward for the foreseeable future albeit more modest. No matter, the free cash flow and payout ratios all suggest future raises and that’s what will make me happy regarding the stock. According to Morningstar, the five year average PE of BMS is 19.3. This makes the current PE less than industry peers and the S&P.

      As you can see from my portfolio, BMS is one of my smaller positions and has been added for low beta stability as well. I appreciate you stopping by and commenting.

  5. DivHut, can’t cite you for buying GE, as I’m a shareholder as well. I think they are a great long term investment for certain. I admit I’ve never heard of BMS, but it sounds like exactly the kind of company I like. The pervasive sort that are part of everyone’s life, whether they know it or not. Good call, I’ll have to research them. Cheers.

    – HMB

    • Hi HMB,

      I guess these two recent buys of mine can fall into two categories judging by the comments. One, GE, is very well known and popular and is in many dividend growth portfolios and the other, BMS, is less known but still a great long term dividend payer. I think BMS is worth considering at the very least. It is not a core holding in my portfolio rather added as a small position for added diversity and as another small source of dividend income. Thank you for sharing your thoughts.

    • Hi FtFF,

      It seems that BMS has made the watch list of several of the dividend growth bloggers but not into many portfolios. Happy to bring it back to your attention. I’m aware that its dividend growth may not be phenomenal going forward but I still expect growth for many years to come as the company can still afford to continue raising its distribution. Thank you for stopping by and commenting.

    • Hi FF,

      I held onto my GE shares even after the dividend cut of the financial crisis. Stupidity? Or perhaps just shows my long term conviction in the company. There’s no doubt that GE is a much leaner and focused company than in recent years. Having shed its main financial unit, low margin appliance unit and media assets the future of GE looks good and with a generous current yield I’m happy to get paid to wait. BMS is another great long term dividend payer but not a core holding in my portfolio. It is a very small part of my overall holdings. Looking to add another dividend stock before the year ends I’d look for something that can be a “core” holding instead. Not that there’s anything wrong with BMS. Thank you for commenting.

    • Hi R2R,

      I may continue to add to my GE before 2014 is over. Like you, and other dividend bloggers, GE seems to receive a lot of love and I can see why. They are doing many correct things, especially in the last year selling its low margin appliance unit and doing a spin off of SYF. My other buy, BMS is another great long term dividend payer and has only gone up since I first mentioned it a while back in my blog. While being a very small part of my overall portfolio I still enjoy the dividends and added diversity it gives my portfolio. As always, I appreciate your comment.

    • Hi Tawcan,

      Happy you agree with my purchases. At least I seem to be doing the right thing. Both GE and BMS I like long term for different reasons. I think GE will continue to provide above average dividend increases going forward while BMS will grow their dividends as well just at a slower pace compared to GE. Of course, the two companies are very different and both occupy different spaces in my portfolio. One, GE is a core holding while BMS is there for added diversification and a much smaller holding. Thank you for stopping by and commenting.

  6. DivHut,

    Like GE quite a bit. I have a fairly decent position in the company and am always looking for an opportunity to add.

    Not sure about BMS. Love the business, but not the stock. Morningstar has them as overvalued, and I’d concur. The dividend raises over the last decade have been less than impressive, especially considering the yield. Dividend raises in the 4% range will keep you ahead of inflation, but not much. I generally like to look for 10% returns, and this just wouldn’t work. But I wish you the best of luck with it!

    Best regards.
    Dividend Mantra recently posted…I’m Already Financially IndependentMy Profile

    • Hi DM,

      Well at least we are on the same page with GE. I may make another GE purchase this month if the price remains near $25. Regarding BMS, I agree with you and have commented to others that I expect future dividend increases to be moderate at best. Dividend raises should continue and that will continue to make me happy. I also own several low dividend growth utilities but at least they have a higher yield. Nevertheless, BMS occupies a very small portion of my portfolio. It is my third smallest position out of about forty stocks so it is not my largest dividend producer. At least BMS had a good day today rising over 4% after an analyst upgrade. Of course, we are on this journey for decades and I know these moves are insignificant over the long haul. As always, I appreciate your comment.

    • If you look at the dividend growth and stock price BMS is far superior to GE over the long term though. GE cut the dividend massively in 09 and still has not recovered. It’s going to be years before it’s back to where it was before then. What did BMS do in 08-09 ? It raised the dividend. Over the past 10 years BMS stock and dividend growth have both out performed GE by a long shot. Just wish BMS starting yield was higher.

      • Hi Twinkienator,

        I know many might come to the conclusion that BMS is overvalued, especially since its run up this week alone, but your comment simply makes the point that sometimes you have to pay up for quality. I know this concept is talked about a lot among the dividend bloggers who sometimes buy stocks that may seem overvalued at first glance but realize that sometimes quality costs a little more. Your point about raising a dividend versus the GE cut during the financial crisis highlights this. Sometimes picking long term dividend stocks is part art and science. Numbers can certainly paint a very good picture of a company but doesn’t always tell a complete story. Thank you for commenting.

  7. DivHut,
    I am not sure on either at the moment. Both are on my watch list and GE is getting more interesting as it drops ($25.27 today). I have a FMV on that at $26– so its below that— but I think its needs to be lower considering the yield. That’s just for me. Plus, I don’t think its a CCC member yet? Maybe it is, I know its close, but if its not, I judge it a bit harder and try to limit my portfolio on those. I need more of a discount to FMV on those. Example, the only two stocks I own not on the CCC are RDS.B & BP—and I am loading up at the moment on those valuations. If GE gets below $25, I will consider. Good buy long term tho.

    The BMS buy confuses me. You mention not many people would know about this stock, I don’t think that is true. This is a Champion as you point out. There are only 105 of those. All DGI-ers should have this on their watch list. I do. However, like DM stated above, I think its overvalued at this time and my buy zone is $36-$38 range. Yield on this is 2.6% and the last few years dividend increases have been 4%. That’s OK, but I don’t think it commands a premium.

    I am watching both, but I think this is the time to load up on Big Oil which is what I have been doing. Great Site. Thanks.

    • Hi Mike A.,

      I still think that GE is a great long term buy even around $25. As you mentioned it might not be that much below FMV but over the next ten or twenty years I doubt that quibbling over a dollar or two in stock price might make that much of a difference. I just wanted extra skin in the GE game and the yield is sufficient for me to get paid to wait. I do like your BP buy. I recently added it to my watch list and have to admit that the yield is very, very tempting.

      For a stock that has such a long dividend raise history and from the comments I have read I do find that BMS is still very much under the radar for many of the dividend bloggers. A few have it on their watch list buy many have commented that they never heard of it. Regardless, while it may seem a bit overvalued, even more so in recent days as it has gone up almost 6%, it is a very high quality company that does command a bit of a premium. Not necessarily because of its dividend growth rather because of its consistency through good and bad times such as during the financial crisis where BMS continued to raise dividends even when many were freezing, cutting or eliminating them.

      Thank you for stopping by and commenting and I’m happy you are enjoying the site too.

        • Hi Mike A,

          When I first built out my portfolio I started with the aristocrats and champs. I think anyone just starting out should just focus on aristocrats first. Curious to see what you’ll be buying.

  8. DH,

    Long GE as well. I see a ton of upside there in the long run and I hope their rebound success continues now that they’ve picked themselves up. I am not long on BMS, but I like what they do. They do look a little overvalued, but the fact is their products will be used for a long time.

    Both are stable, and as you said it is nice to add some stability – even if it is paid for with a little bit of a premium. Hopefully BMS will accelerate payouts over the next few years and you get a lot of bang for your buck.

    – Gremlin

    • Hi DG,

      I think many are liking GE more in recent months than in recent years. As I have commented to others, a GE without media assets, major financial arm (SYF) and most recently divested of its low margin appliance business makes for a leaner, higher growth, higher margin producing company. GE is one of my larger holdings especially when compared to one of my smaller holdings, BMS. While many see it as slightly overvalued and a tepid dividend grower at best, it is, in my opinion, a very solid high quality name. Usually, those types of companies command a bit of a premium which I am happy to pay up (to a point, of course). Out of about forty or so stocks in my portfolio it is my third smallest and by no means a core holding. It is added simply for extra diversity for the time being. Thank you for stopping by and commenting.

    • Hi DDI,

      Going forward I think the GE story is much different than prior to the financial crisis of five years ago. GE did not stop paying a dividend during that time they just cut it drastically. Because cash was king during the financial crisis GE had to cut its dividend to 10 cents a share per quarter from 31 cents to conserve cash. So even, during the darkest hours of the financial crisis a dividend was still paid out. Since then, GE has spun off its major financial arm (SYF) and sold its low margin appliance unit to Sweden’s Electrolux. This makes the company much smaller and more focused on higher margin businesses such as locomotives, medical equipment and more. GE has also been raising its dividend since its major cut several times the past few years. Currently, I feel the dividend is safe which is why I made my current buy. Of course, as you know, even the “safest” and largest companies can fall during harsh financial climates and that is why we diversify our portfolios. Thank you for stopping by and asking your question.

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