I can’t believe that we’re already almost half way through December where in the world has the time gone? We’ll be on to 2016 in the blink of an eye. I never understood this as a kid but time really does speed up as you get older. Of course that’s why so many of us are working to build up our portfolios to be able to own our time once more instead of slaving away for “the man”.
Unfortunately I’m still at work and even worse is that it’s out in West Texas. Don’t get me wrong there’s some great things about West Texas but working out here is not one of them. For starters it’s about 10 hours from home. And let’s not forget the fact that it takes hours to get to any place worthwhile. But one of the great things about it is that there’s some truly amazing sunrises and sunsets. I snapped the photo at the top earlier this week.
With Christmas just around the corner what better way to spread some Christmas cheer than with some free stock? I can’t think of anything much better. Fellow blogger Ben over at Sure Dividend is offering a drawing for a $100 stock gift card through StockPile for the top 3 ranked Sure Dividend Stocks. That’s $300 total to invest in some of the best companies out there just for joining the drawing. You can sign up for the contest via this link. But hurry because the giveaway ends on December 15th with prizes awarded on December 16th.
I didn’t get quite as much writing done this week as I’d have liked but I did begin to make progress on several posts that are in my very long queue to write. I’m hoping to get at least 2 valuation analyses written up over the weekend and early next week as well as finally completing some of the posts that I’ve already started.
Well this past week was much of the same as far as motivation to exercise goes. They were having a bunch of issues with work which led to me sitting around for about a week, while still getting paid of course so that’s good, but doing nothing really sapped my energy and motivation. My plan is to come up with an actual routine I can do and get on a schedule. I do much better with that than just kind of winging it.
The big news for the portfolio this week came via Kinder Morgan and the huge 75% dividend cut. I can’t lie and say that it wasn’t hard to take, but in the long run I think it’s the best thing for the company and in turn future returns. I’m contemplating whether to do some tax loss harvesting on this or not because I don’t expect the share price to be turning around anytime soon and I’m currently sitting on some huge losses of principal. Kinder Morgan was my largest dividend provider so the cut definitely hurts. My forward dividends were reduced by $336 due to the cut.
However, diversification helps as YUM Brands brought along some much needed good news. Management plans to return $6.2 B to shareholders prior to the split of the company regarding their Chinese operations between October 20, 2015 and the expected close of the split which is expected near the end of 2016. It wasn’t clear if that’s on top of the current dividends and share buybacks or if it includes them. Based on the current diluted weighted shares outstanding of 446 M, the $6.2 B works out to $13.90 to be return per share. That’s an effective yield of 19.4% to be returned over the next year as well as having ownership stakes in both companies.
If we back out the expected dividends to be paid over that time (4 payments of $0.46) that leaves $5.379 B to return to shareholders via share buybacks or special dividends. I couldn’t find the current share buyback authorization amount so that’s all I have to go off of. That leaves $12.06 per share to be returned to shareholders, hopefully via dividends, which works out to an effective yield of 16.8% over the next year.
Returns of $12-14 on a current share price around $71.60 sounds great! Especially since you’d still get an ownership stake in the two companies.
On to the Roundup
In case you missed them, here’s the posts from this past week.
- Church & Dwight Co.: Dividends will Satisfy, but Total Returns look Dirty on Seeking Alpha
- Recent Sell
- Dividend Update – November 2015
- Restarting the Roth IRA
Also, be sure to sign up to receive posts via email and to follow me on Twitter@JC_PIP so you don’t miss anything. I also started a Facebook page to give people another option for keeping up to date on posts and happenings with the blog.
Once again I’d like to say thanks to each and every one of you that read, commented, and shared posts from here this past week. I think this dividend growth investing and financial independence community is amazing and the openness from everyone is awesome. Thanks again!
Now on to the links!
The humility dividend growth portfolio by Dividend Growth Investor
Building your own dividend dream house by Sure Dividend
Recent stock purchase December 2015 by DivHut
We are about to hit the independence accelerator by Financially Integrated
Long term holdings by Income Surfer
The changing landscape of the energy sector by Roadmap2Retire
Santa’s stock portfolio year 2 – Elf sized returns by Retire Before Dad
Goals for 2015 by Dividend Hustler
The good and bad of entitlement in early retirement by Our Next Life
Fail upward by Eat the Financial Elephant
Vanguard accused of dodging nearly $35 billion in taxes by Joshua McKennon
A hidden advantage of happy businesses by The Conservative Income Investor
Dividend Growth: What should you expect in 2016? by Simply Safe Dividends
I hope you all have a great weekend!