Saturday, December 30, 2017

Year End Results for M* Model Dividend Machine Portfolios

The table below presents the results for each of my Portfolios 2011 - 2017.

Thank you for reading.  I wish you all a happy, healthy and prosperous New Year and every year thereafter.

M* MoneyMadam

Wednesday, December 27, 2017

DKS DIcks Sporting Goods a compelling buy

I expected to be on vacation but I checked my messages on Seeking Alpha about my post about Foot Locker.    One of readers was equivocating about FL and suggested Dicks Sporting Goods, symbol DKS.

  • Solid Balance Sheet
  • Revenue Growth of over 9% annually
  • Dividend Growth averaging 12% annually
  • Covered call options with a potential 14% return

DKS is not a perfect parallel to FL but for an income investor, however, it is a compelling buy based on my fundamentals.

Yield is a touch low at 2.29% but dividend growth has been consistently in the 12% range annually.  As an income investor I love that metric.  Quarterly dividend in 2017 is $.17 versus .125 three years ago.

Revenue is growing as well and that is hard to find in a retailer.   Over the past three years revenue growth has been a solid 9.4% annually.   Most recent 4 quarters $8,409 versus three years ago $6,599.   With virtually no debt (D/E ratio is .0028) and a P/E ratio (price to earnings) around 12, I see value and income.

Clearly this stock has suffered as the 52 week high is $56.25 and 15 months ago DKS hit $62.88.  Stock holders have really taken it on the chin with DKS.   

The icing on this cake is the covered call I sold as soon as my buy executed.  See the table below.

DKS has not yet announced their next ex-dividend date, but if history repeats that should be about March 8, 2018 which is before the call expires.   Nice 14% upside potential 

I don't have time to flesh out all the details of DKS with all the graphs that make a post pretty but you can look up the key elements.

Good income investing.

M* MoneyMadam

Disclosure:  Long DKS with calls

Friday, December 22, 2017

Foot Locker FL my last 2017 stock

I completed my 2017 portfolio of stocks I call Dividend Machines today by adding Foot Locker, symbol FL.

  • Foot Locker has virtually no debt
  • Revenue Growth is robust
  • Dividend Growth is solid
  • Covered Calls show potential

I went a touch over my budget of investing $100,000 in 2017.  With the addition of Foot Locker, my basis is  $101,248.20.   Foot Locker stock fundamentals are good as you can see in the table below.

I like their revenue growth and I like the dividend growth.  This area of retail has been challenging but athletic/leisure footwear is making a come back.   In spite of retail challenges, FL has demonstrated steady revenue growth.

Moreover, a few calls are encouraging. Although I am not selling calls against my position today, I find the trend encouraging.   See the February $52.50 and January $50 calls below.

 February $52.50 note there are a low volume of contracts trading today.

January $50 contract volume is much higher.

FL has virtually no debt which is comforting as we enter 2018 and the specter of increasing interest rates. 

Adding Foot Locker makes this very small portfolio a bit heavy in retail but when you are investing with rules, these irregularities are sometimes inevitable. 

This will complete my posting for 2017.  I will be on vacation until mid January.  During this time, I work on analyzing what has gone on in 2017 and determine how I will invest in 2018.

I thank you for reading and encourage you to stay invested using a disciplined strategy.

M* MoneyMadam

Disclosure:  Long FL