First let me start off with how amazing this month has been for the market! I haven't seen gains like this in the market ever and I'm most definitely loving it! It is very encouraging watching my stocks take off and watching the investment gains go through the roof along with my dividend income! now without further ado.
I have been watching two companies very closely and have done a great deal of research into which company I wanted to put my hard earned cash to work for me. The two companies I have had my eye on lately are Procter and Gamble and Kimberly Clark. After doing some due diligence and monitoring the stocks after a few months I have decided that KMB is my choice!
Kimberly Clark was started back in 1872 and is a very well established company that has been increasing it's dividend payment for the last 43 years. This is a very dependable company due to the products this company produces and sells. They are known for their product names such as Cottonelle, Depends, Huggies, Scott, Kleenex, Pull-Ups and Kotex. They sell a lot of daily use household items which translates into a reliable dividend payment.
Their are many reasons I chose KMB over PG as my choice of a consumer household goods stock. The first reason is the dividend payout ratio. They both have relatively similar dividend yields but the main difference I see is that PG's payout ratio is at 68% where as KMB is at 61%. This lower payout ratio translates into an increased ability to comfortably grow it's dividend payment.
The second reason is the stocks current price. KMB is trading at a relatively low level in relation to it's 52 week high. This represents a very good upside potential as long as profits and earning expectations are meeting or exceeding earnings estimates. I personally enjoy purchasing into a stock on the lower end as it provides more of a safety net to loses vs the chance of the stock increasing.
The third and final reason is the track record for which both companies have increased their dividend payments. PG has only increased it's dividend payments per year by about 2% for the past 4 years straight. KMB on the other hand has grown it's dividend payment per year by about 4-5% on average. This obviously is also a very nice position to be in because overall dividend growth and reliability are the overall goals of any long term dividend investor.
Here are a few of the statistical numbers that make me love this company.
Dividend Yield 3.21%
Annualized Payout $3.68
Payout Ratio 61.3%
Dividend Growth 43 years
Free Cash Flow 1.25 billion
I purchased 8 shares of KMB at the price of $114.58 a share. This will affect my expected annual dividend income to the tune of $29.44 per year! With this new addition my portfolio now generates $873.45 per year! This gets me super excited to see this number grow and get closer and closer to the $1,000 mark!
Not only have I beat my investment goal for the year, but my dividend income is now $73.45 over my annual income target I set for myself this year! Its encouraging to see this number slowly grow higher and higher with every purchase I make!
Deciding to track and blog about my investments has really been a big motivation factor towards the success of my financial en-devours! It really encourages me when I'm able to look back at my progress and slowly watch my money grow and my annual dividend payout increase!
I get even more excited when I find out about new companies that meet all the criteria I check for before I decide to purchase into a company. I have been doing a lot of research lately into stocks that Will help me diversify my portfolio and I'm super excited to have found a bunch of new companies I'm getting amped up about.
I'm looking forward towards the rest of this year and I'm happy about the prospects of my Independence fund into the year 2017. I have a lot of amazing companies that I have my eyes on and I'm very excited about diversifying my fund even more with amazing purchases.
KMB is another great stock that I'm proud to add to my holdings and I'm looking forward to adding even more capital towards this amazing company down the road.
Hopefully everyone else is having an amazing month so far and are making some great purchases!
Image courtesy of renjith krishnan at FreeDigitalPhotos.net