It has been a busy few weeks for me. I'm sure it hasn't just been me with the holiday and such. It has also been a relatively slow month in terms of investing and also dividends received. After my last sale of GME which has been one of the worst purchases ever, I had some extra capital waiting around that I was waiting to put to work for me.
I was really holding onto this money and waiting for the right opportunity to really put it to work. for those that recall I wrote an article about how I'm going to be trying a new technique where I hold on to some extra capital that I will waiting to use for the right opportunity. I have had so many moments where there was a stock I was watching and a dip would happen which creates a great entry point which I was never able to capitalize upon because I didn't have extra money to invest.
I'm happy to say that I have used my opportunity money a little quicker then anticipated and I was able to take advantage of a great addition to a current one of my holdings. QCOM has had a rough week and last Thursday the price was particularly beaten down by about 4%. I was able to make a great addition of 16 shares at the price of $53.06. This boosted my Annual Dividend income by $36.48 I personally really love this company out of all the dividend paying tech companies around. The company is also on its way to becoming a dividend aristocrat with only 11 more years to go.
A few facts that have really made me love this company and wanted me to add to my current position was the dividend growth rate, the free cash flow, the amazing current stock price and the great amount of technology this company has been pumping out for the mobile industry. A lot of insider buying has also occurred around the current share price which is typically a good sign of confidence around management knowing that the price is stable at these levels and thus making it a great entry mark.
Over the past 3 years the company company has managed to grow it's dividend payout by a whopping 19.3%!!! This is a truly amazing feat for any company to do and It definitely sits well with me. The company also still has an amazing amount of free cash flow left in the tank even after their latest $815 million arbitration they owe Blackberry. I also expect that the company will beat the consensus estimate and will increase their free cash flow holdings by 1 billion on the next quarter.
I'm personally going long on this company and I know that they will continue to increase dividend payouts year over year. I also personally think that anything under the $60 mark is a steal. If I currently had more capital I would be loading up even more on these most recent dips. I'm also super excited about the merger between them and NXP semiconductor. Once its all finalized this company is going to be a power house for dividend payments.
The next reinvestment I made this month was Ford. I purchased 89 shares at a price of $11.26 per share. This increased my annual dividend payment by $53.40. This is one Investment that I have been on the fence about keeping recently. I have had mixed feelings about this company in regards to dividend payments but for now, it definitely makes sense for me and my portfolio. Although the company failed to increase their dividend payment last year, the yield is still amazing at a current rate of 5.72%. They have faced a lot of head winds and the share price for the company is currently undervalued in my opinion. This is one of the major reasons I got into this company. Ford is 19% away from it's 52 week high and it is just barely licking the 52 week lows.
I personally don't see any reason why it is this low despite the strengthening US dollar. I do understand that auto sales are declining but that happens in any retail business and especially with the auto industry. But that fact at hand is that the company is still generating a massive amount of free cash flow per year and they are also still selling a massive amount of vehicles per month. I also like how the company is future proofing itself and investing a lot of money into company acquisitions and research in regards to electric vehicles and auto pilot initiatives. This is clearly the direction that the auto industry is taking and Ford is really setting themselves up for success. They also build the best trucks in my opinion.
I personally feel that a lot of these expectations are actually due to how popular and in high demand the F-150 truck has become for Ford. The F-150 is responsible for a good portion of the sales growth that Ford has seen and it is also responsible for a nice chunk of free cash flow. The problem with having the best selling truck to investors though is sometimes they have higher anticipations then what they should. Yes auto sales are slowing but that doesn't mean that this company is hurting by any means. We are seeing a sales decline in the US across the board in all Auto companies but Ford has positioned them shelves very nicely in respect to it's sales abroad.
Although the company failed to increase their dividend payout last year they still are paying out an amazing percentage and as long as the company keeps it within the 5% I will continue to reinvest my dividends and grow my position. However, if for any reason the company cuts it's dividend payouts under the 5% mark I will most likely be looking for a new position to park my capital. (Pun Intended) I'm starting to view Ford more and more like an income investing stock as opposed to a capital growth stock these days. I'm going to be sitting tight for now and continue to reinvest those dividends. If all goes well I could also see this company maintaining it's special dividend payouts as an annual bonus to the company sharing in their success to it's share holders. Although I would rather have solid dividend payout increases I do understand why the company is choosing to take this route.
Ford is definitely a very slow moving stock and I hope to see this one grow as an investment over the years. If the price stays at these levels It will be very hard for me to not want to add more to my position. We can only wait and see as time goes by on how good of an investment choice this company has been for me but all I can say is I'm feeling confident with where I'm at with my current position.
Does anyone have any thoughts or comments about my most recent investments? I'm always looking for feedback and I love others perspectives.
Full Disclosure Long F/QCOM