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Sunday, August 20, 2017

Sometimes the best moves are no moves

I have a little less than $50 in my Robinhood account right now. A combination of dividends and money from a Lending Club account I am phasing out. I have to admit I was ready to pounce on all kinds of options. I had about 7 different ideas of what I could add a share of. With the little dip in the market there were plenty of chances to lower my cost basis. But I had to be honest with myself. The reason I had 7 ideas, was because I didn't really have one. I had scanned a few metrics and read a little on each of them. But the reason I was considering adding a share, was more the desire to add a share than anything else.

But I can't react to every tiny dip in the market. If something isn't jumping out at me, there is no pressure to buy just because I haven't in a while. It's hard because I want my money to be working for me and not sitting in a bank or my Robinhood Account.

What I've noticed about myself is that at this stage of my young DGI career is that I don't panic when it comes to the selling side. If anything I need to learn to sell sooner in some instances. But I can be an impulsive buyer. I'm an impulsive person by nature. So I must constantly remind myself to be more patient and to properly research before jumping in. As long as I'm using Robinhood, I will be making a lot of small buys. But I want to make sure, I'm taking the proper time to think and research and not pouncing on the flavor of the day.

Monday, August 7, 2017

Recent Buy SBUX

Today I grabbed two shares of Starbucks for $55.60 per share. I wish I had more money to spend here. But some car repairs and lower summer salary (because of my family leave), have left me a little tight this month. My new administrative salary kicks in next month and I'm hoping to have more to invest then. This is about a 14 percent decline from it's 52 week high. SBUX has raised it's dividend each of the last 6 years. The yield is a little low at 1.80 percent, but with a 48.3 percent payout ratio there is room to grow. Starbucks is a Morningstar Wide Moat stock with a 4 star rating. Currently 27 of 33 analysts rate Starbucks a buy or Strong buy. The average price target of the 27 analysts is $64.87.

But what I really like about Starbucks is it's ability to adapt it's model. They have traditional stores kiosks, and beverage trucks. They offer premium high end coffee as well as smoothies and new food options. Starbucks has more company owned stores than there competitors and it seems that they are constantly innovating and altering their model. They have rapidly expanded into Asia and have a strong brand recognition. What I see with Starbucks is a decent valuation with room for sustainable dividend growth over the next few years.

Disclosure: Long SBUX


Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.

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