November 2017 Investment Ideas

There were no huge movements during the last couple of days, therefore my watch list mainly remained unchanged. At the same time, I didn’t only add a new company to the list, but even made a small purchase in it. Find out the details below, together with the updated data of my watch list.

IBM

Dividend Yield: 3.96% vs 2.78%

P/E: 12.47 vs 12.13

Payout Ratio: 48.49%

Nothing much has changed here. There was a sudden hike in the middle of October, but now it’s back around $150. The attractive thing in the stock for me is the 4% dividend yield and the below 50% payout ratio.

Target

Dividend Yield: 3.94% vs 2.92%

P/E: 12.43 vs 17.12

Payout Ratio: 48.58%

Very similar metrics like IBM, but on a P/E basis historically Target seems more undervalued. During the last few weeks the share price went down and then up again, so effectively nothing has happened.

Brinker International

Dividend Yield: 4.15% vs 2.39%

P/E: 12.4 vs 17.77

Payout Ratio: 51.47%

Not many people seem to talk about Brinker, but I’m a faithful investor for a few months now. The share price finally shows some signs of life. $33 was a resistance during September and October, but now it has broken through. I’m quite excited about the next few months.

Kinder Morgan

Dividend Yield: 2.83% vs 4.58%

P/E: 3.55 vs 157.5

Payout Ratio: 89.29%

The share price is near its one year low, which is quite strange for me. The only reason why I would sell my shares is if the promised dividend increase plan would not be realized. Until then I patiently wait and collect the dividends.

General Mills

Dividend Yield: 3.64% vs 3.00%

P/E: 19.1 vs 21.32

Payout Ratio: 69.18%

The share price has started to increase and its sad in a way that with every extra dollar it is getting less attractive for me. I would really like to add GIS to my portfolio and at these levels I still would. However around $56-57 I would think twice.

L Brands

Dividend Yield: 4.83% vs 2.7%

P/E: 14.61 vs 19.85

Payout Ratio: 70.59%

This definitely has been the star recently from my watch list and I’m so disappointed I couldn’t buy some shares below $40. Historically L Brands is still undervalued, but similarly to GIS, with every extra dollar it seems less appealing. If it continues to soar, it might be removed from this list.

Prospect Capital

Dividend Yield: 12.08% vs 11.38%

Price/NAV: 65% vs 95%

PSEC is a new addition to the list. Not only an addition, but last week I even bought 50 additional shares to my portfolio. I was not planning to buy any shares for a while, but a few hundred dollars have been accumulated on my investment account from dividends and I decided to use it for a small purchase.

Why did I chose PSEC? Definitely not because of the dividend cut. Also not because of the high dividend yield by itself, which is normal at business development companies (high risk, high reward).

The main reason was the fact that the company is traded only 65% of its net asset value. This is extremely low and it shows that unless they need to make significant write offs, the current share price is a bargain. I’m expecting that the company will be trading around $7 soon.

What do you think of PSEC and which companies are in your watch list?

 

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Disclaimer: This post or any other information on the site is not intended to be and does not constitute financial advice or any other advice. I am solely sharing my idea, plan and progress on financial independence and early retirement.

 

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8 Comments

  1. Mr. Robot November 14, 2017
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    • Roadrunner November 17, 2017

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