Tuesday, February 24, 2015

What to write about when you have no money to invest?

Without any money to invest from January all I could do is screen and learn about some new stocks that came up this month.  It is my hope still to save enough where I can actually invest on a regular basis again.  Part of me wants to start using loyal3 or computershare.com.  Buy for free and sell for free on Loyal3 or for a fee on Computershare.  That way I can continue to invest in some of the strong dividend payers these companies allow you to buy.  The other part wants simplicity and is willing to pay the fee to keep all my money in one place with one tax document.   The third part just reminded me my goal is to first rebuild an emergency fund.  That part is such a downer and is no fun.  The fourth part is my wife who wants me to put any free money into home improvements.  I avoid that conversation at all costs.   The house will hold up and last longer than me.  My time is what I want not a nicer house.

I could go on all day about that stuff but you are probably more interested in what popped up in my screen this week.  It would have been a steal if I had picked it up at the beginning of the month.  Other people saw the bargain and thus the price is creeping back up again and the yield is dropping.

CARBO Ceramics (CRR) came in at #5 in my screen.  The other 4 above were all very interesting but ranged in 5-7 years of dividend increases.  Many had been paying increasing dividends before the financial crisis but cut them for a year before resuming increases.  The last dividend increase for CRR was back in July 2014 so we will see if they can keep the streak alive in 2015 and make it 15 years.  Why might this be at risk?

CARBO Ceramics you would think does pottery or something like that.  Not even close.  They fall under the Oil & Gas Equipment & Services sector.  They make ceramic proppant.  Proppant in terms I understand are a whole bunch of little beads that frackers inject into the cracks to keep them open.  This allows them to keep on widening and lengthening a crack to get to gas and oil reserves.  They also provide other services to the fracking industry which widens their moat (all in one stop and shop).

The risk is in the negative earnings estimates they are forcasting for the current quarter (-0.07).  That is a big difference from the last actual EPS of $.70 for the period ending 1/29/2015.  The other thing to worry about is the free cash flow.  Morningstar has the TTM at -7.  All the other TTM numbers look good regarding value, dividend growth, sales, etc.

Wells are being shut down.  For how long we don't know but oil is finite.  There will be a point when the oil will need to be extracted.  The other thing to point out is that CRR has survived and continued to raise the dividend in other years with cash flow dipping to -20 at times.  However if all wells shut down there isn't much business for Carbo.  On the other flip side the Chairman of the company continues to buy up shares.

I gander (haven't used that word in a long time) if I had some cash I would initiate a small position in CRR.  Since I don't I will keep my eye on it and hope A) the dividend doesn't get cut and B) the price remains near its 52 low so I can make a buy. 

Ever looked at this company?  To risky?

Thursday, February 12, 2015

January 2015 Budget

Month Overview
Not a bad start but could have been better as we went over budget this month by about $60 bucks.  For this year's budget I dropped the 'Needs' budget buy about $300 dollars.  January is my last car payment so for the rest of the year there will be no more car payments.  This was a big victory as I took out a 3 year loan with high car payments.  That part of the budget dropped but I upped the budget for things like auto repairs and utilities.  Is the budget reduction enough to achieve my savings goal for the year?  The budget adjustment gets me 6% lower but my goal is 10% less on 'Needs'.  I guess I need to find something else to cut out.

More, Less or Same as last year same month
Steady consumer of my life
Home Insurance
Almost like life insurance
$240 under budget (no water bill this month
$120 more than last January
$260 less than last year (car repairs)
Car Insurance
If I save $80 a month I will be OK
10 years and I am on year 3
Under budget by $190!
Another year of braces for 1 kid
$320 over as my wife does winter clothes clearance for all kids for next winter
$300 more than last year

Dining Out
Includes my wife's love of expensive chocolate.  This is a good area to reduce.
A couple of birthday parties and next you know you're out $100
Yeah not too proud of that
Domain renewal time and other miscellaneous stuff I buy could cut if I wanted to

Savings & Summary
In the end I did manage to come out ahead by a few bucks.  Enough to save for my car insurance and that is about it.  In the end no money left over to invest this month however I am happy I didn't spend money I don't have.  I will continue in February to target food.  Groceries combined with eating out is my family's #1 expense.  I have taken some measures already as of this writing and will share the results with you next month.

Savings rate for the Month = 1%

Thanks for listening to my story,

Dividend Family Guy

Tuesday, February 10, 2015

January 2015 Dividends

I haven't had any extra cash to invest since October of last year but that doesn't stop the dividend machine.  It is a small amount now and as long as dividends aren't cut and continue to grow it will be a sizeable chunk in like a hundred years.  By then I may be long gone but my kids and maybe their kids will reap the rewards. 

Sometimes I wonder if dividend growth investing is the right model at my age with limited savings to invest.  This year will be another minimal investing year as I rebuild my emergency fund and set aside more money in the budget for expenses such as healthcare costs and home repairs.  This money should be kept separate from the emergency fund as it can be planned for from previous year averages.

January dividends totaled $149.68 .  This was a year-over-year increase of 88%.  This was mainly attributed to the purchase of 3 companies.  I have yet to look over dividend increases to see what amount of new dividends were from reinvesting vs. buying YOY.  If anyone has that calculation easily handy pass it along or blog on it.  I could probably figure it out but my lunch is almost over and that is all the time I have to blog with. 

Below is my slightly changed dividend graph.  I have this and last year by month so I can easily gauge if I am heading in the right direction.  Also updated on my Dividendpage.  One day I may actually break it down by each company and share that with you.  For now it is just the sum of all dividends for the month.

Thanks for reading,

Dividend Family Guy