Wednesday, January 14, 2015

Recent Buys - Microsoft (MSFT), Chevron (CVX), Kinder Morgan (KMI)

Hi Everyone,

January is turning out to be quite the month for purchases!  I said I would probably invest more this month, but who knew I would invest this much.  I currently have a good bit of savings ready to invest and instead of earning 1% in a bank account I thought I would invest some.  Sticking with the theme of trying to add a little yield to the portfolio with reasonable valuations, I bought Microsoft, Chevron and Kinder Morgan which combined give me an average of around 3.75% yield.  I see myself waiting for more of a broad market pullback before investing more, but who knows, January is only half over...

I purchased 43 shares of Microsoft (MSFT) at 46.45.  This purchase adds $53.32 of annual dividends to my account.

I now own 121.365 shares of Microsoft and I consider this position full for the time being.  I bought MSFT because I believe they will have a great upcoming quarter/year.  My tech savvy friends really like the Microsoft Surface, the XBOX seems to have had good sales this holiday season, they are rolling out Windows 10 soon and on a smaller note, they just received a contract to supply TGIFridays with 8 inch tablets.  This works in 2 ways:  make money from TGIF and also the advertising from customers who may ask the servers if they like it.  I see this as a new avenue for growth.  Also, I bought Microsoft before the ex-dividend date so I will not miss any of their payouts this year. The portfolio will be updated to reflect this purchase.

From Google Finance: Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. The Company also designs and sells hardware, and delivers online advertising to the customers. The Company operates in five segments: Devices and Consumer (D&C) Licensing, D&C Hardware, D&C Other, Commercial Licensing and Commercial Other. The Company’s products include operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games, and online advertising. It also offers cloud-based solutions that provide customers with software, services, and content over the Internet. It also offers HockeyApp, a service for mobile crash analytics and application distribution for developers building application on iOS, Android and Windows Phone.

MSFT Chart


P/E:  18.14
Yield:  2.68%
Market Cap:  383B
Dividend Growth Rate (3yr):  ~15%
Payout Ratio: 47%
Years of Dividend Growth:  11 years

I purchased 49 shares of Kinder Morgan Inc (KMI) at 40.75.  This purchase adds $86.24 of annual dividends to my account.

I now own 96.597 shares of Kinder Morgan and I consider this position close to being full for the time being.  I bought KMI because I believe in management and their goal of raising dividends by around 10% per year for the next 5 years.  This will help turbo charge the dividends hitting my account over that time period.  Now that they have consolidated their operations there is potential savings that could help expand their income and help propel the company even further.  They are the biggest pipeline company in the US and even with oil reaching new lows, companies are still producing massive amounts of oil which benefits KMI.  I bought Kinder Morgan before the ex-dividend date so I will not miss any of their payouts this year. The portfolio will be updated to reflect this purchase.

From Google Finance: Kinder Morgan, Inc. (KMI) owns and manages a diversified portfolio of energy transportation and storage assets. The Company operates in five business segments: Products Pipelines-KPM, Natural Gas Pipelines-KMP, CO2-KMP, Terminals-KMP and Kinder Morgan Canada-KMP. The Company through Kinder Morgan Energy Partners, L.P. (KMP) operates or owns an interest in approximately 37,000 miles of pipelines and approximately 180 terminals. These pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, and its terminals store petroleum products and chemicals, and handle such products as ethanol, coal, petroleum coke and steel. The Company is a provider of carbon dioxide (CO2), for enhanced oil recovery projects in North America.

KMI Chart


Yield:  4.31%
Market Cap:  87B
Dividend Growth Rate (3yr):  ~14%
Years of Dividend Growth: 4 years

I purchased 20 shares of Chevron Corporation (CVX) at 103.50.  This purchase adds $85.60 of annual dividends to my account.

I now own 20 shares of Chevron as this was a new position.  If oil continues to slide and CVX falls to around $90, I will consider purchasing more of this company.  I bought CVX because it a globally diversified producer of oil and nat gas.  I believe that CVX is the next best company to Exxon (XOM) with oil being as low as it is.  This is because they have a very large interest in natural gas and they have refining capability.  Both of which is should help hedge the company because natural gas has not fallen quite like oil and when oil is low, usually refining does well.  I thought of buying COP but they recently got rid of their refining business.  In the future, CVX could spin off the refining business like COP did and could unlock shareholder value.  I bought Chevron before the ex-dividend date so I will not miss any of their payouts this year. The portfolio will be updated to reflect this purchase.

From Google Finance: Chevron Corporation (Chevron) manages its investments in subsidiaries and affiliates and provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in fully integrated petroleum operations, chemicals operations, mining activities, power generation and energy services. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; processing, transportation and regasification associated with liquefied natural gas; transporting crude oil by international oil export pipelines; transporting, storage and marketing of natural gas, and a gas-to-liquids project. Downstream operations consist primarily of refining crude oil into petroleum products; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car, and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.

CVX Chart


P/E:  9.60
Yield:  4.13%
Market Cap:  197B
Dividend Growth Rate (3yr):  ~10%
Payout Ratio: 43%
Years of Dividend Growth:  29 years

So there you have it, a few more building blocks on the path to the American Dividend Dream! These purchases add $225.16 in dividends to my total that now stands at roughly $3467.00.  My dividend income is starting to look pretty good for this upcoming year! What do you think, good purchases, bad purchases?  What are you looking to buy next?


  1. ADD,

    I own and love all three of the companies you purchased. Not many dividend investors own MSFT, but I love the company, its balance sheet, and it has really rewarded shareholders in recent years with big dividend raises. CVX at 4%+ is great and KMI is a beast!

    Great job!


    1. Thanks! Yea, I think there is a lot to love about MSFT. I read somewhere that they have a cash balance of around $100B. That means there is plenty more potential for rewarding shareholders in the future!

  2. ADD,

    Nice buys across the board!

    MSFT is one I missed out on a few years back. They've done incredibly well over there. Just a cash cow with all of its licensing and products. My continued fear over tech leaves me leery about long-term investments in the sector, perhaps to my own detriment.

    Happy to be a fellow shareholder in CVX and KMI. They're both well-positioned for future demand in energy, though not without volatility along the way.


    1. Your fear in tech is understood. So quickly companies can go in and out of favor but MSFT is one of those companies that I believe will be generating substantial revenues/earnings for years to come. The licensing side alone is a great enterprise and it seems their products are starting to catch on.

      Volatility can be a good thing as long as you think the company will keep growing. Could mean getting in at cheaper prices!

      Thanks for stopping by!

  3. You're right, not many own MSFT, but it is looking good right now! Well done on some awesome purchases there. Chevron is also looking good.

    1. Yea, I happened to get in initially at a much better price, but with the recent sideways trend and catalysts on the way to perhaps propel the stock further, I think it is a good purchase.

      Hopefully oil prices stabilize soon and CVX is better able to adjust their operations so they can continue doing what they do... raise dividends for decades!

      Thanks for stopping by

  4. Thank you for sharing your recent buys with us. I can appreciate the CVX and KMI buys as energy is definitely offering some great buys in recent months but I am not into the MSFT trade. I don;t care for any tech company in my long term dividend growth portfolio. Things can change too quickly and never come back. At one time AOL was the Internet for many people. Where is it today. Research in Motion with Blackberry was THE mobile device that everyone carried. Where is it today? Just my two cents.

    1. Like DM, I understand your hesitation towards tech and I agree that things can change mighty quickly. However, MSFT made it through the tech bubble, it made it through the recession and has made it through a period of handheld devices when many people thought they were too late to the party.

      It is my opinion at this time that they are starting to take some market share with their Surface products and their XBOX is another avenue where there could be untapped potential. Both of which just add to their incredible revenue sources from licensing products.

      We shall see how things work out! If they start to change, and MSFT goes the way of AOL or Blackberry, you may come back to this post and say "I told you so" :)

      Thanks for commenting, looking forward to your input in the future!