I've sold options on DOW a few times and I've also bought and sold DOW a couple of times over the last few years. I decided to make another speculative dividend purchase. I also don't have a lot of exposure to the materials sector so this will help balance out my portfolio.
I bought 100 shares of DOW @ 33.93/share. Dow has a current dividend yield of around 3.75%. They aren't a favorite of a lot of dividend growth investors because they dropped their dividend during the financial crisis.
DOW's had recent earnings of $0.46/share for Q1 2013 vs $0.35/share last year. According to E*Trade, DOW is expected to earn 2.38, 2.93 and 3.50 for 2013, 2014 and 2015 respectively.
A couple of big reasons I'm interested in DOW are because they are transitioning their business to more specialty chemicals and agriculture products. They are also leveraging the low price of natural gas by building additional plants in the U.S. The natural gas boom we are seeing is not going away. I believe the prices of natural gas will stay low. Natural gas is a huge feed stock in a lot of DOW's products. I could be wrong but at least I'm paid a nice dividend to hold on and see what happens.
This purchase adds an additional $128/year to my dividend income.
My current forward 12-month dividend income has now increased to $5812.47. I'm closing in on a big milestone of $6k/year or $500/month in dividend income.
Dow is not a company I follow but I have noticed your regular purchases of CAT. I would also like to add more CAT if it can drop around $81. Lots of stocks have come down over the past weeks, but there are few deals. I've been adding 1/2 positions in hopes the market pulls back. Hope you had a great vacation.
ReplyDeleteHi ADY,
DeleteI will continue adding to CAT in the low 80's, especially after the recent dividend hike. I agree with you about their being few deals in the market. I will likely just make purchases in existing positions to dollar-cost-average. However, tomorrow I am planning on adding a new materials stock to my portfolio. I too have been waiting on a market pullback that we aren't seeing yet.
Thanks! It was a much needed vacation, I hadn't been to the beach in a while. Work gets a little stressful so I need to take my mind off of things every once in a while.
Thanks for stopping by!