Recent Sell - Macy's

I bought a few shares of Macy's at $19.02 seven months ago. At that time, the panic about the impact of the Amazon on the offline retailers was really high. Almost every financial newspapers write about it, and it was a good opportunity to buy an undervalued good company. I saw, that the company worth more, and it can easily pay out the dividends from it's FCF. I thought that I can collect my dividend payments until the market realize, that the company worth much more. So I had a great, 7.94% dividend yield, while I am waiting.

Yesterday I sold all of my shares at $39.79. It was a really good business for me, because I can double my initial investment. If I would not sell it, now I can collect 3.77% dividend yield. This yield is not so good for me for a fairly valued company. I think, that there are much better investment possibilities at todays market. I hope, that I can find some undervalued dividend growth stock in a few days.

Recent Buy – November – Fresenius

November was a calm month for my investments. I got my dividends from Next Plc and CVS Health and I bought a few shares of Fresenius SE (Xetra: FRE) at €62.28 which gives me 0.99% dividend yield. Fresenius is a global healthcare group, and offers products and services for dialysis, hospitals and outpatient medical care. It focuses on the hospital operations and offers engineering and services for hospitals and other health care facilities.

Fresenius increased it's dividend in the last 24 years, which is really rare among european companies. As I look at the numbers and valuation of Fresenius, I think its a great company at a fair price. It shows great growth in the last 10 years and I believe that it can maintain this growth in the next decade.

Full disclosure: Long CVS, Next Plc, Fresenius

Recent Sell – Allianz AG

I bought a few shares of Allianz AG in 2016 after the Brexit referendum. That was a good timing, because of the panic at the stock market. I sold that shares a few days ago, because I think, that the valuation of the company's shares are really high.

When I bought the shares, the P/BV was 0.85 and the P/S was 0.52, but now I calculate P/BV 1.31 and P/S 0.75. If I look at the historical data, I can only see such high values in 2007. So this two ratios show me, that it is better to realize my profit.

But what I would expect from the company if I hold the shares? Allianz increased it's revenue from €92.183 billion to €110.500 billion over the period spanning fiscal years 2007 to 2016. That's a compound annual growth rate (CAGR) of 0.89%.

Over the same 10-year period, the company's diluted earnings per share decreased from €17.71 to €15.00, which is a CAGR of -1.12%.

 I think that it's not so impressive from a company, so take a look at it's dividend.

The company increased it's dividend in the last 4 years, with a ten year CAGR 7.18%. The dividend yield is 4.12% with my selling price. (€184.35) The payout ratio increased in the last 10 years.

These numbers show me, that the company's numbers are stagnating, and I won't expect great long-term returns from it. It was a good value play for me, but at today's prices I think that I will find muh better investment opportunities for my money in the next few months.

Watch List for September

In the last days I was thinking about what share would I buy in September. I am monitoring a lot of candidates, but I choose four dividend paying companies.

Qualcomm (QCOM) engages in the development, design and provision of digital telecommunications products and services. It operates through the following segments: Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). Qualcomm pays out $2.28 dividend per share, and increased the dividend in the last 15 years, with a ten year CAGR 16.50%. The dividend yield of the company with the last closing price is 4.38%.

W. W. Grainger (GWW) is a distributor of maintance, repair and operating (MRO) supplies and other related products and services. The company raised it's quaterly dividend by 4.92% to $1.28 per share. This marked the 46th consecutive annual increase for W. W. Grainger. Over the past decade GWW has been able to boost annual dividends at a rate of 15.80% per year. This was supported by an increase in earnings from $4.94/share in 2007 to $9.87/share in 2016. The company has a sustainable dividend payment, and is fairly valued at 15.40 times forward earnings, while yielding 3.20%.

Kroger Company (KR) operates supermarkets, multi-department stores, jewelry stores, pharmacies, fuel centers and convenience stores in the United States. The company increased it's dividend in the last 12 years, with a ten year CAGR 16.50%. The dividend yield is 2.30% with the Friday's closing price. ($21.74) The payout ratio is really low, it's only 27.60%.

The Walt Disney Co. (DIS) is a diversified international family entertainment and media enterprise. It operates through four business segments: Media Networks, Parks & Resorts, Studio Entertainment and Consumer Products & Interactive Media. The company increased it's dividend in the last 7 years, and the ten year dividend growth rate is 18.80%. The dividend yield is 1.52% with the Friday's closing price. ($102.41) Generally I like companies which have at least 10 years consecutive dividend increases but DIS is an exception. It has powerful brand what doesn't need explanation if you have a child.

Full disclosure: Long KR.

Related Posts:

1. Recent Buy – Kroger

A Good Article to Read: Buying Stocks Solely For Dividend Yield Is a Poor Bet

What are the main variables of the return you receive from a stock? The return of a stock depends on three variables: earnings growth, P/E change, and dividends. You need all of them for a good return. If you think that you need only a good dividend yield, I recommend you to read the Marketwatch article: Buying stocks solely for dividend yield is a poor bet.