Stock on Watch: DIS (Disney)

If you’ve been following the news lately, you’ve probably already heard the news that Disney has planned to exit its agreement with NFLX (Netflix) by the end of 2019, saying they will be starting their own streaming service by 2020.

THIS IS HUGE NEWS. 

Recent Earnings: Following the earnings report yesterday, Disney showed that is growth was generally flat to slightly down from the same quarter last year. Revenue from Parks came in 12% higher, but it’s studio segment, its third largest source of revenue, dropped 16% off-setting gains from their Parks. But, with the recent decision to pull its content from Netflix, this should become a huge opportunity for Disney to scoop up even more market share.

The possibilities for Disney moving forward are looking as good as ever though as they move to secure even more exclusive rights for their content. Imagine receiving a 10% discount to all parks if you’re a subscriber to their streaming service, or earning a free year of streaming after taking a Disney Cruise. There are many ways that Disney can pull even more subscribers/visitors into their all encompassing universe.

Couple all of this with the fact that Disney just dropped nearly 5% after its recent earnings quarter and it’s in a very desirable price to start a new position. The stock may suffer more over the short term, but as always with Disney, it will recover and should grow its earnings substantially more as it continues to expand its parks and gets its first taste in the content streaming business.

Though DIS doesn’t pay a mouth-watering dividend, it only pays out 25% of its earnings back to shareholders, meaning it has PLENTY of room to increase its dividend in the future.

P/E Ratio: 18.9                              Payout Ratio: 25%.                 Dividend Yield:  1.46%

 

 

Stock On Watch: HRL (Hormel Foods)

One of the stocks I’ve been watching over the past few weeks is Hormel Foods. $33.66/Share as of 8/8/17. The main reason this stock is on my radar is because its a member of the Dividend Aristocrats group. A Dividend Aristocrat is any company listed on the S&P 500, that has paid AND raised their dividends for 25+ consecutive years. In-fact, Hormel has increased their dividend for 50 years, since 1967. On top of that, their dividend has more than doubled in just the last 5 years. 

When a company shows that is has interest in increasing its dividend, (cash paid back to shareholders for holding shares.) it means they are dedicated to and care about their investors. 

Right now, the shares of Hormel aren’t exactly cheap. Hormel Foods (HRL) has a P/E ratio of 20.8. Which is the “cheapest” it’s been in 4 years. 

A basic, yet typical, way to measure how expensive a stock is, is by it’s P/E ratio. (Price/Earnings) You can compare most stocks to the current P/E ratio of the entire S&P for instance, which is currently around 24.6. So theoretically if a stock’s P/E is below 24.6, it could be considered cheap. 

Another reason I’ve added this pick to my watch list is the fact that it’s also  -6.00% below its price 52 months ago. It looks like this stock has found a bottom finally, but obviously only time will tell. No one ever knows when the bottom will be reached, but 

A third reason for keeping an eye on HRL, its long-term debt levels are low enough to be handled over the long term. Hormel only has $250 million in long term debt with over 1 billion in revenue per year, so unless a cataclysmic event occurs or people stop going to grocery stores, I expect this debt to be completely manageable. 

A forth reason, GIS (General Mills) saw a large drop after reports that consumers are shifting away from yogurts and cereals in search of “healthier” options. I believe that this uncertainty also hurt HRL as they have a strong focus on canned & pre-packaged foods. But, on the other side of the coin. Hormel has been aggressively acquiring smaller start-up type companies such as; Wholly Guacamole, Applegate deli meats, MuscleMilk, Skippy’s Peanut Butter and as of last year, Justin’s, an organic nut-butter company. The ability to acquire these companies all while maintaining healthy debt levels shows very good management at the helm of this ship and I expect it to be steered to higher highs in the next 2-5 years if it can maintain low debt and continue to acquire companies to build a wider moat and shift with new consumer trends. 

The current payout ratio for it’s dividend is at 41%, meaning it still has room to grow the dividend in the future without affecting much on their bottom line. 

Current Dividend Yield: 2.02%    Payout Ratio: 41%

 

*I do not currently own any shares of HRL. 

Credit Card: Alaska Airlines Visa Signature – NEW Sign-up Bonus

A few weeks ago, Alaska added an increased sign-up bonus on their Visa co-branded credit card. In addition to the usual 30,000 sign-up bonus after spending the min spend requirements ($1,000 in 90 Days), they have added for a limited-time an extra perk! If you sign-up before Aug 31, 2017, you will be able to redeem Alaska’s famous companion fare ticket for only the taxes on your second ticket (when purchasing together).

This means Alaska is waiving the usual $99 fee that is added onto the companion fare. If you are approved for this card before the time runs out, you can essentially get two companion tickets in your first year of card ownership because Alaska renews the companion fare in your account each calendar year. The companion fare alone makes this card a good addition to your wallet despite the $75 annual fee.

I plan on using this credit card’s companion fare for a flight to Honolulu, HI from Los Angeles, CA.

Click here to Apply for the Alaska Airlines Visa Signature Card (Link Opens In New Window)

Note: I have a 740 FICO and was approved with a $17,000 line of credit on 8/4/17.

Recent Buy: MO (Altria Group)

Recent Buy: 8/7/17
Today, I purchased 23 shares of MO (Altria Group) for $65.73/share or $1,151.84 in total capital. I had 0 shares of MO prior to this purchase. This increases my forward dividends by $56.12/year.

The reason for this purchase was a recent sell-off due to uneasiness in the markets because of a potential vote to limit the amount of nicotine in cigarettes produced in the USA to “non-addictive” levels. This feels like a market over-reaction. The recent drop brings the stock to -1.65% off it’s 52-week lows. This seemed like a good entry point.

Warren Buffett once said, “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive; and there’s fantastic brand loyalty.”

Total Forward Dividends: $604.48

Recent Buy: OHI (Omega Healthcare Investors)

Recent Buy: 7/28/17

Today, I purchased 21 shares of OHI (Omega Healthcare Investors) for $31.12/share or $653.44 in total capital. I had 0 shares of OHI prior to this purchase. This increases my forward dividends by $53.76/year.

There was speculation that if the President had successfully repealed the Affordable Care Act, OHI would have seen a massive sell-off. The speculative reason for this would be that OHI receives a large majority of their income from Medicare and Medicare was anticipated to see massive budget cuts. Because the repeal was unsuccessful, and because OHI saw a ~2%-3% drop after it released Q2 earnings, I saw a buying opportunity. Hopefully I’m right.

Total Forward Dividends: $604.48

The Start: Day 1 – FI (Financial Independence)

It was a year ago that I made the decision to start on my path to financial independence or FI for short. 1/29/2016 to be exact. I’ll call it my late New Years resolution, for the rest of my career.

The idea being, to save enough money to afford to live without a full time job whilst (did I use that right?) being able to travel, explore, and meet people and ideas I never would have otherwise. See the millennial coming out?

Millennials have moved past the idea of white-picket fence homes, a typical “nuclear” family, and even getting married in a lot of cases. It’s a new generation of people who would rather spend money on experiences than material goods.

And I say AMEN to that!

That is, after all, the point behind starting this blog. Not only will it build a foundation of habits and knowledge that can be built upon to construct your own fortress of financial independence to do what you want, but it will also focus on the more fun parts of saving money, like all the traveling it can unlock or so you don’t have to work so fucking long and hard all your life. And the best part about it, we can do it TOGETHER.

So, let’s take the first steps and dive head first into the FI world and start learning about what is actually required (mathematically & otherwise) to achieve our individual goals.

Welcome to Dividend Traveler

Welcome to DivTraveler, an early retirement/financial independence resource for building a fortress of passive income and creating an environment to fuel early retirement and financial independence (with lots of travel on the side).

Welcome to Dividend Traveler, an early retirement/financial independence resource for building a fortress of passive income and creating an environment to fuel early retirement and financial independence (with lots of travel on the side).

Early retirement was a new concept for me a little over a year ago and still is. It sounded ethereal and unobtainable, something that was reserved for the ruthless and money hungry 1 percent’ers or those few lucky souls, that we all secretly despise deep down, who came across a financial windfall such as a lottery win or lucky jackpot pull on a slot machine. *Side note: My biggest slot machine win was $261.59, on a penny slot! Take that Danny Ocean!

1917269_435587929970240_7011718209383096320_n

Now, before we get into the endless different ways you can shift your lifestyle around to achieve the elusive early retirement, I want to be completely transparent in my own lifestyle, my expenses, my current wealth and savings, and show you that I am certainly NOT the shining beacon of the early retirement guru’s to follow. If you want that, go here and check out other financial blogs I subscribe to, there are a TON of fantastic bloggers out there.

This blog is partly going to be a way for me to encourage myself and track my own lifestyle changes, but also to lay out some of basic concepts that are required before you can step into the world of financial independence and early retirement. Traveling is also a big part of my life now, and I am constantly tossing the idea around of living in a converted Bus/Van for at least some part of my early retirement. We’ll see where that goes.

Let’s get started, shall we?