Trades – October No-Cost Dividend Growth Portfolio Purchases

Trades - October No-cost dividend growth portfolio - GoPro Camera

So just last month I wrestled with increasing my Loyal3 contributions even just a couple of months after increasing them for the first time. Well the time is now. Not only did I increase my monthly purchases over September’s, I doubled them! Going forward my goal is to invest between $500 and $1,000 per month in Loyal3. I am projecting building this account to approximately $6,000 by the end of the year, all without commissions AND juicing my yields with credit card yields. Love it! The reason I leave myself a dollar range for future investments is that some months viable investments through Loyal3 will be more compelling than other months. I will say that I see no reason why I will not continue adding to this account going forward and build it into its own dividend generating machine!

For those newer readers, Loyal3 is a startup investment brokerage offering retail investors the opportunity to invest into individual equities with as little as $10 per transaction at no-cost per transaction. In addition to offering these no-cost trades, investors can make purchases with a credit card in the amounts of $10, $25, and $50 per equity at one time. By making multiple transactions, it is possible to purchase more than each of those amounts per day. There are some other limitations, such as not being able to purchase more than $2,500 per equity per month, but the intent is to really benefit the small individual investor. It seemed like a great opportunity to build a portfolio at no-cost while leveraging credit card rewards.

It isn’t just individual stock trades, it is also the ability to invest like an institution, and get in on IPOs as they happen, and before they go to market. Of course, this is a slightly different investment track than I normally discuss here at WYOR, but you can bet I signed up to get notified of each IPO in advance. You never know what company you might be able to get into on the ground floor! A couple of popular and recent companies that had an IPO with Loyal3 were Dave & Busters and GoPro. It is super simple to stay on top of their IPO offerings, just go sign up to receive email notifications prior to each IPO. I’m hopeful that the Lending Club IPO is offered through their platform!

How is this possible? Loyal3 is a business-to-business company, generating revenues through IPO offerings and the management of social stock programs for several companies. Since they aren’t focused on monetizing their retail clientele at this point, we get the great benefit of investing at no-cost! Of course the icing on the cake is the ability to utilize your credit card to make the purchases and pick up the credit card rewards as you arbitrage the system.

Now, for the month of October, I made purchases of four different positions, two of which were new to me in my Loyal3 portfolio. As a bonus, I was able to purchase an extra $10 this month as a result of dividends earned during the month, giving me a total of $1,010 of newly invested capital during the month. Being able to selectively reinvest the dividends earned is a nice perk, similar to the FRIP program at Scottrade.

October Loyal3 Trades

kraft_2012_logo_detailPurchased Kraft Foods Group (KRFT): A newer dividend generating position and a new position in my portfolio, KRFT has been paying a dividend since its formation in 2012 when it was spun off of Kraft Foods, now known as Mondelez, which is the international distributor of Kraft products. With a limited dividend history, KRFT has already shown a desire to grow the dividend, with two increases already, with their latest being 4.76%, growing their annual payout from $2.10 to $2.20 per share. I invested $200 into KRFT in the first half of the month, picking up 3.5892 shares at an average cost basis of $55.72 per share. Given the current dividend, my yield on cost is 3.95% and adds $7.90 to my forward 12-month dividends.

Mcdonalds_logoPurchased McDonald’s (MCD): A true Champion in every sense of the word, MCD has been raising their dividends for 38 consecutive years. As with September, MCD continued to struggle in the first half of October after the recent struggles. During October, I purchased $160 of MCD, picking up 1.7471 shares at an average cost basis of $91.58. While not quite the bottom of the dip, this lowered my overall cost basis to $93.76. Even more spectacular, MCD became my first $1,000 position in Loyal3. Amazing when you consider the slow and steady rate in which I’ve been investing in this account!

This latest purchase, including the recent dividend increase of 4.7% from $0.81 to $0.85 per share, is at a yield on cost of 3.71% and adds $5.94 to my forward 12-month dividends.

unilever-logoPurchased Unilever (UL): Do you go grocery shopping? Yes, than you’ve seen UL’s product lines. Do you watch TV? Then you are likely familiar with Axe, one of their more prominent brands in TV advertising. A massive consumer goods producer, UL has tremendous global reach and exposure to emerging markets. A great company to own and as a shareholder, I’m looking to expand my current position significantly over time. Thank goodness Loyal3 offers me this flexibility! This month, I doubled my position in UL by purchasing $450 worth of shares and picked up 11.2743 shares at an average cost basis of $39.91. With an approximate dividend of $1.52 per share due currency fluctuations, my yield on cost is 3.81% and adds $17.14 to my forward 12-month dividends.

Yum!_Brands_LogoPurchased YUM Brands (YUM): As a compliment to my MCD position, YUM is a new position for my Loyal3 portfolio and provides some diversification in the fast food space, owning the Taco Bell, KFC, and Pizza Hut brands. As with most stocks at the early part of October, YUM dipped and provided an opportunity to pick up some shares. With the remaining $200 of purchases, I picked up 2.9256 shares at an average cost basis of $68.36 per share. With 11 years of dividend growth, YUM most recently increased their dividend by 10.8%, raising their annual dividend from $1.48 to $1.64 per share. Given the current dividend, my shares have a yield on cost of 2.40% and add $4.80 to my forward 12-month dividends.

October Loyal3 Purchase Summary

As with my previous transactions, these took two days to process from the time I put the order in till the time the transactions occurred. All transactions were made with my credit card or dividends received in the account. For those that utilized the credit card I did not receive any additional fees for the transactions, thus successfully arbitraging the process for credit card rewards one more time. October’s purchases resulted in a total increase of $35.78 to my forward 12-month dividends and carried an overall average yield on cost of 3.54%.

My total no-cost Loyal3 dividend growth portfolio now consists of nine holdings, and has a forward 12-month dividend total of $157.59. The full details of this portfolio can be seen on my Dividend Growth Portfolio page. If you’re interested in seeing what dividends this portfolio has generated so far this year, check out my 2014 Dividend Calendar.

Go check out Loyal3 and let me know what you think.

Flickr: Tom Hart

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Comments

  1. All four are great long term buys in my opinion and three of the four have been in my portfolio for many, many years. I just started adding UL the last couple of months and plan to make it a long term holding as well. Thanks for sharing your recent buys and look forward to your next update.

  2. Fyi, loyal3 will pay kraft dividends with shares not actual cash so its basically automatically reinvest for you.

  3. Nice buys w2r, thanks for sharing them. I’ve been steadily adding to MCD as well and decided to initiate a position in UL this month after reading your and JC’s portfolio updates. I need to do some more homework on KRFT and YUM before starting a position.

    Best regards,
    SFZ

    • Good to see you’re continuing to build your positions through Loyal3, and happy to have you as a fellow UL shareholder. As for the KRFT pickup, I will likely add Mondelez as well since it is the international arm of KRFT.

      I appreciate you stopping by and commenting, SFZ!

  4. Great buys, all 4 of these brands are solid and you can hold them forever.

  5. Last month I initiated positions in both KRFT and UL for my Loyal3 portfolio, although I own shares of UL in my regular brokerage account as well. All 4 of your picks last month are great DG companies. I can’t blame you for increasing your investment amount through Loyal3. I don’t have a set target just yet but when everything levels out real life then my plan is probably $1k in L3 and the rest in my regular brokerage account.

    • They are all solid companies, with great products, and should continue to grow and reward shareholders in the years to come. Of the four, UL is by far my favorite given its international exposure and amazing portfolio of brands.

      I like your plan to split between your regular brokerage account and Loyal3. I know I will continue doing the same to build both portfolios up. Thanks for stopping by and commenting JC!

  6. WYOR,
    Love it. This portfolio is already compounding nicely. I only own 5 stocks in Loyal3 at the moment. Looking to add a few more hopefully before the end of the year. Maybe Lending Club will be one of them!?!
    -RBD

    • The compounding is incredible. I should hit the $200 mark in forward 12-month dividends by the end of the year, so next year will really show the power of consistent and regular investing into dividend growth stocks. As for Lending Club, I will likely be participating. I am interested in seeing how they limit it to the folks who are “loyal retail investors” already.

      I appreciate your stopping by and wish you the best as you expand your Loyal3 portfolio as well.

  7. Nice stock purchases, W2R!

    Loyal3 sounds great. Unfortunately, they or not offering their services for Germans.
    Maybe we’ll get there some day. I would appreciate it.

    • Yes, we are quite fortunate here in the US to have access to Loyal3, however I’m sure as they become successful, other start-ups will likely emerge for international folks to participate in and enjoy similar benefits.

      Thanks for stopping by GI, and enjoy the rest of your week!

  8. Awesome buys, W2R! I own MCD and UL and am proud to be a part of both, despite MCD’s recent issues.

    I’m still on the fence about Loyal3. The concept sings all the right keys, but I’m a stickler for FDIC insured and they are not.

    Best,
    DWC

    • Glad to be a fellow shareholder with you DWC! Some solid companies with strong cash flow and a shareholder first mentality.

      No equity positions are FDIC insured for anyone. What I believe you are referring to is SPIC, which most brokerages carry that covers $500,000 of equities per account. Loyal3 is covered by SPIC, so I have no concerns since I am investing directly into individual equities, and not a fund where money could be misappropriated.

      Thanks for your comment DWC!

      • Thanks, W2R. I was thinking FDIC in terms of needing access to the dividends down the road when they’re paying the bills. In digging into their FAQs just now it appears L3 offer a quick and free way to get that money into a checking account so the wouldn’t be loitering on their end.

        Best,
        DWC

        • Ahh, now I understand what you were talking about. You were speaking specifically to the “loose” cash in the account. For me, this won’t really be an issue given my desire to keep reinvesting, but I can see where someone might have a build up in there and it become a material concern.

  9. Loyal 3 is great! I have continued to make purchases every week. Usually two positions. I have been adding to UL and MAT mostly, but sprinkling in MCD and a few others.

    I missed out on adding to YUM, which I have been looking into. Hopefully, I will get a better chance soon =)

    GoPro’s are fantastic cameras! I just couldn’t get myself to add any shares in it, aside from having the most popular camera right now, I can’t see them beating out the bigger guys once they focus there energy on the adventure seeker space.

    Take care!

    • I completely agree, Loyal3 is fantastic. While I don’t have a weekly schedule for my purchases, I am investing probably every two weeks or so on average.

      Fortunately I was able to snag YUM during the dip, as I really only like them below $70, but would consider up to $72.

      GoPro is an interesting company. Great product, but very niche. I think their strength is actually in the branding, not just the product itself. Ultimately, it wouldn’t surprise me if they were acquired by a big technology company down the road, even after going public.

      Thanks for stopping by and commenting ILG!

  10. W2R,

    Some solid purchases up there. I’m a fan of Unilever in particular right now. But all of them are legendary brands with solid products and huge reach. Plus, the yields, save YUM, are pretty attractive here.

    Keep it up!

    Best regards.

  11. Great buys! And you know I enjoy your spreadsheets (portfolio and calendar pages). I’m a bit of a spreadsheet/graphics enthusiast, so I like seeing what others are up to. Take care and keep up the good work!

    Cheers
    FerdiS

    • I’m glad you love the spreadsheets, I know I’m constantly in them and thinking about ways to improve them and track everything in more detail.

      Keep up the good work yourself!

  12. I’m continuing to put $50 into loyal3 every month (small, I know, but it’s something). I’ve got TGT, MCD, PEP, WMT and KO. I’m sticking to only dividend payers, but still nailing down my strategy other than dollar cost averaging.

  13. Good choices. I don’t think some are the best values, especially UL, but it definitely won’t matter in 10-20 years. They’re all solid companies, and worthy of inclusion to a portfolio. Long YUM and MCD myself.

    • While I can’t disagree that none of the pickups are at their “best value,” I’m focused on the long-term, and waiting for perpetual lows will ultimately cost me in the end. What companies do you currently view as good values DD?

      Thanks for your comments!

  14. Great purchases WYOR. Glad to be a fellow shareholder in MCD and UL. Close to $1000 in monthly purchases in wonderful. I also started weekly purchases in Sharebuilder and have invested about $1200 a month for the last couple of months.

    • Thanks DGJ! I am happy to be in a position to invest regularly and in a substantial volume at this point. I’d like to continue building both my taxable and retirement portfolios in addition to contributing to Loyal3.

      You’ve done a great job in building your portfolio thus far!

  15. Awesome buys and wow, you are kick starting your Loyal3 account big time with the amounts you are adding. I love L3 and will actively add weekly as long as the going is good!

    • Yeah, it is absolutely at a place where it will be taking on a life of its own. I’m projecting finishing the year with over $200 in forward 12-month dividends, so the extra $50 per quarter will already be enough to start compounding on itself nicely.

      Thanks for stopping by and good luck with your continued Loyal3 purchases!

  16. W2R,

    Great purchases! Both McDonald’s and Unilever have a strong position in my portfolio too. I believe Unilever is highly undervalued at the moment.

    I wish there was some sort of Loyal3 available over here. From what I’ve read the system sounds absolutely beautiful for small-time investors like myself.

    Keep it up,
    NMW

    • I agree with you that UL is a solid value right now, and am continuing to build that position. More purchases have been made already in November to that end.

      As the continued pressure grows from a variety of online brokers, prices will continue to decline to reasonable places. Loyal3 currently operates at a time where there seems to be enough opportunity to leverage external revenue sources instead of the actual retail investor. Should be interesting to see how they grow and stabilize over time.

      Thanks for your comments and stopping by, NMW!

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