I want to retire early. I want to retire young at or before 45 years old over my passive income.
I could have bought a rental apartment and collect rents, deal with tenants and stuff like that but I prefer to invest in good quality companies paying growing dividends year after year. This technique is called “Dividend growth investing“.
In order to reach my goal, I invest excess capital in such companies as Exxon, McDonalds or Johnson & Johnson to name a few.
Today, I have added again to my McDonalds position (15 shares @ 92,50$) and I have initiated a new position with Deere (15 shares @ 82,60$).
This will add 48,60$ and 36$ to my annual dividend income or 0,23$ US per day 365 days per year. My total daily dividend income is now 1,58$ US and 0,25$ CAN or 576.70$ US per year and 91.25$ CAN per year. Hey! It’s not Peru but it’s growing!!!
I am now invested in 12 great companies. Eleven of these are paying growing dividends. The other one is Google. Why Google? Because I don’t want to tell my grand-kids 40 years from now that I should have bought some Google shares back in the days… I heard too many of my family members saying they should have bought Microsoft in the ’80s!!!
With 65 McDonalds’ shares, MCD is now my largest holding. I’m way too heavy on Big Macs right now and too many Big Macs can make you sick like anything else, but with such market conditions, it’s hard to find value and I think that at this price, MCD offers great value. Plus, they recently announced that they will return 20 billions to shareholders within the next two years… Since there is less than 1 billion shares outstanding, this should result in a 20$ per share distribution! Not bad! I guess they will return it in the form of share buybacks and dividends… we’ll see. But either ways, I won’t say no to that kind of cash back!
MCD is having very bad press recently. Russia closed some of their stores. Employees are asking for better wages. There has been a scandal in China… Well… It seems that everything is happening to McDonalds recently. There is a lot of headwind.
But! And yeah, there is a but! McDonalds is still a very strong company, a cash cow indeed! Will all of this really affect its fundamentals over the long term? I don’t think so. It’s just part of the game, like an oilspill is part of Exxon or BP’s game.
I believe my return should be interesting with McDonalds over the medium to long term.
Oh my Deere!
Who doesn’t know John Deere? For 175 years Deere has provided solutions to farmers. I guess humans will still need to eat 50 years from now and farmers will still need tools to cultivate their land. To my own belief, Deere currently offers a good entry point at current price.
It’s currently trading near its 52 weeks low. Based on Morningstar’s data, the 5 years average dividend of Deere is 2%. At current price, Deere offers a 2,40$ dividend or 2.9% dividend. Its current P/E is approximately 9 vs a 5 years average of 15,7%. It also trades at 2,7 p/b vs a 4,6 p/B 5 years average. Its price/sales and price/cashflow follow the same path! Plus, DE is a great company that have paid a dividend every year since 1971 and increased it for 11 years in a row.
What about you. Do you plan to buy any stocks in september?
[author] [author_image timthumb=’on’]http://quityourdayjob101.com/wp-content/uploads/2014/03/ID-10050051.jpg[/author_image] [author_info]Hi, my name is Allan. I’m the masked blogger. Like you I’m a modern slave, prisoner of a 9@5 job in Corporate America. They told us when we were young that we would live in a society of leisure and that technology would permit us to work only a couple of hours per day. But we live in a society of stress and uncertainty. My situation could be a lot worse and I know it. So many humans are suffering on this planet. But a golden cage remains a cage anyway. At least, I have an escape plan. I will retire before 45 years old over my passive income. This is a dream that is so powerful that I will make sure it happens. To build my wealth, I mainly invest in undervalued dividend growth stocks. [/author_info] [/author]
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