My US Team of Dividend Stocks 2015

Like my Singapore Team (of dividend stocks), Team USA has been giving good returns. Below figures are the annualised Internal Rates of Return (IRR) for my investments in these US stocks, inclusive dividends. IRRs would have been even better if not for the 30% withholding tax on the dividends.

GOALKEEPER

(1) Berkshire Hathaway-B (9.5%). Warren Buffet and Charlie Munger. Need to say more? Several of below companies are also held by Berkshire.

DEFENSE

(2) Johnson & Johnson (15.6%). Household products for healthcare and beauty.

  
(3) Proctor & Gamble (7.3%). Household products - toiletries, diapers, etc. We consume plenty of their products without realising it.

  
(4) Exxon Mobil (16.0%). Big oil. Almost everything that moves need it. 

  
(5) Anheuser Busch (20.6%). Beer and theme parks. But it's mostly beer. Addiction.

MIDFIELD

(6) Wells Fargo (26.0%). Big Bank USA. Essential function for a working economy.

  
(7) McDonalds (9.8%). Junk food USA. Kids just love it, dunno why. Struggling of late from menu complexity, and competition from more fashionable competitors.
  
(8) Walmart (-1.7%). Low cost supermarket and departmental store. Has mass market appeal for the price conscious.

  
(9) Union Pacific (12.5%). Railways and long haul cargo via land.

FORWARD

(10) IBM (4.5%). Information technology - Big Data and Data Analytics. Buzzwords of the decade. Still waiting for Dr Watson to make an impact.

(11) Philip Morris (15.0%). Cigarettes. Global addiction, big time.

RESERVE

(12) Chevron (0.6%). Another big oil, similar to but smaller than Exxon Mobil.

(13) Target (29.1%). Another departmental store, similar to Walmart. I prefer to shop at Target though.
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Interesting contrasts over the performance of Walmart compared to Target, and likewise between Exxon and Chevron. Big oil has of course suffered in recent months. But perhaps gradual recovery in sight. Sounds like an opportunity to continue buying more. Target has done better as I bought at its throes of poor performance over its Canadian fiasco which it subsequently exited.

Many of the companies derive much of their revenues from the global market and continue to thrive, in general. Don't think there will be any significant changes I need to make to this team.

I'm keenly watching a few players to bring on board. Maybe Disney and Visa?

Related:
A US team of dividend stocks

Disclaimer: 
By no means a suggestion to buy any of these stocks. I bought them at different times and have owned most of them for a few years as my approach is generally one of "buy and hold".

X'mas 2014

Its X'mas 2014. I've been lazy with blogging of late. In part, this was because I've been travelling on holidays. And watching with some excitement the ups and downs of the stock markets.

Bob the Builder

In recent weeks, I've visited KL and Sydney and couldn't help noticing the extent of construction work going on in both cities. There can be all kinds of bad news (e.g. impact of oil on Malaysia, and mining for Australia), but their economies appear to do fine. Economic activities continue to thrive. Life goes on.

As a trivia ... I didn't realise the significance of the location of the Lindt Cafe at Martin Place, Sydney. Guess what's just across from the cafe?

Slippery Oil

The rapid reversal of the price of oil I think has created opportunities. It's time to start watching the big US oil companies. After all, we need oil for plenty of things don't we? It may just take awhile to see results. I read an article a few days ago which highlighted news from the last major oil crisis. The parallels were indeed stark. So much fear. Opportunity! ExxonMobil or Chevron anyone?

All that Gloom May Not Be Doom

Look at what happened to China recently. It was all doom and gloom a few months ago. Its stock market took a nosedive. It was bleeding nose affair. But in the last few weeks, it  appears to have risen rapidly. There is so much disjointedness between the stock market and economic data sometimes.

Global Business Diversification

It's great to have companies that are global in nature and does business across the global. Consider Johnson & Johnson, Proctor & Gamble, McDonalds and such. In contrast, a company like Empire Food which does most of its business in Russia suffers horribly when hit with a shock like currency devaluation. Roubles rubbles, bubbles jumble, absolutely trouble.

The End of 365 Days Since X'mas

It's X'mas today. That means the New Year is just round the corner. Time to take stock of my portfolio's growth over the year. Looking forward to the crediting of interest to my CPF as well.

Merry X'mas & Happy New Year!

p/s: Actually X'mas is coming again. It's just another 364 days away!

A US Team of Dividend Growth/Value Stocks

Aside from investing in SGX stocks (My World Cup Team (of Dividend Value Stocks)), I also own a smaller portfolio in US stocks as part of my globally diversified investment portfolio. Other regions are held in the form of Exchange Traded Funds and Unit Trusts.

At the moment, my US team looks like this:

Goalkeeper:
  Berkshire Hathaway-B

Defense:
  Johnson & Johnson

  Proctor & Gamble

  Chevron

  Anheuser Busch

Midfield:
  Wells Fargo

  McDonalds

  Target

  Union Pacific

Forward:
  IBM 

  Philip Morris

Berkshire Hathaway is a steady goalkeeper that has proven its worth over the long history since its founding by Warren Buffet and Charlie Munger.

The defensive line of 4 is made up of various companies that are likely to float in good time or bad. Toiletries, consumer medical and household products are things that have high repeat value, regardless the market situation. Oil will always be needed, until alternatives start to make oil irrelevant. But I can't see that happening anytime soon. And beer, will continue to be guzzled, perhaps even more so when things aren't looking good.

The midfield line up is an interesting variety of a financial heavyweight, fast food, large scale retailer and nation-wide train system. Of these, perhaps the more risky one is Target as it continues to face difficulty with its troubled expansion into Canada struggling. The Canadians are really not too enthu' with them.

The forward line up of IBM and Philip Morris will take some time to pan out. It's hard for a smoker to cut a smoking habit. A rapidly growing emerging market will likely generate an increasingly higher demand for their products. Of course, there are many risks given that this is a really unhealthy business and will face regularity pressures with high taxation and domestic product alternatives. IBM ... hmm ... let's see how this IT behemoth transforms itself. It has pretty much given up everything that is a commodity - i.e. the hardware business.

Two interesting key attributes of most of the above companies: (a) many are holdings of Berkshire Hathaway, and (b) they are dividend growth champions! Ironically, Berkshire itself doesn't give out dividends. Warren Buffet has always said that his company can do a better job of capital allocation and it makes more sense for them to invest the money than to give out as dividends. Besides, US tax the dividend payouts. As a Singaporean investor, I would lose 30% from withholding tax for dividends that are paid out.

The first team with the above 11 players are doing well.  However, my bench isn't doing too well - i.e. Coach. My holding in Coach has dropped a third in value.

Coach has been suffering from competitive pressures from Kate Spade and Michael Kors. Its attempt to generate more sales via atfactory outlets has devalued its branding. But still, we see many ladies holding Coach products. The company's financials look good. Let's see if it survives the challenge from the new brands and turn things around over time.

It's an irony isn't it? The problem is the Coach. Muahahah!