Monday, 14 January 2013

New Purchase - CSX Corp.

Today, I turn 34. One less year to buy cheap and keep. My gift to myself was 150 shares of CSX @ $20.47, which comes to $20.54 including commission. This isn't expensive, nor is it a bargain price. I bought it in hopes the upcoming dividend increase will boost my yield on cost to at least 3%.

My initial yield is $0.56 / $20.54 = 2.73%, which is a little low. However, if CSX increases it's dividend by 10% in Q2, which I think is highly possible, my yield on cost will increase to 3%.

My new purchase adds $84 in annual dividends. My new 12-month forward dividends is now $3,638.34.

I updated my Average Dividend Yield Analysis to include 2012 high and low prices. You can see the previous table here.

CSX:US
Year
High Price
Low Price
1Q
div.
2Q
div.
3Q
div.
4Q
div.
Annual Dividend
High Yield
Low Yield
2003
$6.05
$4.25
$0.0167
$0.0167
$0.0167
$0.0167
$0.067
1.57%
1.10%
2004
$6.74
$4.80
$0.0167
$0.0167
$0.0167
$0.0167
$0.067
1.39%
0.99%
2005
$8.60
$6.15
$0.0167
$0.0167
$0.0167
$0.0217
$0.072
1.17%
0.83%
2006
$12.77
$8.10
$0.0217
$0.0217
$0.0333
$0.0333
$0.110
1.36%
0.86%
2007
$17.29
$11.17
$0.04
$0.04
$0.05
$0.05
$0.180
1.61%
1.04%
2008
$23.57
$10.00
$0.05
$0.06
$0.0733
$0.0733
$0.257
2.57%
1.09%
2009
$16.93
$6.90
$0.0733
$0.0733
$0.0733
$0.0733
$0.293
4.25%
1.73%
2010
$21.60
$14.02
$0.08
$0.08
$0.08
$0.08667
$0.327
2.33%
1.51%
2011
$27.06
$17.69
$0.08667
$0.120
$0.120
$0.120
$0.447
2.52%
1.65%
2012
$23.71
$18.88
$0.120
$0.140
$0.140
$0.140
$0.540
2.86%
2.28%
2013


$0.140
$0.140
$0.140
$0.140
$0.560









10y ave
2.16%
1.31%







5y ave
2.91%
1.65%







3y ave
2.57%
1.81%







5y
$19.27
$33.89







3y
$21.78
$30.88






Super Cheap
$13.17



6 comments:

  1. Nice purchase. I've invested in NSC rather than CSX, but I think both are good railroads. I hope we see some nice dividend increases from the railroads this year.

    Happy birthday!

    ReplyDelete
    Replies
    1. NSC seems to be the preferred railroad among the blogs I read. I don't know the differences between the companies, but both managed to increase EPS and dividends quite nicely over the last 10 years. Let's hope they keep it up! And they are trading at a substancial discount to their Canadian counterparts ( CP and CNR).

      Delete
  2. Hard to argue with the business railroads are in...until Scotty invents the Transporter and they start beaming stuff into space, railroads will be here. Did you know when the DJIA was first introduced, twelve of the thirteen companies on it were RRs? That goes to show you how much this country has changed.

    ReplyDelete
    Replies
    1. 12 out of 13! Very interesting. I guess diversity wasn't at the top of the list back in the day. I bought more CSX today. I'll write about it later.

      Delete
  3. I need to look closer at CSX! I know NSC and CSX are kind of similar, both are fairly dependant on coal and operate in the same region. Most of the bloggers I follow are dividend investors and NSC typically has the better yield. I think that's the reason most bloggers own it over the other railroad options.

    It may be arbitrary (or not because I count on dividends for compounding), but I have a minimum yield threshold of 2.75%. I see CSX is right on the cusp and is worthy of a closer look.

    Cheers

    ReplyDelete
    Replies
    1. I have no idea what the fundamental differences are between both companies. I bought CSX because it was attractively valued and it increased its EPS substantially over the last 10 years. I don't have a minimum yield, but I do like 2.5% or more. I bought EMP.A years ago, with an initial yield of 1.8%. Three dividend increases later, I'm only at 2.33% YOC. Not very high!

      Delete