Sunday, 31 August 2014

New Purchase - AGCO


On August 25, I initiated a position in AGCO.

AGCO manufactures farming equipment such as tractors and silos. They are not well know in the USA, where Deere is dominant, but are “big” in Europe and emerging markets.

Number of shares purchased
101
Price per share
$48.36
Commission
$9.95
Total cost per share
$48.46
Total cost
$4,894.30
Annual dividend per share
$0.44
Initial dividend yield
0.91%
Increase in forward 12-month dividends
$44.44


My dividend income is now $6,839.09 per year.

Tuesday, 19 August 2014

New Purchase - Suncor


On August 18th, I bought 100 shares of Suncor @ $42.50 + $9.95 commission ($42.60). My initial dividend yield is 2.62%.

These shares will add $112.00 to my forward 12-month dividends, which now stand at $6,681.29.

Below is my analysis of SU’s stock price.

Average Dividend Yield Analysis*

SU
Year
High Price
Low Price
1Q
div.
2Q
div.
3Q
div.
4Q
div.
Annual Dividend
High Yield
Low Yield
2003
$16.43
$11.66
$0.02125
$0.025
$0.025
$0.025
$0.0963
0.83%
0.59%
2004
$22.25
$15.48
$0.025
$0.03
$0.03
$0.03
$0.1150
0.74%
0.52%
2005
$33.29
$19.38
$0.03
$0.03
$0.03
$0.03
$0.1200
0.62%
0.36%
2006
$51.09
$35.59
$0.03
$0.04
$0.04
$0.04
$0.15
0.42%
0.29%
2007
$54.74
$39.83
$0.04
$0.05
$0.05
$0.05
$0.19
0.48%
0.35%
2008
$73.10
$18.80
$0.05
$0.05
$0.05
$0.05
$0.20
1.06%
0.27%
2009
$40.79
$21.15
$0.05
$0.05
$0.10
$0.10
$0.30
1.42%
0.74%
2010
$39.45
$29.91
$0.10
$0.10
$0.10
$0.10
$0.40
1.34%
1.01%
2011
$47.27
$23.97
$0.10
$0.11
$0.11
$0.11
$0.43
1.79%
0.91%
2012
$37.28
$26.97
$0.11
$0.13
$0.13
$0.13
$0.50
1.85%
1.34%
2013
$38.56
$27.50
$0.13
$0.20
$0.20
$0.20
$0.73
2.65%
1.89%
2014


$0.23
$0.23
$0.28
$0.28
$1.02


2015


$0.28
$0.28
$0.28
$0.28










11y ave
1.20%
0.75%







5y ave
1.81%
1.18%







3y ave
2.10%
1.38%







5y
$56.30
$86.54







3y
$48.55
$73.84






Super Cheap
$38.42




The table shows the 3 year average dividend yield to be 2.10% ((1.79% + 1.85% + 2.65%)/3). I use the numbers in the “High Yield” column for obvious reasons.

Using the current annual dividend of $1.12, one would have to pay $48.55 for a 2.10% dividend yield.

Buying the stock at its low in 2013 would have earned you an initial yield of 2.65%. Using the current annual dividend, that corresponds to a stock price of $38.42 today (see “super cheap” price in the table above).

Graham Price

SU’s 2011, 2012 and 2013 EPS were $2.74, $1.77 and $2.61. 3Y Ave EPS = $2.37.
SU’s BV is $28.58.
Graham Price = SQRT (3Y Ave EPS * BV * 22.5) = $39.07

Cyclically Adjusted Price to Earnings Ratio

SU’s 10Y Ave EPS = $2.19
CAPE = Stock Price / 9Y Ave EPS = $43.25 / $2.19 = 19.8
A CAPE below 20 is good.