Recent buy – 3M Company (MMM) & Consolidated Edison (ED)

Double buy 10 shares of Consolidate Edison (ED) for 71,6$/share and 4 shares of 3M Company (MMM) for 169$/share. Annual post-tax dividend inome – 18,1€ and 13,9€. Yield on cost – 2,9% and 2,4%

Yes this was a double buy and quite fast ones after Recent buy – Cicso Systems (CSCO). I was sitting on some cash for now and since situation at work cleared out I’m back to investing 🙂 Some of the funds came from divestment of WFC that cut their dividends for 80% and showed bad Q2 results. Im not talking about provisions for bad loans, I’m talking about decreasing income. Sold it witj ~20% loss, or ~100€. Not a huge amount. Lost dividends amounted to only -4,8€. Now onward to my new dividend payers:

Consolidate Edison – a well known Utility stock based in NY. A Dividend aristocrat growing dividends for over 46 years and a Foundation stock of Dividend diplomats. Stock was down from ~90$ a year ago. Annual sales 12,3bn$ and EBITDA 4,4bn$ both slightly increased over past few years. EPS 3,99$ making P/E – 18x quite rational in today’s market, altough would like to see 15 as for Utility. Attractive post-tax dividend yield – 2,9% with payout ratio – 77%, which is quite normal as for Utility that mostly pay out 80-100%. Last dividend increase +3% from 0,74$ to 0,765$. Low growth also a thing for Utilities. Equity ratio ok – 31% (Equity 18,4bn$, Total asset 59bn$). Leverage on a higher side with NetDebt/EBITDA – 5,2x (Debt 23,8bn$, Cash 1,1bn$). All metrix looks more or less ok.

3M Company – producer of Industrial goods has even more impressive dividend growth history – 61 years and is a Dividend king. Stock price is around same level as was year ago, but notably declined from 200-250$ range where it was at 2018. Main issue of the company was that its sales and earnings declined slightly for past few years. Sales are around 31bn$ and EBITDA around 8bn$. EPS 8,8$ so P/E -19x. Bit on a high side, especially with stagnating growth. Post tax dividend yield – 2,4% with payout ratio – 67%. More or less ok. Last dividend increase +2% from 1,44$ to 1,47$. Low growth comes at no surprise due to stagnating earning growth. Equity 24%, bit low, NetDebt/EBITDA – 2,1x ok.

in total these 3 transactions increased our forward dividends by +27€ to 840€ adding two high quality companies to our dividend payers.

2 comments

  1. Both solid buys both in my portfolio. In fact, ED is a Sept. consideration for me along with others. Keep on buying and building that passive income portfolio.

    Like

    • Thanks DivHut. Yee these are good LT buy companies. Good yield, normaly valued ect. My portfolio needed that diversification 🙂

      Like

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