Dividend Play: Intel

Today, I switched Altria (MO) out for Intel (INTC) in my Roth IRA. It was more of a socially aware move than anything else. I have enjoyed some good gains over the years with Altria, but decided to do go a different route.

Intel is a good pick up as it has been depressed a bit lately because of the computer industry's growth slowdown. Because of this it has been playing out quite well with a current yield of 3.4%. It also just raised it's dividend by over 14% to $.18 per share. That is quite good and I foresee at least 10% for years to come. This will double the yield on cost every 7 years.

Intel Sale

Decided to get out of Intel early. I might get back in, but decided to take a little profit against a probable downturn tomorrow. I made $18.57 off this trade. So far, since Jan 25, I have earned $44.18 off an initial investment of $2052.07. My goal for the short term will be to average $25 per week, until I get to around $2500.

Different Strategy for the Non-Retirement Account

A couple of weeks back, I reported that I was changing my brokerage account and adding some money towards it. At first, I was looking to keep using the account as dividend growth account. It was going to hold stocks that would be growing their dividends or had high current yields.

That has changed for the time being. Last week, I bought Bank of America(BAC) on a dip with the intention to get out of the stock when it rose to my liking. Basically, I am looking to make $25 out of the stock and then move on, which I did today. BAC rose back to what would be a $25 profit for me and I sold it.

The proceeds from the sale have gone into Intel(INTC). It took a bit of a hit today with it announcement of a chip-set flaw, and I took advantage of that. Now Intel is a two pronged attack for me. If I can hold on till Thursday, I can take advantage of its dividend payout of $0.1812 per share.

The reason I have made this switch in strategy is because I wanted to see if I can eventually add to our income. With my wife having trouble finding a job that fits our children's schedule, I have been pondering different types of income stream. If I can succeed at this, I can hopefully free up that worry. I understand that this is a risky was of going about, but sometimes we have to increase our risk in order to succeed.

FSC Redux

Since I moved my Scottrade account over to TD Ameritrade, I decided ot kick in an additional $1000 to the $1060 that will be transferred. With that, I have been looking to stocks that I will be purchasing with those funds. Of course, I have limited myself to dividend plays as that is my current investment strategy. Until all debts are payed off, I am looking to build up a base of income paying stocks. I believe them to be safer plays for the near term.

I am looking split the $2060 into two stocks, one a dividend growth stock and the other a high income one. For the former, I have not committed yet, but have a short list that I am mulling over. For the later, I have decided to get back into Fifth Street Finance (FSC). I really like this company and management seems fully invested in its growth. Basically, it is a small to medium business loan company.

Currently, FSC is looking to pay out their dividends monthly and the yield is at 10.6%. This seems quite high, but it is in range with similar companies. A $1000 investment, should yield me around $100 a year for the near time and the stock does not fluctuate too wildly.

Dividend Play: McDonald's

Yesterday, I started a position of McDonald's stock in my Roth IRA. It is only 15 shares at the moment, but I plan to use the dividend reinvestment plan there and let the shares grow over time. The company has been raising it's dividend each year at a pretty good rate and I don't see it stopping that anytime soon.

I am studying up on some other stocks to add, as I have left some dollars in my Roth account to make one more purchase. The sectors I am looking at are utilities, energy, consumer goods and some others.

Decided on my Scottrade Account

Yesterday I was pondering what to do with my taxable brokerage account. Well, today I made my decision and pickup up a stock as well. So that means I decided to keep the money in the account. My next choice was to go for a growth stock or some income. I decided on the latter.

I did some research last night on high dividend paying stocks and settled on Fifth Street Financial Corporation. They are kind of a private small business administration, providing loans to companies looking for some capital injection. This type of business was set up through government legislation back in the 1980s. FCS has excelled at these loans in the past decade. This is because they have a strong capital base as opposed to other companies who rely on loans from the big banks to fund their own capital. FCS also uses loans from the banks, but because they have their own capital, they are less risky.

The good thing about these corporations is that they have to payout 90% of their net earning back to their shareholders. In the case of FCS, they pay rather well. The stock is currently trading at about $13 per share and the quarterly dividend is $.32. This means their yield is 10%. As long as the economy continues to pickup, I see the company and it's group doing well. We should see more startups now and existing small businesses will be looking to expand. With that in mind, I decided to pickup 38 shares at $13.07. This should pay me around $48 a year, if the free cash flow is maintained.

After going back and forth, I decided to split the $1000 in the account into 2 dividend stocks. I have not decided on the other one yet, but am leaning towards a big guy, like McDonalds or JnJ. This will be me one dividend grower to match with FCS.

What to do with Taxable investment Account

I have had a Scottrade account for a few years now. It was funded with a $1000 and after a couple of holdings, has now $1003 in cash. Actually, it is earning a grand $.04 month right now. I was thinking of closing it down and adding that money to my emergency holding or putting it towards my debt snowball. But, part of me wants to keep the money there. I am really torn on what to do. I do like the idea of seeing if I could grow that money.

Here are some options of what I can do with the money:

1. Cash it and put it in towards a credit card that is at 4.99%
2. Cash it and add it to our emergency fund earning .50%
3. Keep it at Scottrade and put it in a dividend paying stock such as JNJ or ADP which will get me nearly 4%.
   
4. Keep it and try to search for a good growth stock. I actually did well in my last holding at Apple and made some good money after seeing the account dip down to about $500.

I am leaning towards the dividend stock at the moment, since it will be a safe play and It will be earning money better than in the emergency fund. Decisions, decisions.