DRIP PORTFOLIO
Record Results at Intel, J&J, and Mellon

Drip Port's three key companies — Intel, J&J, and Mellon — announced quarterly results this week. We have the scoop. Plus, there are many ways to enroll in a Drip. Focus on price, convenience, and timeliness. Finally, please answer our improvement poll if you haven't.

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By Jeff Fischer (TMF Jeff)
July 21, 2000

This week Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), and Mellon Financial (NYSE: MEL) all reported results, and all reported record results.

That's nice. It makes our work as investors much easier. We needn't try to figure out what went wrong. We do want to keep thinking ahead, though, and be aware of risk factors. This week, it was enough work just to digest the earnings reports — but we survived.

Below are links to our news and commentary on the results. I wrote about Mellon and Johnson & Johnson for Fool News, while others (Paul Larson and Phil Weiss) wrote extensively and well on Intel's results. So, here's our coverage of the busy week:

There Are Many Ways to Begin a Drip
One of our next chores is to begin our PepsiCo (NYSE: PEP) Drip.

The Drip Companies discussion board has been hopping since Wednesday with various ideas on how to buy our first five shares of Pepsi. The price differences between the various avenues of beginning are all within about $10 of one another, which is meaningful but not devastatingly so. The factors beyond price to consider are convenience and time, meaning how long it will take to start the plan under each method. If you're starting a Drip with any company that requires you to buy the first shares on your own, these are all issues (price, convenience, time) to consider.

You can use a discount broker with a low stock certificate fee and do the Drip enrollment legwork yourself; you can use a synthetic Drip program like ShareBuilder or BuyandHold if their buying commissions are lower than the fees that the Drip plan would charge you for optional purchases (some Drips charge $5 per purchase, so going with an outside provider like these two services is much smarter); you can use a service like Temper of the Times, who will conveniently get the ball rolling for you at a reasonable cost; or you can get your first shares from a friend who owns shares in certificate form — they'll need to transfer them to you.

Whatever you choose, read any fine print carefully and make sure that you understand what you're doing. You can use the ongoing discussion on the board right now to help you.

We're doing so for our Pepsi purchase (thank you, everyone!) and so we'll be setting our buy process in motion by early next week. I know that is a little behind our planned schedule, but Brian's been on his honeymoon the past week (congratulations to Brian! — BrianG@fool.com) and I'm still learning about the different possibilities for getting our Pepsi Drip started. It's no big deal, long-term. I just want to pay an OK price, use a convenient process, and have a timely sign-up — as timely as possible, anyway. You should demand as much as you begin Drips.

By the way, Pepsi reported record earnings recently, too.

Other items that we want to tackle next: We'll consider what to do with Campbell Soup (NYSE: CPB), and we'll go over our poll results from last week to make more Drip Port improvements. (Vince began yesterday with a look at Harley-Davidson.) It isn't too late to vote in the poll, so please do so if you haven't.

Have a Foolish weekend!

Drip Portfolio

7/21/2000 Closing Numbers
Ticker Company Day Chg % Chg Price
CPBCAMPBELL SOUP-11/16-2.43%$27.56
INTCINTEL CORP-4 1/2-3.15%$138.19
JNJJOHNSON & JOHNSON3/80.41%$92.25
MELMELLON FINANCIAL CORP3/83.54%$40.25

  Day Week Month Year
To Date
Since
7/28/1997
Annualized
Drip -.89% -1.92% 1.29% 32.72% 72.43% 20.03%
S&P 500 -1.02% -1.97% 1.76% .74% 57.67% 16.48%
S&P 500(DA) -1.02% -1.97% 1.76% .74% 60.29% 17.13%
S&P 500(DCA) n/a n/a n/a n/a 28.57% 8.79%
NASDAQ -2.15% -3.57% 3.24% .62% 160.86% 37.89%

Trade Date # Shares Ticker Cost/Share Price LT % Val Chg
9/8/199722.9909INTC45.671$138.19202.57%
11/5/199834.9399MEL34.051$40.2518.20%
11/14/199715.019JNJ78.956$92.2516.84%
4/13/19988.337CPB54.179$27.56-49.13%

Trade Date # Shares Ticker Cost Value LT $ Val Ch
9/8/199722.9909INTC$1,050.02$3,177.06$2,127.04
11/5/199834.9399MEL$1,189.74$1,406.33$216.59
11/14/199715.019JNJ$1,185.84$1,385.50$199.66
4/13/19988.337CPB$451.69$229.79($221.90)
  Cash: $0.08  
  Total: $6,198.76  


Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.

Note
Drip Port launched with $500 on July 28, 1997, adds $100 to invest every month, and the goal is to own $150,000 in stock by August of the year 2017. Due to the slow nature of dollar-cost-averaging and our relatively significant starting costs, we do not expect to seriously challenge the S&P 500 for the first three to five years as we build an investment base. The long-term advantages of dollar-cost-averaging still overcome the short-term disadvantages, however. Final note: our investment in Campbell Soup is frozen due to fees instituted in its investment plan. Click here for a history of all Drip Port transactions.