Combating 2014's Icy Start

Solid companies continue to operate, even when the market heads south.

Jan 7, 2014 at 8:06PM

The market started off 2014 with losses in its first couple of trading sessions, losing the incredible buoyancy that it showed throughout most of 2013. Weak manufacturing data out of China started the sell-off that spread over to the states. The market's chill was matched only by the weather itself, as Winter Storm Hercules rampaged across much of the country.

Still, for the real-money Inflation-Protected Income Growth portfolio, the weather and market conditions were no match for consistent execution and a commitment to deliver on promises. Three companies paid their expected dividends over the holiday-shortened and ice-covered week, and the portfolio made good on its promise to buy its newest selection. While the portfolio did drop a bit less than 0.75% in market value since last week's update, that's almost an expected level of noise in the system.

Promises kept
Last Tuesday, Becton, Dickinson, & Co. (NYSE:BDX) finished off 2013 in awesome style, paying its owners, including the iPIG portfolio, a $0.545-per-share dividend. That's around a 10% increase versus what the medical-devices company paid the previous quarter. That dividend increase showcased Becton, Dickinson's ability to thrive despite the relatively new tax burden levied on medical-device manufacturers like it.

Similarly, railroad giant Union Pacific (NYSE:UNP) started the New Year by delivering its promised dividend on Thursday, its second at $0.79 per share. That dividend is up almost 14.5% from the $0.69 per share Union Pacific paid around the same time a year ago.

Auto parts titan Genuine Parts (NYSE:GPC) also celebrated the New Year by handing its shareholders a dividend on Thursday. Genuine Parts' $0.5375 per share is the company's fourth dividend at that level. If the company keeps to its recent pattern, we should know by mid-February if Genuine Parts will be able to keep its string of dividend increases alive. 

In addition to the dividends it received, the iPIG portfolio bought shares of lawn care company Scotts Miracle-Gro (NYSE:SMG) on Friday, per its selection article last Monday. Scotts Miracle-Gro looked like an attractive pick for the portfolio due to its solid balance sheet, recent trend of increasing its dividend, and reasonable valuation.  

In addition, Scotts Miracle-Gro was recently able to refinance its debt at lower rates and relax some restrictive covenants from its credit facility. That improved borrowing profile should help Scotts Miracle-Gro reach its margin improvement goal for 2014, which would help solidify its valuation.

Life and business go on
All told, despite the icy start to 2014, last week's dividend payments serve as a key reminder that healthy businesses continue to operate as expected, regardless of what the market does to their stocks. In addition, the iPIG portfolio was able to pick up its shares in Scotts Miracle-Gro for less than they traded the day its selection article was published. That shows the upside of the down market that greeted us at the start of 2014; prices are better for those looking to buy.

All told, the table below shows the state of the iPIG portfolio as of the market's close on Jan. 3, 2014:

Company Name

Purchase Date

Total Investment (including commissions)

Value as of
Jan. 3, 2014

Yield as of
Jan. 3, 2014

United Technologies (NYSE:UTX)

Dec. 10, 2012




Teva Pharmaceutical (NYSE:TEVA)

Dec. 12, 2012




J.M. Smucker (NYSE:SJM)

Dec. 13, 2012




Genuine Parts (NYSE:GPC)

Dec. 21, 2012




Mine Safety Appliances (NYSE:MSA)

Dec. 21, 2012




Microsoft (NASDAQ:MSFT)

Dec. 26, 2012





Dec. 28, 2012




United Parcel Service (NYSE:UPS)

Jan. 2, 2013




Walgreen (NASDAQ:WBA)

Jan. 4, 2013




Texas Instruments (NASDAQ:TXN)

Jan. 7, 2013




Union Pacific (NYSE:UNP)

Jan. 22, 2013





Jan. 22, 2013




McDonald's (NYSE:MCD)

Jan. 24, 2013




Becton, Dickinson (NYSE:BDX)

Jan. 31, 2013





Feb. 5, 2013




Air Products & Chemicals (NYSE:APD)

Feb. 11, 2013




Raytheon (NYSE:RTN)

Feb. 22, 2013




Emerson Electric (NYSE:EMR)

April 3, 2013




Wells Fargo & Co (NYSE:WFC)

May 30, 2013




Kinder Morgan (NYSE:KMI)

June 21, 2013




Scotts Miracle-Gro (NYSE:SMG)

Jan. 3, 2014








Total Portfolio





Data from iPIG portfolio brokerage account, as of Jan. 3, 2014.

Get rewarded for owning businesses, not just stocks
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To follow the IPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the IPIG portfolio, simply click here.

Chuck Saletta owns shares of Aflac, Air Products & Chemicals, Becton Dickinson, CSX, Emerson Electric, Genuine Parts Company, Hasbro, J.M. Smucker, McDonald's, Microsoft, Mine Safety Appliances, Raytheon Company, Teva Pharmaceutical Industries, Texas Instruments, Union Pacific, United Parcel Service, United Technologies, Walgreen Company, Scotts Miracle-Gro, Kinder Morgan, and Wells Fargo.

The Motley Fool recommends Aflac, Becton Dickinson, Emerson Electric, Hasbro, Kinder Morgan, McDonald's, Mine Safety Appliances, Teva Pharmaceutical Industries, United Parcel Service, and Wells Fargo. The Motley Fool owns shares of CSX, Hasbro, Kinder Morgan, McDonald's, Microsoft, Raytheon Company, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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