Buying Altria (MO) For Dividends and Growth

I just executed a limit order for 8 shares of Altria (MO) at $34.15.

 

MO closed up at $34.24 yesterday.  The same day the DOW Jones closed at 14,253.77. This is the DOW Jones' new all-time high.

 

Therefore, I anticipated some profit taking so I predicted that MO would at least go down to $34.15 maybe even lower.  My gambit paid off and my limit order was completed earlier today.  I could have gone lower since MO went as low as $34.01 but I think my conservative bet was good enough.  I just want to almost guarantee that I would get those 8 shares of MO.  The main reason why is because we're approaching MO's Ex-Dividend date of March 13, 2013.  The next valid Automatic Investment Plan date is on Tuesday, March 12, 2013.  That is cutting it close since I have to buy the shares a day before the Ex-Dividend date in order to qualify for the dividend pay out.  I decided to execute it early just to make sure plus the trading fees are now $6.95 (down from $9.95) so the $3 difference would be paid for by the dividends.

 

So why Altria (MO)?  First, the dividend pay day is coming.  Second, MO's dividend pay outs increased from $0.41/share in July 2012 to $0.44/share from October 2012.  I love stocks of companies who increase their dividend payments because it tells me their earnings are doing well (after reviewing their financials of course) and they want to reward their investors with more cash. Finally, I am counting on Altria's growth prospects as the global economy improves.  As the global economy improves, MO's customers would be more willing to spend money to buy MO's E-Cigarettes, high-end cigars and wine products.  Even if MO's regular customers do not feel the improvement, they'll still continue buying Marlboro cigarettes (and other MO brands).  If there's one thing I've learned from my siblings (and Mad Men), cigarette smokers have brand loyalty. 

 

So that's pretty much my Altria thesis.  I'll buy more shares in the future and as long as smokers smoke, I'm bullish on Altria's growth prospects.

Automatic Investment Plan for May 1, 2012 Results

The Markets closed up today.  

The DOW Jones Average at 13,279.32 up 65.69 (+0.50%).

The NASDAQ is at 3,050.44 up 4.08 (+0.13%)

The S&P 500 is at 1,405.81 up 7.91 (+0.57%)

It is safe to say that my automatic savings plan purchase would be up a bit.  Here are the results of today's trading:

ETP   = 3.9240 shares @ $49.95

XLNX  = 2.6490 shares @ $36.24

WM    = 6.4473 shares @ $34.28

As you can see ETP was around $2 up from when I set-up the purchase.  Luckily, WM and XLNX were a few cents down which made up for the "pricier" ETP.

In other news, AAPL was down a lot today.  

I bet the stock is still reeling from the New York Times article that exposed how companies like Apple manage to avoid Billions of dollars in taxes by leveraging tax loopholes that primarily benefit huge corporations.  As you can imagine, public opinion on such practices have driven the stock price down.  However, I am not concerned for Apple.  If at all, I wish I had $1,000-$2,000 extra to buy more shares of Apple.  

To support my bullishness on Apple, here are some Apple news:

Apple just released and sold out tickets for their WWDC event in June and speculations are building up that the new iOS 6 software would be released at the event.  Let us also not forget that the Apple earnings call proved that sales of the new iPad, iPhones and Macs are strong.  So I expect Apple to take in more record breaking earnings numbers in the near future.