Shopping for Stocks – the Best Kind of Shopping!
I didn’t really know where to begin this month. There were so many stocks I wanted to buy! This is due to reviewing my most recent watchlist in conjunction with recent downwards price movements. But of course, I couldn’t buy all of them, so I decided to sock away as much money as possible and then I would be able to to add to my position in National Grid, as well as purchase two entirely new stocks.
Beazley plc is a holding company engaged in global specialist risk insurance and reinsurance business. Its segment includes life, accident and death, underwrites life, health, personal accident, sports and income protection risks; marine , underwrites a broad spectrum of marine classes including hull, energy, cargo and specie, piracy, aviation, kidnap and ransom and war risks; political risk and contingency, underwrites terrorism, political violence, expropriation and credit risks; property, underwrites commercial, high-value homeowners and construction and engineering property insurance; reinsurance, specializes in writing property catastrophe, property per risk, casualty clash, aggregate excess of loss and pro-rata business, and specialty lines , underwrites professional liability, management liability and environmental liability, including architects and engineers, healthcare, lawyers, technology, media and business services, directors and officers and employment practices risks.
I’m not an enormous fan of insurance companies, but Beazley has been cropping up on my watchlist for a long time, and since I don’t have any insurance stocks after T having gotten rid of his holding in Standard Life, I decided it was time to get a little exposure. As is my usual way – I mostly go for stocks with a dividend cover of 2, a PE of less than 20, and 7 years’ or more of increasing dividends at a minimum of 2% p.a. yield, with a minimum of 2% dividend increase every year. I occasionally break these rules, such as with National Grid (because they’re an entrenched, relatively safe payer), but Beazley easily fulfils my basic screening criteria.
One of the special attractions to Beazley is that they have a very high dividend cover, and have a history of paying out their excess money in the form of special dividends. I do not count special dividends as part of dividend history, but it’s certainly nice to get some bonuses every now and again! The share is going ex-div TOMORROW, so if you want to get in on some special dividend action, you better hurry up and trade!
Interserve Plc, based in the United Kingdom, is a support services and construction company. The Company offers advice, design, construction, equipment, facilities management and front-line public services. It operates through the following segments: Support Services, Construction and Equipment Services, and Investments. The Support Services segment provides a range of outsourced services to public and private sector clients both in the United Kingdom and the Middle East. Its Construction segment offers services such as designing, construction and maintenance of buildings and infrastructure, both in the United Kingdom and through Middle East associates. The Equipment Services segment is engaged in the designing, hiring and selling of formwork, falsework and associated access equipment. Its Investments segment offers transaction structuring and the management of the Company’s project finance activities.
There have been quite a few companies from this sector in my watchlist of late, so I am guessing the sector as a whole is experiencing some pressure. I already own Carillion in this sector, and they have been paying me handsomely, but they technically don’t tick all the boxes of my investing criteria, namely that they haven’t been increasing their dividend by 2% or more p.a. As such, they dropped out of my watchlist by a very tiny fraction. I’m still happy with them, so I don’t have any reason to sell, but since they don’t fit my criteria, I thought I’d buy a different company in this sector instead to increase my exposure.
One of the great things about Interserve, is that they also have a good history of dividend cover. Not crazily high like Beazley (running at 4+), but Interserve’s cover has been over 2 for several years. They fit all my criteria easily, and I also suspect they may be the subject of a takeover bid in the near future, so that might boost my returns.
I’m pretty happy with being able to do 3 purchases this month, as sometimes I am scraping to make one – which I always like to do as a minimum. Luckily, I’m also getting a bit of extra money from work for something I assumed I was doing voluntarily, so guess where the money’s going? Yep, hopefully will be able to make some more decent purchases at the end of March. Lastly, I managed to put £100 into my Funding Circle account. I’m a big believer in SMEs, so it’s really important to me that I support these small businesses to grow. Yes, they can be risky, but as I only lend in batches of £20, I am extremely cautious. I am waiting on one remaining bid of £20, the other £80 has already been lent out.
What purchses did YOU make this month? Let me know, leave a comment below.