I'm Buying These 2 DIVIDEND STOCKS (Market Is Down)

The stock market is dropping, so I'm buying high-quality dividend stocks at value prices! I'm excited to cover the 2 value stocks that I purchased this week at great prices. I'm also excited to cover an analogy that illustrates the tradeoffs one makes when investing in different types of dividend stocks.
#dividend #stock #investing

0:00 INTRODUCTION: CPI inflation data is high, so the stock market is correcting.
0:12 Near-term interest rate cuts are unlikely.
0:29 As stocks trend down, starting dividend yields go up.
0:53 I bought 2 dividends stocks this week.
1:12 SEGMENT 1: ANALOGY (BUYING TREES)
2:06 Scenario 1: Buying two large, mature trees for $500. They bear a lot of fruit immediately. But, they are not growing as quickly anymore.
2:51 In my analogy, the fruit on the trees represent dividends.
2:54 This scenario is a current yield situation, like Pfizer (PFE) stock.
4:02 Scenario 2: Buying, many small trees for $500. They bear a small amount of fruit, but it will take years for them to grow to their full potential.
4:38 Over time, these small trees could grow and surpass the fruit yield from the 2 large trees in Scenario 1.
5:00 This example illustrates Starbucks (SBUX) stock.
5:28 Check out my Patreon in the pinned comment below.
5:40 SBUX offers some dividend yield now, but the value really lies in future growth. This is a yield-on-cost scenario.
6:08 This Scenario 2 takes a long-time to pay off (and surpass Scenario 1).
7:51: SEGMENT 2: PFIZER (PFE) DIVIDEND STOCK ANALYSIS
8:08 I love their forward PE of 12.15 (2024) and 9.68 (2025).
8:27 They offer 6.29% starting dividend yield (which is growing at about 3% per year).
8:42 Parallel to PFE and commercial real estate properties.
9:20 Side Note: Coming back from vacation.
10:05 Vacation is a reminder of what the dividend dream lifestyle could look like.
10:48 SEGMENT 3: STARBUCKS (SBUX) DIVIDEND STOCK ANALYSIS
10:55 I'm surprised to see SBUX down 25% from the 52-week high (which was not overvalued IMHO).
12:00 The forward PE is 21 (2024) and 18 (2025). This is low for a quickly-growing enterprise like SBUX.
12:27 The starting dividend yield is 2.65%, but the dividend growth rate is 9.63% per year, on average.
13:20 SEGMENT 4: WHY DID I BUY BOTH STOCKS?
13:49 Part of me wants to buy immediate yield.
13:59 Fire is a continuum. The more cash flow I have coming, the more I can have balance.
14:34 I know from personal experience that dividend growth investing works. PG just increased their dividend by 7%. My 1st tranche simple dividend yield-on-cost is now 6.6%.
15:52 Starbucks is about 11% of my portfolio, but I'd be fine doubling my position from here.
17:03 DISCLOSURE AND DISCLAIMER

DISCLOSURE: I am long Pfizer (PFE), Starbucks (SBUX), Philip Morris (PM), and Procter & Gamble (PG). I own these stocks in my personal dividend stock portfolio. My kids are long Disney (DIS).

DISCLAIMER: All information and data on my YouTube Channel, blog, email newsletters, white papers, Excel files, and other materials is solely for informational purposes. I make no representations as to the accuracy, completeness, suitability or validity of any information. I will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided AS IS with no warranties, and confers no rights. I will not be responsible for the accuracy of material that is linked on this site.

Because the information herein is based on my personal opinion and experience, it should not be considered professional financial investment advice or tax advice. The ideas and strategies that I provide should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. My thoughts and opinions may also change from time to time as I acquire more knowledge. These are, as discussed above, solely my thoughts and opinions. I reserve the right to delete any comments for any reason (abusive in nature, contain profanity, etc.). Your continued reading/use of my YouTube Channel, blog, email newsletters, whitepapers, Excel files, and other materials constitutes your agreement with and acceptance of this disclaimer.

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Something has to be done about this money printing and ridiculous government spending. The whole country will end up like California and New York soon if it keeps us

[Dramyxx]

I had a similar approach! I bought 25 shares of DGRO and 5 shares of SBUX yesterday! 30 years old, so I have a 20+ year time-frame! Keep up the great work!!!

[OurRetireEarlyJourney]

Added LOW, CAT & JPM yesterday to our portfolio while the market was down. Also finally started into SCHD when it was down almost 2% yesterday.

[mattcarvalho]

Love that Starbucks is one of your picks. I like where it's at right now and have been buying small tranches here and there. I will continue to do so if it continues to trend downward. Hard to ignore the value of PFE right now too.

[livefree]

I do something similar to yourself, multiple strategies. The higher yielders are great for more cash now/short term future and those dividend payments are motivating. I have a few higher dividend paying favorites like O and the cigarette companies that pay more now. I also LOVE me a good growth machine like V, MA, MSFT, and the like where it's not so much cash now, but I know that in over 20 years when I actually want to live off my dividends, these companies will be paying me a handsome sum.

I LOVE the way you explain higher yield now vs higher growth. Yours is one of the channels I always recommend for newer investors to get the fundamental concepts down.

[ThirdPlanetRocks]

Every day at lunch I add shares to 1 of my 10 dividend buckets. Today was SBUX ☕️

Been watching you since 2019! I love the structure and routine dividend investing has brought to my day. Keep rockin Ian 🙂

[DrNoSpectre]

Great video! I bought SBUX, JNJ, NKE, VICI the past week

[spaniard]

Currently buying SBUX and UNH while their prices are under pressure

[stockjock]

I've been buying BMY. Looks grossly undervalued due to fear over impending patent cliffs, but they have a deep pipeline, plenty of FCF for div growth and buybacks too.

I'm also becoming more interested in SBUX. They are still expanding globally opening more stores and people will buy Starbucks drinks in any economy good or bad. As you say, its a simple pleasure that can be enjoyed in stressful times. Plus, I need a position that offers a high dividend CAGR.

Thanks for the video, Ian! 😃

[realmadridkaka]

@ppcian are you worried about potential dividend cut for PFE if they can’t make their recent acquisitions work? I’ve been slowly nibbling but still a bit hesitant as it is a real possibility in my opinion. Love to hear your thoughts

[joep]

Love SBUX also. It’s my third largest position and I’ve been happily adding during this downturn.

[michaldanis]

i think that lot of investors really forget to compare low and high div. yield stocks from time perspective. We must consider that corporation that brings a lot of immediate cash back thru dividends is valuable more. As these funds can be then re-invested almost immediately to build even bigger portfolio. For starting investors the only way how to get the snowball rolling quickly is to put in as much money as they can. First years the investors own income is main stream of money to develop the portfolio, dividends build only small portion of income from beginning, and with time being this ratio changes in favor of dividends.

If you would buy PFE and SBUX for 1000 usd, where PFE would increase dividend 2%annualy and SBUX 9% annually, it would take at least 20 years till both dividend cumulative totals will equal. Only after year 20, SBUX would overwhelm PFE with dividends.

Upper example only considers Dividends based on current yields. Not the stock value growth. That is different story. And we also need to make sure that company with higher yields is big, stable, and of course cheap. I would say every investor must do his math.


in regards of PFE vs SBUX, if i could i would probably buy both today.

[varfalvitamas]

In this drop I bought SBUX, PM, BTI, VICI, ADC, MCD, JNJ, BMY
Sold MO, XOM

[samsargent]

I really like the fruit tree analogy, it's perfect for dividend investing! Like you, I have been adding SBUX, I think they have been hurt by the events in the Middle East, along with MCD. Great video, thanks for all you do.

[albertozeledon]

I sold puts on Starbucks at 89$, So now I’m currently holding 107 shares average cost 88.87$, for the long term and keep DCA

[juergenmueller]

I`am buying Texas Instruments, Amgen and Air Products&Chemicals - all good dividend stocks and all a little bit in weakness - just my two cents..

[asphaltandtacos]

I dropped SBUX from my portfolio. I am considering adding JPM and UNP to my portfolio.

[paulronan]

Thanks Ian!! Appreciate all you do and the discussion

[MichaelRWright]

Liked and Subscribed (ALL). I've just purchased SBUX in the month of March. I currently have 155 shares and also want to purchase more.

[doubleseven]

Ian, re qualified gains on $PPE. Qualified status is determined by the holding period. It’s not that certain companies are qualified and some aren’t. You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. So it’s a holding period thing. Not a specific stock is qualified or not. I should say though, non US based companies won’t qualify for qualified. IRS code.