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18Feedback - Dividend growth portfolio
Hello everyone, I have recently built up a dividend growth portfolio.
It should consist of 5 shares and these should have a low dividend yield, whereby the dividend growth should be all the higher.
I have decided on the following 5 stocks, but I am prepared to change them.
Coca Cola probably doesn't seem to be the right candidate for the portfolio or am I wrong here?
What do you think of the portfolio? Weighting? Sectors, countries?
$CNR (+0,02 %) reports Q3 2024:
Sales: 4.11B vs 4.09B expected (slight Beat)
EBIT: 1.52B vs 1.54B expected (slight Miss)
Income: 1.09B (Inline)
“Our scheduled operating plan demonstrated its resilience in the third quarter, allowing us to adapt our operations to challenges posed by wildfires and prolonged labor issues. Our operations recovered quickly and the railroad is running well. As we close 2024, we will continue to focus on recovering volumes, growth, and ensuring our resources are aligned to demand.” – Tracy Robinson, President and Chief Executive Officer, CN
I will soon have some money available to invest again, which I would like to use for additional purchases.
First and foremost, I want to further expand my ETF positions.
I would particularly like to buy more of my individual stocks at the moment:
These are all long-term positions in my portfolio, which I think are currently valued quite favorably.
What do you think of these 5 companies?
I am grateful for any input!
Your Burner
Depot update:
I have again exchanged a few of my 45 long-term individual positions for stocks that I simply feel more comfortable with for the next few years.
Once again, a brief summary of my strategy:
1) I want to bring the two large ETF positions to 25% weighting each, as the core of the portfolio.
2) I would like to hold and save the 45 individual positions for the long term, as I consider them to be good buy & hold investments that have the potential to beat the market in the long term.
3) I would like to hold cryptos at a weighting of around 5%. If the weighting exceeds 10%, I halve it again and invest the money freed up in equities.
Considerations/plans:
- Additional purchases are planned for positions that are not yet as large for me, for example. $NOC (-0,09 %) I would like each position to be at least €600
What do you think about the portfolio, what would you change?
PS: I'm not actively looking to collect a lot of dividends and I'm aware of the high number of individual stocks, so I can live with that.
Sometimes good investment opportunities are right in front of your own eyes. When I was at a production site the other day and caught sight of the countless tank cars, I got to thinking about who actually does the better business on the rails. Who makes more money on a freight train - the locomotive or the railcars? So I was more concerned with this issue, since there is still no way to invest in Canadian Pacific after the merger. I already thought about this in the following article: https://getqu.in/tWYkun/
GATX - interesting alternative to traditional logistics companies on the stock exchange.
What makes $GATX (+0 %)?
GATX is a US-based lessor/leasing provider of railcars in North America, Europe and India. This makes them one of the largest rail fleet owners in the world.
But what is the business behind it?
GATX leases the wagons directly to manufacturing companies. During the term of the contract, they are the physical property of the manufacturing companies, which have to bear the corresponding costs for maintenance and repair. Most people should be familiar with this from conventional car leasing.
They are therefore independent of the respective operating costs and operating resources that a transport company has to take into account and which, of course, cannot be neglected in view of rising energy prices, as well as independent of freight rates and order backlog.
Therefore a good alternative to the established transport companies, like $UNP (+0,26 %) , $CSX (-0,56 %) , $NSC (+0 %) or $CNR (+0,02 %) as investments.
In addition, they offer their service in maintenance. The license to maintain their wagons is transferred to external service providers and marketed. Customers are thus forced to visit contract workshops in order to be able to guarantee compliance with the leasing contracts.
The risks of the business:
However, GATX thus bears the worry of the freely available fleet and has to bear corresponding costs for each wagon that has not been leased. In addition, they are of course dependent on the freight rates of their customers in order to be able to achieve maximum capacity utilization when leasing.
Likewise, they bear the risk of the procurement costs for the construction of the respective product in the calculation.
The portfolio:
GATX has chemically resistant tank cars of various volumes and designs for liquids. This includes the respective regional standards. In addition, transport wagons for bulk goods, intermodal, general cargo and compressed gas containers.
Competition?
Hardly to be found on the stock exchange. The direct competitors are Ermewa and VTG.
Ermewa is now part of DWS. $DWS (+0,66 %) . At the same time, VTG became the property of the Abu Dhabi sovereign wealth fund at the end of 2022. The Swiss competitor Wascosa is still present, but rather insignificant in these proportions.
The takeovers of major competitors actually show the lucrativeness of the business, so other investors are left out of the equation. The business model is a flourishing cash cow with excellent future prospects thanks to higher freight rates by rail.
All in all, for me a nice American second-tier stock with growth prospects. At the moment, however, I am waiting with an investment until the economy improves again for the industrial stocks on the active continents. As a bonus, there is always a nice little dividend.
Got on the wrong track?! - I think not.
Hello,
For a long time I was unsure about building up further positions even outside my actual investment sector. So I actually researched for weeks about the most promising opportunities within the logistics industry, outside Europe.
In the end, I was forced to look only at North America. The U.S. logistics companies are out of the question for me, since I actively manage the S&P 500 as an ETF. These positions are therefore covered.
That leaves Canada and Mexico.
Thus I selected now between 3 considerable shares of the regions and came to the selection between Canadian Pacific $CP , Canadian National $CNR (+0,02 %) and Grupo Mexico $GMEXICOB (+0,69 %) as parent of Ferromex (railroad company of Mexico). To further spread my country risk, I decided to include only one Canadian and the Mexican only under circumstances.
So the following is my background on Canada:
CNR vs. CP
Financial comparison:
The individual data can be seen everywhere. Therefore, I do not want to go into it explicitly here.
Crucial for me:
CNR has a market capitalization of about €74 billion and a milder valuation with a P/E ratio of about 22 than CP with a market capitalization of €65 billion and a P/E ratio of almost 28.
The margins are quite similar at about 50% EBITDA on a rough average until 2016. So no big qualitative difference either.
So I came to the conclusion that the financial prospects respectively could not give me any insight. So I researched further.
The route network and the rivalry between the railroad companies.
Both are Canadian "class one" railroads. So both must generate gross revenues of at least $250 million in the last two fiscal years. No problem for such giants. So you have a total of 7 companies in this class in the USA and Canada.
So I compared the route network.
CP has a route network of about 13,000 miles, or about 21,000km. The network runs along the Canadian major industrial centers from Vancouver to Montreal in Canada, as well as in the northern USA in the former "Rust Belt" along the Great Lakes and major commercial hubs in the Midwest. The busiest route is Calgary - Vancouver.
CNR has a larger route network of about 32,000km from Halifax in the east to Vancouver in the west. Here, too, the most important Canadian industrial metropolises are located along the routes. In the USA, on the other hand, the company has an even greater presence. Here, too, the company is represented along the metropolises of the former "Rust Belt" and along the Mississippi River as far as southern Alabama.
Theoretically, CNR would be able to declare the point for itself in this category.
So I went a decisive step further:
The most important corporate hubs.
Along CNR's route network are major U.S. metropolitan areas and transshipment hubs, such as Chicago, Memphis and New Orleans. Canadian main transshipment points represent Halifax, Montreal, Toronto, Winnipeg, Edmonton, Vancouver and Prince Rupert.
Especially the connection between the western port metropolises Vancouver and Prince Rupert, as well as the southern port place New Orleans and the east coast with Halifax represents the main trade connections of the world within its own network.
Thus, Canada represents the internal trade center to the world. If we now take the average economic growth of Canada in comparison with the USA as a starting point, there is definitely a need to catch up. Especially with regard to announced investments of international corporations in affected regions.
With the takeover of Kansas City Southern, CP can build on a comprehensive rail network that extends into the depths of Mexico. It also gives access to New York City, a global trading center, and Calgary, Canada's metropolis of the future. Furthermore, Vancouver, Winnipeg, Toronto and Chicago are also accessible. However, since these are also to be named as trading centers at CNR, the difference in this respect is marginal and negligible. In particular, however, the depth of the route through the merger now enables completely new trading perspectives.
In particular, the route network of Kansas City Southern Railway now has a huge impact on the freight-rich American southern states of Louisiana, Texas and Mississippi. Beyond that, into the depths of Mexico.
The "Inflation reduction act" and its conceivable effects.
Hardly any other topic moved the U.S. stock markets in 2022 as much as the adoption of a gigantic subsidy package for the U.S. economy. Recognized goal of this: A sustained reduction in emissions and inflation combined with a new economic miracle. As a result, many international corporations have already made decisions to open new factories in the USA. This should strengthen the future securing of freight traffic. In particular, the southern states of the USA and the border regions to Mexico should benefit massively from short supply chains and renewable energy in the future, but still stimulate the transnational intermodals.
So in the course of that, I now decided to do CP. At this point I would like to @Gerit thank you. The great inspiration made me think about rail transport as an investment option.
.
Furthermore I decided to place 2 limit purchases on Grupo Mexico. The overall ratio in the rail sector for the portfolio should be 2/3 CP and 1/3 GM.
Grupo Mexico is not only the largest mining group in Mexico and therefore the third largest copper producer in the world. The subsidiary of Ferromex is also in the portfolio. This is the largest Mexican railroad company.
Thus, two factors that will gain importance in the future. Copper is and will remain an indispensable component of future technologies.
In summary, with the addition of these two stocks in combination with the S&P 500, I now have a replica in the portfolio of the almost complete rail network of North America.
However, neither is in the portfolio yet. The plan is to build a savings plan over 10 months on CP. The first execution has already taken place. However, the ISIN change is now imminent, which is why it is paused until it is available again.
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