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United Technologies Corporation (UTX), Microsoft Corporation (MSFT): Why Low-Maintenance Investing Rules

Over the past two weeks, life has been more chaotic than usual for our family. We’ve dealt with no less than:

  • The unexpected passing of my wife’s aunt.
  • My stepfather’s surprise hospitalization.
  • Two cross-country business trips one of which was last-minute.
  • Several make-up ball games for our kids’ ball teams, thanks to the very wet spring we’ve had.

Suffice it to say that we’ve been preoccupied with several life priorities recently that have very little to do with investing.

Still, the market doesn’t care whether we’ve been paying attention to it or not, and it will keep shifting prices around whether we’re actively moving money around or just sitting still.

United Technologies Corporation (NYSE:UTX)

Life happens. Invest anyway.
As the past two weeks have reinforced, there are so many more important things to do than sit around and watch a computer screen watching stocks move up and down. That’s one key reason the real-money Inflation-Protected Income Growth portfolio is structured so that much of its rewards come from the success of the businesses it partially owns, rather than their share-price movements.

While it’s true that the portfolio is down a touch more than $100 since last week’s update, it was also an incredible week for those rewards. Six of the 20 companies whose stocks make up the IPIG portfolio paid their dividends last week, a nice boost for a portfolio that ran without any sort of supervision during that time.

Two of those companies, railroad tycoon CSX Corporation (NYSE:CSX) and safety equipment provider Mine Safety Appliances (NYSE:MSA), paid out higher per-share amounts than they did last quarter. Both raised their payments by about 7% — with CSX Corporation (NYSE:CSX)’s moving from $0.14 to $0.15 per share and Mine Safety Appliances (NYSE:MSA)’ rising from $0.28 to $0.30.

Two of the others, industrial conglomerate United Technologies Corporation (NYSE:UTX) and pharmacy retailer Walgreen Company (NYSE:WAG) , paid their fourth consecutive quarterly dividend consistent rates. United Technologies Corporation (NYSE:UTX)’ dividend has been at $0.535 per quarter while Walgreen Company (NYSE:WAG)’s has been at $0.275 per quarter.  While nothing is guaranteed until the board declares a change, if Walgreen Company (NYSE:WAG) follows its recent pattern, its next quarter’s dividend declaration may very well be a raise.

United Technologies Corporation (NYSE:UTX), on the other hand, has already declared that its dividend will remain static at $0.535 for a fifth consecutive quarter. That’s in line with the company’s recent history and isn’t really surprising. Still, after that upcoming dividend, the company would also be due for an expected increase. The IPIG portfolio does count on increasing dividends to provide the inflation-protection that it aims to achieve, and an increase would go a long way toward helping the portfolio reach that goal.

The other two dividend payers from last week, software titan Microsoft Corporation (NASDAQ:MSFT) and industrial engineering giant Emerson Electric Co. (NYSE:EMR), hit their third quarters at consistent rates. Microsoft Corporation (NASDAQ:MSFT)’s dividend has been at $0.23 per quarter, while Emerson Electric Co. (NYSE:EMR)’s has been at $0.41 per quarter. As with United Technologies Corporation (NYSE:UTX), Microsoft Corporation (NASDAQ:MSFT) has already declared a consistent dividend for next quarter, while Emerson Electric Co. (NYSE:EMR) is expected to declare an unchanged dividend in August.

Don’t work — still get paid
Perhaps the best part of the week was that those payments — two increases, and four steady — came while “life happened,” with no additional work needed on the IPIG portfolio’s (or its manager’s) part. Every company in a portfolio does need to be reviewed occasionally to be sure it’s still worth owning, but it’s sure comforting to know that it’s possible to invest while still having a life outside the market.

By focusing on the companies behind the stocks and the income they generate for their owners, the IPIG portfolio can afford to be fairly low-maintenance while still being on track to meet its goals. That combination is a great one to have for people who want the rewards of investing without the need to constantly tweak and heavily manage their holdings.

iPIG portfolio snapshot as of June 14, 2013

Company Name Purchase Date No. of Shares Total Investment (Including Commissions) Current Value
United Technologies 12/10/12 18 $1,464.82 $1,692.36
Teva Pharmaceutical 12/12/12 38 $1,519.40 $1,485.04
J.M. Smucker 12/13/12 17 $1,483.45 $1,751.17
Genuine Parts 12/21/12 23 $1,476.47 $1,808.72
Mine Safety Appliances 12/21/12 36 $1,504.96 $1,648.44
Microsoft 12/26/12 55 $1,499.15 $1,892.00
Hasbro 12/28/12 43 $1,520.60 $1,895.87
NV Energy 12/31/12 84 $1,504.72 $1,979.88
United Parcel Service 1/2/2013 20 $1,524.00 $1,718.20
Walgreen 1/4/2013 40 $1,501.80 $2,007.20
Texas Instruments 1/7/2013 47 $1,515.70 $1,667.56
Union Pacific 1/22/13 6 $805.42 $942.12
CSX 1/22/13 34 $712.50 $847.96
McDonald’s 1/24/13 16 $1,499.64 $1,574.72
Becton, Dickinson 1/31/13 18 $1,518.64 $1,775.52
AFLAC 2/5/13 27 $1,466.35 $1,552.77
Air Products & Chemicals 2/11/13 17 $1,510.99 $1,637.95
Raytheon 2/22/13 27 $1,473.91 $1,820.07
Emerson Electric 4/3/13 28 $1,548.12 $1,571.92
Wells Fargo 5/30/13 37 $1,525.48 $1,485.92
Cash $1,735.68

Data from the IPIG portfolio brokerage account, as of June 14, 2013.


The article Why Low-Maintenance Investing Rules originally appeared on is written by Chuck Saletta.

Chuck Saletta owns shares of AFLAC; Texas Instruments; Microsoft; McDonald’s; Genuine Parts; United Technologies; Teva Pharmaceutical Industries; Emerson Electric; Becton, Dickinson; Walgreen; Union Pacific; Hasbro; United Parcel Service; CSX; J.M. Smucker; Air Products & Chemicals; Mine Safety Appliances; NV Energy; Raytheon; and Wells Fargo. The Motley Fool recommends AFLAC; Becton, Dickinson; Emerson Electric; Hasbro; McDonald’s; Mine Safety Appliances; United Parcel Service; and Wells Fargo and owns shares of Hasbro, McDonald’s, Microsoft, Raytheon, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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