If you’d like a closer look at what my reasoning was behind each selection, I would encourage you to review them before reading on:
Waste Management
Intel
NextEra Energy
MasterCard
Chevron
Select Medical
Ford
American Water Works
Procter & Gamble
AvalonBay Communities
Today will mark the beginning of trading for this Basic Needs portfolio. As a reminder, all dividends received will collect as cash, one-time commission costs will count against the portfolio, and these stocks will be held (no trading allowed!) for a period of three years. I plan to update this portfolio every Monday to track its progress with the intent on showing how stable an influence basic needs stocks can be for your investment portfolio — and your sleep!
Let’s have one final look at the investment portfolio:
| Company | Cost Basis | Shares | Total Value | Forward P/E | Dividend Yield |
|---|---|---|---|---|---|
| Waste Management | $42.60 | 23.24 | $990.02 | 17.8 | 3.4% |
| Intel | $23.22 | 42.64 | $990.10 | 11.7 | 3.9% |
| NextEra Energy | $87.94 | 11.26 | $990.20 | 16.6 | 3% |
| Mastercard | $645.57 | 1.53 | $987.72 | 21.1 | 0.4% |
| Chevron | $124.95 | 7.93 | $990.85 | 10.2 | 3.2% |
| Select Medical | $8.96 | 110.49 | $989.99 | 9.3 | 4.5% |
| Ford | $17.50 | 56.57 | $989.98 | 10 | 2.3% |
| American Water Works | $43.13 | 22.96 | $990.26 | 18.1 | 2.6% |
| Procter & Gamble | $81.29 | 12.18 | $990.11 | 17.4 | 3% |
| AvalonBay Communities | $133.95 | 7.39 | $989.89 | 19.5 | 3.2% |
| Cash | $0.88 | ||||
| Dividends receivable | $0 | ||||
| Total commission | ($100.00) | ||||
| Original investment | $10,000.00 | ||||
Source: Yahoo! Finance.
Each week from here on out I’m going to highlight the week’s biggest stories, movers, and dividends. But since this is the inaugural week — and we’ll start down 1% because of commission costs — let’s just take a look at five interesting news events, primary earnings-driven, from the past week.
Refuse giant Waste Management, Inc. (NYSE:WM) reported its second-quarter earnings results on Tuesday and unfortunately missed the Street’s EPS estimates for a third straight quarter. The results weren’t nearly as poor as they sound, though, with revenue jumping 2% to $3.53 billion and EPS improving 16% from the year-ago period. Its biggest challenge was a decrease in commodity pricing, which reduced recycling volumes. However, over time I see this as a minimal concern as socially responsible lifestyles become more mainstream. The good news? Waste Management, Inc. (NYSE:WM)’s pricing power remains solid and it should be able to exact rate increases across the board when needed.
Sticking with the earnings theme, oil giant Chevron Corporation (NYSE:CVX) reported its second-quarter results on Friday. Like Waste Management, Inc. (NYSE:WM), the numbers on the surface failed to impress. Total income fell year over year to $5.37 billion from $7.21 billion, with revenue down $5 billion to “just” $55 billion for the quarter. Chevron Corporation (NYSE:CVX) blamed its weak results on exceptional strength from its downstream businesses in the year-ago period, and maintenance repairs to its refineries during the past quarter. On the bright side, Chevron Corporation (NYSE:CVX) remains on track to be a gigantic liquefied natural gas player with its Angola and Australian projects coming right along. Chevron Corporation (NYSE:CVX) also declared a $1 quarterly dividend payable on Sept. 10 just days earlier.
