Where to invest my next €1,800? – Updated

So I have €1,800 that I’m looking for a good home for. Preferably in a dividend stock, but some possible capital gains could be nice too.

Here’s what I’m looking at right now:

Target (TGT): Target sell general merchandise across the US and Canada. As of September 15, 2014 (2.5 years ago now), the company operated 1,925 stores, including 1,795 stores in the United States and 130 stores in Canada. Target has been in a lot of trouble recently. Data breaches, slow Canadian expansion and poor earnings last quarter means the shareprice has tanked from a 52 week high of $84 to $54 as of today. EPS remains positive however and dividend yield is 4.4% with P/E of 11.88 which are both good signs. Interestingly I see FIRE bloggers going on about selling TGT, but yet simultaneously affirming that once the expected market correction comes they will hoover up cheap stock. Huh?! Wouldn’t you invest more into it now then? Target has pretty much flatlined in the past month and that’s where I like to think that it will not drop much further, though it very well could. Target would yield $79.57 in pre-tax dividends (assuming the current $2.4 per share remains) which is a lovely 4.4% yield as well as some decent capital gains if it recovers.

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Next on the list is AT&T (T):  I have only just purchased into AT&T. Why should I buy more? This company is a dividend aristocrat alongside Target. It’s also just had its acquisition of Time Warner signed off by the European Commission. My concerns with AT&T were that it expects reduced subscriber growth and that it would need to diversify and it’s doing just that. I have faith that this stock could rise considerably. There is a lot of positive analysis out there on AT&T. The only thing is that it’s lumping a lot of cash into one equity – and considering I’m just getting rolling, I’m a bit nervous of that. I could be sorry later if I don’t move now though. That $1,800 would get me $82.79 in pre-tax dividends (at $1.96 per share), a nice healthy 4.6% yield.Screen Shot 2017-03-18 at 00.20.12.png

Curveball thought for the day is DDR Corp (DDR): This a retail REIT that invests in shopping malls and retail estate across the US and Puerto Rico. DDR has recovered from negative earnings per share in the third quarter last year to positive earnings per share. It’s stock price dropped due to fears of interest rate hikes. Don’t we always hope to buy when the price is low to make good returns? DDR’s yield is at 5.75%, my $1,800 would give me $104.5 in dividends although its expected they will hike the dividend this year. That would allow me to purchase another 7 shares for next years dividends. DDR in the last two years rolled out increases of 10.1% and 11.3% in dividends, respectively.  The share price hasn’t been this low since 2013, I’m slightly worried that this is a high risk investment and that DDR could collapse completely.

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I’m still doing lost of research on lots of different companies across several industries.

 

What would you invest in if it was you?

 

Update 23/03/17:

Today I purchased $1,100 worth of Target shares. I had gone back and forth and was reading lots of SeekingAlpha articles and looking at the Yahoo finance numbers and this article stood out to me, stating that if you ignore the 92% of earnings received by Target through its physical stores, the remaining 8% still beats Amazon’s earnings in the fourth quarter last year.

Now it’s looking a lot more attractive!

 

Update  27/03/17:

This month, in addition to the Target shares purchased, I have also invested in

  • AGNC 
  • IFGL
  • IEMG
  • VTI 

AGNC I had shares in already. I tend to dip my toe in the water for a while with a stock before I sink a lot of money into it. This month I substantially increased my holding in AGNC. It’s a REIT which must distribute 90% of its taxable income back to its shareholders. I’m unsure how this one will perform but it looks good and yet seems to be overlooked somewhat on the market so that’s good for me. It’s dividend yield is at 10.95% which is lovely…for now.

IFGL is an iShares international real estate ETF.   Most of its holdings are in Asia. It has a 7.34% dividend yield.

IEMG is an iShares index fund for emerging markets. Since most of my other investments apart from IFGL are US-based, I’m happy to diversify outside of the US a bit, and I like the performance of this fund. The dividend yield is only 2% – I bought this one in the hope of capital gains as it is in a bit of a dip at hte moment.

VTI is Vanguard’s Total Stock Market Index. It seems to be one of the stars of the ETF world, and yet I feel a bit half-hearted about it.  Performance is good, but not really beat-the-market. Maybe I need some more or better analysis on this one – it is the smallest of my holdings.

2 Replies to “Where to invest my next €1,800? – Updated”

  1. TGT is quite oversold at recent levels; could be a good purchase. I personally really like QCOM besides of the continuous legal disputes. Chip making has a great future. CSCO can benefit greatly if the US tax environment changes and offshore money would be repatriated. From tree REITs I like HCP as a long term investment. Shell has super dividend yield, but oil price will have a big impact on them (either way). AT&T is not bad either, but wouldn’t be my first pick to be honest. From Europe I still like Unilever (although share price went up lately) and Sanofi.
    I’m not sure if I helped or made you more confused. Whatever you choose, try to diversify (I’d actually spit the 1.8k into two purchases) and hold for long term!
    I’m interested to hear what you chose at the end of the day!

    1. Thanks for your comment Roadrunner. You have a great blog going on. Indeed TGT is looking good at the moment. QCOM is just recovering from being overbought during Feb, I feel it could drop a bit. I do like CSCO outlook. I wouldn’t touch Shell on ethical grounds (Ireland and Shell are not friends!). Good advice on the split, I had been thinking about doing that. I’ll be buying in next week so still got time to research anyway! Will update the blog when I’v made the choices 😉

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