A portfolio of stocks I'm building, named Ivy, holds 52 dividend dogs. Ivy is the fourth portfolio I've built (at a one dividend dog per week pace) since 2014. Four portfolios = IV!
Today I'm reviewing the third of five materials sector stocks this week striving to become the ninth of nine from that sector to join the Ivy folio. This is the last pick for Ivy!
This materials sector includes thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; steel; paper; silver; specialty chemicals; gold.
Today I'm reviewing a large-cap building materials company named LaFargeHolcim Ltd. Their trading ticker symbol (ADR) is HCMLY. I last reported on this company on March 2, 2018.
LaFargeHolcim is a leading producer of cement, aggregates, and concrete, with operations in around 80 countries. Cement is its main product, with 313 million metric tons of capacity worldwide at the end of 2018. Geographic diversification is one of the firm's key strategies.
LaFargeHolcim Ltd was founded in 1833 and is headquartered in Jona, Switzerland. The company was formerly known as Holcim Ltd. and changed its name to LaFargeHolcim Ltd in July 2015.
I use three key data points to gauge dividend paying equities like HCMLY:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest or not. Those three basic keys, however, best tell whether a company has made, is making, and will make money.
HCMLY Price
LaFarge's price per share closed at $9.37 yesterday. A year ago its price was $9.87. In a year its price fell $0.50 or 5%.
Assuming LaFarge's stock trades in the range of $8.00 to $12.00 this year, LaFarge's recent $9.37 price could rise by $0.63 and go to $10.00 by August, 2020.
HCMLY Dividends
LaFarge's latest declared annual dividend was $0.41 paid July 10th.
That $0.41 payout yields 4.38% based on yesterday's $9.37 closing price.
HCMLY Gains?
Adding the $0.41 annual estimated dividend to my $0.63 estimate of LaFarge's price upside shows a $1.04 potential gross gain, per share, which will be reduced by costs to trade these shares.
Say we put a little under $1,000.00 today at the $9.37 recent stock price, we'd buy 106 LaFargeHolcim (HCMLY) shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.09 per share.
Subtract that $0.09 brokerage cost from the estimated $1.04 gross estimated gain leaves a net gain of $0.95 X 106 shares = ($100.70) or a 10.1% net gain on a $993.22 investment.
Therefore, LaFargeHolcim now shows a possible net gain of 10.1% including a 4.38% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if LaFargeHolcim is worth your time and money.
Comments
Log in or sign up to join the conversation.