This turned out to be yet another red day pretty much everywhere. Volatility is a friend though so I went ahead and bought another 12 shares of Deere & Co (NYSE:DE) for 83,25 USD per share. This puts the yield at 2.88% together with a low payout ratio which provides decent margin of safety on the dividend department. For me the short term guidance doesn’t mean that much as the long term fundamentals are still there. This is a cyclical company operating in a sector which might never be fashionable but I actually prefer (some of) my stocks dull. Eventually they will benefit from major trends such as growing population and increasing demand for efficient food production. This is my second purchase which I was originally planning to do quite some time ago when the share price was around 81 dollars. At the time I didn’t have enough cash to deploy and the price soon started climbing but better late than never. Next purchase will hopefully be done during Q1/2016 but it’s obviously depending on the valuation at the time.
Speaking of cyclical, BBL is starting to look interesting as well. There are some risks involved and it’s very difficult to come up with a solid vision on how the situation in China and world economy will play out during the next months or even years. Long term fundamentals are there but if we are looking into a lengthy bear market and slowing economy, they might not be able to sustain their current dividend or at least it might prove to be difficult.
Links: http://finance.yahoo.com/news/deere-profit-falls-40-percent-111410901.html