IT'S MUCH HARDER TO INVEST A LITTLE THAN A LOT

When deciding on a new stock investment, I find it more difficult to invest a small amount of money, than investing larger amounts.  Well duh, you might say, but what I really mean is, I spend a lot more time evaluating stocks before making a final investment choice, because I'm more aware of the need to get the most bang for the buck. 

For instance, my quarterly IRA investment is coming up in April and it was a tough choice deciding where to put my money to work.  I finally narrowed my choices down to two stocks:  Spectra Energy Corp (SE:NYSE) or Abbott Laboratories (ABT:NYSE).  While I believe both stocks are good sound investments, I could only choose one for the amount of money I have to invest in my IRA account.  Both have great financials and good business models and while Abbott is a pharmaceutical company, they are not facing any major near term patent expiration like many of their rivals.  Spectra is involved in natural gas distribution, but a great deal of their profit comes from their toll-bridge like storage and pipeline operations.  Both carry similar dividend payouts of around 4%.  So it was hard to choose one or the other.

Since I had to make a decision, I finally went with Abbott Labs due to their slightly higher yield and their lower price to earnings ratio.  I also liked the fact that they have a great deal of cash on hand and a payout ratio of 58% compared to SE's 62%, leaving them more room for future dividend increases.  I have put in the order to purchase ABT for my IRA, but decided to buy shares of SE for my regular taxable account.  I'll have to wait until I collect enough dividends to purchase the SE shares, but I think they'll be a great addition to my portfolio in the long run.

I sure miss the good old days, before the "Great Recession", when my problem was having more cash and not being able to find enough good investments. 

Interesting Post On the Commodities Rally

If you're interested in commodities and the current rally in oil and gas prices, you might like to check out this post:

http://briskycapital.blogspot.com/2009/06/commodity-rallyis-it-for-real.html

I recently made some quick cash trading in my shares of British Petroleum. I had intended to hold it long term, but the price skyrocketed soon after I bought in and I decided to take the profit. May buy back in if prices decline latter this summer.

Looks Like a Promising Week

Happy Monday Morning! Stock market futures are up and even with the bankruptcy of GM, it looks to be a promising day for the stock market. It would be nice to start the month off with some good news! Speaking of good news, I've found a new addition for my dividend stock portfolio.

Legacy Reserves LP (LGCY) Based in Midland Texas, their primary business is acquiring and developing oil and natural gas properties in the Permian Basin and Mid-continental United States. Their dividend is currently $2.08 which represents a yield of 16.88% at their recent price of $12.32 per share. With earnings of $5.89 per share, they should be able to maintain the dividend going forward. It would still be a good investment if they cut the dividend 50%.

I currently own shares of Copano Energy LLC (CPNO) and while I don't plan on adding additional shares to my position, I do plan on holding on for the dividend income. I think both companies could benefit from higher natural gas and oil prices later this year. Will see how it goes.

Have a great Monday morning and a great week!