Becton, Dickinson and Co. (BDX), Union Pacific Corporation (UNP), Genuine Parts Company (GPC): Combating 2014′s Icy Start

The market started off 2014 with losses in its first couple of trading sessions, losing the incredible buoyancy that it showed throughout most of 2013. Weak manufacturing data out of China started the sell-off that spread over to the states. The market’s chill was matched only by the weather itself, as Winter Storm Hercules rampaged across much of the country.

Still, for the real-money Inflation-Protected Income Growth portfolio, the weather and market conditions were no match for consistent execution and a commitment to deliver on promises. Three companies paid their expected dividends over the holiday-shortened and ice-covered week, and the portfolio made good on its promise to buy its newest selection. While the portfolio did drop a bit less than 0.75% in market value since last week’s update, that’s almost an expected level of noise in the system.

Becton, Dickinson and Co. (NYSE:BDX)Promises kept
Last Tuesday, Becton, Dickinson and Co. (NYSE:BDXfinished off 2013 in awesome style, paying its owners, including the iPIG portfolio, a $0.545-per-share dividend. That’s around a 10% increase versus what the medical-devices company paid the previous quarter. That dividend increase showcased Becton, Dickinson and Co. (NYSE:BDX)’s ability to thrive despite the relatively new tax burden levied on medical-device manufacturers like it.

Similarly, railroad giant Union Pacific Corporation (NYSE:UNP) started the New Year by delivering its promised dividend on Thursday, its second at $0.79 per share. That dividend is up almost 14.5% from the $0.69 per share Union Pacific paid around the same time a year ago.

Auto parts titan Genuine Parts Company (NYSE:GPC) also celebrated the New Year by handing its shareholders a dividend on Thursday. Genuine Parts’ $0.5375 per share is the company’s fourth dividend at that level. If the company keeps to its recent pattern, we should know by mid-February if Genuine Parts will be able to keep its string of dividend increases alive.

In addition to the dividends it received, the iPIG portfolio bought shares of lawn care company Scotts Miracle-Gro Co (NYSE:SMG) on Friday, per its selection article last Monday. Scotts Miracle-Gro looked like an attractive pick for the portfolio due to its solid balance sheet, recent trend of increasing its dividend, and reasonable valuation.

In addition, Scotts Miracle-Gro was recently able to refinance its debt at lower rates and relax some restrictive covenants from its credit facility. That improved borrowing profile should help Scotts Miracle-Gro reach its margin improvement goal for 2014, which would help solidify its valuation.

Life and business go on
All told, despite the icy start to 2014, last week’s dividend payments serve as a key reminder that healthy businesses continue to operate as expected, regardless of what the market does to their stocks. In addition, the iPIG portfolio was able to pick up its shares in Scotts Miracle-Gro for less than they traded the day its selection article was published. That shows the upside of the down market that greeted us at the start of 2014; prices are better for those looking to buy.

All told, the table below shows the state of the iPIG portfolio as of the market’s close on Jan. 3, 2014:

Company Name Purchase Date Total Investment (including commissions) Value as of
Jan. 3, 2014
Yield as of
Jan. 3, 2014
United Technologies Corporation (NYSE:UTX) Dec. 10, 2012 $1,464.82 $2,032.20 2.09%
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) Dec. 12, 2012 $1,519.40 $1,515.44 3.19%
The J.M. Smucker Company (NYSE:SJM) Dec. 13, 2012 $1,483.45 $1,725.67 2.29%
Genuine Parts Company (NYSE:GPC) Dec. 21, 2012 $1,476.47 $1,893.36 2.61%
Mine Safety Appliances (NYSE:MSA) Dec. 21, 2012 $1,504.96 $1,846.80 2.34%
Microsoft Corporation (NASDAQ:MSFT) Dec. 26, 2012 $1,499.15 $2,030.05 3.03%
Hasbro, Inc. (NASDAQ:HAS) Dec. 28, 2012 $1,520.60 $2,326.73 2.96%
United Parcel Service, Inc. (NYSE:UPS) Jan. 2, 2013 $1,524.00 $2,061.80 2.41%
Walgreen Company (NYSE:WAG) Jan. 4, 2013 $1,501.80 $2,272.80 2.22%
Texas Instruments Incorporated (NASDAQ:TXN) Jan. 7, 2013 $1,515.70 $2,034.63 2.77%
Union Pacific Corporation (NYSE:UNP) Jan. 22, 2013 $805.42 $1,001.10 1.89%
CSX Corporation (NYSE:CSX) Jan. 22, 2013 $712.50 $966.62 2.11%
McDonald’s Corporation (NYSE:MCD) Jan. 24, 2013 $1,499.64 $1,544.64 3.36%
Becton, Dickinson and Co. (NYSE:BDX) Jan. 31, 2013 $1,518.64 $1,968.66 1.99%
AFLAC Incorporated (NYSE:AFL) Feb. 5, 2013 $1,466.35 $1,786.05 2.24%
Air Products & Chemicals, Inc. (NYSE:APD) Feb. 11, 2013 $1,510.99 $1,890.74 2.55%
Raytheon Company (NYSE:RTN) Feb. 22, 2013 $1,473.91 $2,398.14 2.48%
Emerson Electric Co. (NYSE:EMR) April 3, 2013 $1,548.12 $1,942.36 2.48%
Wells Fargo & Co (NYSE:WFC) May 30, 2013 $1,525.48 $1,677.58 2.65%
Kinder Morgan Inc (NYSE:KMI) June 21, 2013 $1,518.37 $1,510.74 4.56%
Scotts Miracle-Gro Co (NYSE:SMG) Jan. 3, 2014 $1,974.68 $1,978.56 2.83%
Cash $766.91

Data from iPIG portfolio brokerage account, as of Jan. 3, 2014.

The article Combating 2014′s Icy Start originally appeared on Fool.com.

Chuck Saletta owns shares of Aflac, Air Products & Chemicals, Becton Dickinson, CSX, Emerson Electric, Genuine Parts Company, Hasbro, J.M. Smucker, McDonald’s, Microsoft, Mine Safety Appliances, Raytheon Company, Teva Pharmaceutical Industries, Texas Instruments, Union Pacific, United Parcel Service, United Technologies, Walgreen Company, Scotts Miracle-Gro, Kinder Morgan, and Wells Fargo. The Motley Fool recommends Aflac, Becton Dickinson, Emerson Electric, Hasbro, Kinder Morgan, McDonald’s, Mine Safety Appliances, Teva Pharmaceutical Industries, United Parcel Service, and Wells Fargo. The Motley Fool owns shares of CSX, Hasbro, Kinder Morgan, McDonald’s, Microsoft, Raytheon Company, and Wells Fargo.

Copyright © 1995 – 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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