Jan 172013
 

I don’t drink coffee so it has never occurred to me before how big this industry is. Apparently after crude oil, coffee is the most sought commodity in the world. People drink over 500 billion cups of it each year. That’s a lot considering there’s only 7 billion people on this planet. Starbucks is a growing company that is expected to make $1.9 billion this year of after tax profit. The company is currently valued at $40.4 billion. Even if they stopped growing forever, anyone who bought the stock today can expect to make a 4.7% return on their investment ($1.9÷$40.4) Not much, but better than nothing! If you did the same calculations for Tim Hortons you would make about 6%.  This year I’m going to invest more in relatively defensive stocks that provide coffee, soft drinks, snacks, and other consumables that people can’t seem to get enough of.

Here’s my watch list for 2013. I plan to start buying some of these names soon.

Canadian Stocks

  • Canadian Utilities Limited (CU) *Electric, gas, and steam company*
  • Emera (EMA) *Another utilities company. This one has a great dividend growth record*
  • TransCanada (TRP) *Pipelines. Very recession proof*
  • Tim Hortons (THI) *Doughnuts and coffee, om nom nom ヽ( ̄д ̄;)ノ*
  • Ritchie Bros. Auctioneers (RBA) *A speculative way to invest in the auction business*
  • Bird Construction (BDT) *In construction and general contracting business. 4.9% dividend yield*
  • Canadian National Railway (CNR) *Railways. A great way to play the agricultural industry. Bill Gates is its largest shareholder owning over 10% of the entire company*
  • Canadian Pacific Railway (CP) *Another railway company. Good CEO. But currently overpriced*

 

US Stocks

  • The Walt Disney Company (DIS) *Steve Jobs’ estate is still making over $100 million a year from Disney’s dividends*
  • Coca-Cola Company (KO) *Buffett’s favorite company, enough said*
  • PepsiCo (PEP) *Very global. Very diversified. Maker of Pepsi, Frito Lay, Doritos, Tropicana, Quaker, and Gatorade. With a growing middle class with more disposable income in developing countries how can you possibly go wrong investing in Pepsi?*
  • Starbucks (SBUX) *Opening 3,000 new stores in the Americas by 2017. China to become 2nd largest market in 2014. This company is growing like a weed. Better get in sooner rather than later.*
  • Kimberly Clark (KMB) *They make the tissue you see in public washrooms everywhere. Very stable business model*
  • Johnson & Johnson (JNJ) *Increased its dividends for at least 25 consecutive years*

I already have shares in McDonald’s which owns the McCafé brand of coffee. Once I also buy Tim Hortons and Starbucks I’ll have part ownership to pretty much the entire quick service coffee business in Canada, haha (⌒▽⌒)and exposure to many other countries too. Canadians bought 1.5 billion cups of coffee last year, making it the nation’s most popular beverage. So every time someone buys a coffee from these lucrative chains a very small amount from that transaction will eventually be paid back to me either in dividends, or stock value 😀

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Random Useless Fact:

getting back into stocks and investing in coffee

source: CBC

 

Sep 212012
 

Forbes recently published their list once again of the richest people in the US. On top of the list this year is Gates with $66B, followed by Buffett with 46B. This is very inspirational to me. I like reading about their stories and how they got to where they are. I don’t expect to be on the list, but it motivates me to at least do my best with what I’m given. The combined wealth of these people totals $1.7 trillion, up from $1.5 trillion last year. It makes me wonder how they can continue to get richer yet at the same time still give away billions of dollar every year to charities.  But it’s not always good news for the rich. Mark Zuckerberg, the young founder and CEO of the Facebook saw his wealth slashed in half after the Facebook IPO. I can’t imagine how I’d feel if half of my hard earned money were to just disappear, ouch! With a net worth of only around $9 billion dollars now, his ranking in the Forbes list dropped from 14th place to 36th. How will he ever get by now? 😛

 

Interesting PF posts and other interesting articles from around the web

 

Fellow Vancouvorite Modest Money explains the important of connecting with your readership

CF from the Outlier Model explains how it is never too late to start something new in life and follow your interests.

Young and Thrifty reviews a local restaurant.

The Passive Income Earner shares his latest dividends progress. One day I wish to catch up to him with my own dividend income.