Is This Quintessential Fast-Food Giants Days Numbered?

This is my first of many stock analysis and what better candidate to start with than the shareholder friendly fast-food giant - McDonalds. In the following post I will examine the company against my investment criteria. 

Distinct Competitive Advantage (Moat)?

Bigger is better (economies of scale). McDonald's is the world's largest fast-food chain with 35,000 restaurangs that are located in 118 countries, with an extensive distribution network to serve them all. Just like Walmart, McDonalds has a great bargaining power over it's suppliers, since many of them are dependent on McDonalds which in turn means that the company can buy in large quantities at reasonable prices. McDonalds is also one of the market leaders in most of its markets, even though the competitors have been catching up lately. China is the a market where McDonalds has struggled the most to make a significant footprint.

Location, location, location! Since McDonalds was first to market in many countries, the company has been able to secure great locations for it's restaurants. Management puts a great deal of effort into finding the very best locations. McDonalds often times own both the land and property, and if that's not the case they secure long-term leases.

McDonalds is still a strong brand in most countries and has a huge advertising budget that few companies can match.

McDonalds also has a proven franchise model (about 80% of restaurants are franchised restaurants), where the franchisee is responsible for the mayor part of the risk. Franchise restaurants account for big part of McDonalds revenue, which comes from rental fees, franchise fees and percentage of all restaurant sales. 

All these reasons above makes McDonalds stand out from it's competitors with strong cash flow and high margins. Morningstar believes that McDonalds has a wide moat and I can only agree with them. McDonalds gets a pass on this criterion.

A Truly Global business?
The US accounts for 32%, Europe 39% and APMEA (Asia / Pacific, Middle East, Africa) for 23% of the revenues.

Of revenue from Europe the UK, Germany and France account for about 51%. Of the proceeds from APMEA China, Australia and Japan stands out with 56% of the revenues. McDonalds is multinational company in the true sense of the word. McDonalds passes this criterion. 

Strong Owners?
I'd like to se a business that I own to have strong owner behind it with financial muscle. I usually prefer a company that is family owned, since you tend to take better care of things close to home.

The bigest shareholders are: Vanguard Group, State Street Corporation and BlackRock Institutional Trust Company. McDonalds passes this criterion. 

A Business That is Easy to Understand?
McDonalds business is easy to understand and get a grip on. The company aquires restaurants at strategic locations and sells a tested and established concept with a strong brand to franchisees. The concept is further developed (menus, décor, etc.) and franchisees are trained. The McDonalds brand is managed by means of a huge advertising budget and the company receives most of it's revenue from the franchisees.
McDonalds passes this criterion. 

Rising Earnings Per Share (EPS), That Have Grown on Average at Least in Line with the Dividend for 10 Years?
McDonalds passes this criterion since the average increase per year was about 15% over the period. 

Sales growth has also contributed to the growth of VPA and averaging approximately 6% per year over the same period.

McDonalds also has an extensive repurchase program of shares where they spend an average of 3-4 billion dollars each year. The number of shares has fallen by more than 20% during the period 2004-2013 as a result of share repurchases.

The chart below shows how the company's earnings per share (EPS) and profit margins have developed during the period 2004-2013.

The profit margin has grown from about 9.1% in 2003 to almost 20% in 2013! 

McDonalds does get a pass on this criterion. 

A Dividend that has on Average Risen over the Period of 10 Years?
McDonalds has increased its dividend every year since 1976. This is how the dividend has developed over the past 10 years.

The average dividend growth per year has been about 22%. I can't see McDonalds dividend streak coming to an end anytime soon, although the dividend growth has slowed down considerably in recent years. The payout ratio has risen during the period and in 2013 the payout ratio stod at 56,2% and is about 66% right now. McDonalds passes this criterion.

 
A Company with Financial Strength?
McDonald's balance sheet is strong compared to it's peers, although there is some leverage there. The equity ratio (shareholders' equity) is about 43%. The interest coverage ratio is about 15 which means that they can cover their interest costs nearly 15 times. Free cash flow has been stable during the period and has covered the dividend by a margin.

The big real estate portfolio of restaurants also add strenght to the balance sheet in my opinion. McDonalds passes this criterion. 

Risks and Uncertainties That May Affect Future Earnings?
I want to assure myself that political, regulatory, business and other specific risks that may affect a company's future earnings are as few as possible and preferably manageable.

Health trends have and will continue to put pressure on the fast food industry, McDonalds has however adapted by renewing their menus and offered healthier options in the past.

Tough competition primarily in the US, but also abroad, continues to put a damper on McDonald's profitability. Sales have dropt since last year due to lower guest traffic and comperable sales in existing restaurants in the U.S.
The political risk will always be there since brand is tightly asssociated with the U.S. and the american way. Recent shut downs of restaurants in because of alleged sanitary violations Russia attests to this fact.

Regulatory risk is another threat that McDonalds faces. There is a widespread dissatisfaction among restaurant employees in the United States over the low minimum wages, which is ceating bad press for the chain.
The supplier scandal involving expired meat in China has also had an substantial negative impact on profits this year thus far.

Even though McDonalds has hit a rough patch right now I think the company's strong position in the market place, strong cash flow and the it's abilty to over time adapt give it the tools to cope in this enviroment in times ahead. McDonalds passes this criterion. 

Summary and Valuation
McDonalds meets all of my investment criteria. In my eyes, McDonalds is a solid company with competitive advantages as evidenced by the margins. Steadily increasing EPS and dividends have made McDonald's into an attractive stock to own historically. The big question is what the future looks like.

EPS and dividend growth have slowed down considerably lately. EPS for the last four quarters is down 9% compared to last years full year results. A big part of the recent decline in profitability has do to with the stiff competition and bad press that McDonalds has experienced in the U.S as well as a slow down in Europe. Other factors affecting earnings are the recent meat scandal in China and to a lesser extent the closing down of restaurants in Russia.

McDonalds hopes to increase sales in the U.S. segment by creating a more focused menu, since analysts have pointed out the chain's extensive menu as one of the reasons that sales have dropped lately.
To strengthen the results in APMEA (mainly China) McDonalds will focus on rebuilding confidence in the brand and updating the menu options so that it's more adapted to local preferences. The company will also open more restaurants in the region.

McDonalds will have spent a total of 5 billion on dividends and share repurchases at the end of the year. The share repurchases will contribute to VPA growth by between 2.5 - 3%.

The bigest key to speeding up the VPA-growth is to increase the comparable sales and guest the count in existing restaurants within the established markets. The company has conceded that it hasn't done enough in this area and has for this reason developed three specific strategies to increase their relevance for the customer:

• Modernization and improvement of McDonald experience (trademark, restaurants, menus and customer service).
• Shorteing and simplifying the ordering and payment process with new technology such as mobile, web, and payment solutions. McDonalds has for this reason joined Apple Pay.
• Use existing resources more effectively to realize the points above.

McDonalds is, despite the recent problems, one of the most stable and share friendly company you can own in my opinion. What Am I then willing to pay for such a high quality company that I believe Mcdonalds to be?

Valuation
My Price Cap is equivalent to 83,5 dollars. The Price Cap constitutes the price I'm willing to pay at the most for a given stock. The Price Cap is the average value obtained when Fair Price 1 (based on dividend growth and dividend yield) and Fair Price 2 (based on sustainable EPS and Sustainable P/E ratio) are compared. My Price Cap for McDonalds is based on the following assumptions:

• I estimate that McDonalds will have an average dividend growth rate going equivalent to about 8% going forward.
• I estimate sustainable EPS to be roughly 5,5 dollars and sustainable P/E-Ratio, based on the company's qualities to be 18.

This concludes my stock analysis on McDonald's. My plan is to publish several equity research in the coming weeks.

Have a nice day! 

Two Solid Swedish Companies

This is the third post aimed at you readers that don't live in Sweden or in any of the Nordic countries and for whom many of my holdings might be unfamiliar. In this post I will introduce two stocks that I own which are listed on the Swedish stock exchange (Omx Large Cap). You can view what other stocks I own in the left hand side of the main menu.

Castellum
The fifth largest real estate company in terms of total property value in Sweden and one of Swedens most stable dividend companies. Castellum is conservatively financed compared to industry peers.

The company focuses on commercial properties (office, retail, industrial etc.) in the three major urban regions in Sweden. In the beging of the year Castellum's real estate portfolio consisted of 626 properties with a value of approximately 38 billion SEK ( 5,1 billion dollars ). The properties are owned and managed by six wholly owned subsidiaries.

For the real estate portfolio the occupancy rate is currently about 88%. This isn't great, but not that bad either. Thus far this year the income from property management was up 10% compared to same period last year. The unusually low interest rates will continue to boost the companies earning and share price.

This Is How The Dividend Has Developed During The Period 2004-2013

The dividend growth has been on average 7,5% per year during the period. There are two Swedish companies that I know of that has raised dividends for 17 years in a row, one of those is Castellum. In that respect the company might be the closest Sweden has to an dividend aristocrat. Castellums stock is current dividend yield is 3.8%.

Characteristics That I Associate With The Company:

• Strong and profitable real estate portfolio.
• Strong balance sheet compared to peers. 
• Stable earnings and dividends.
• Swedens closest thing to a dividend aristocrat - has raised the dividend 17 years in a row.

Mekonomen 
Mekonomen is the leading automotive spare parts chain in the Nordic region and comprises the three companies: MECA Scandinavia, Mekonomen Nordic and Sørensen og Balchen. Mekonomen has operations in Sweden, Norway, Denmark and Finland. 

At the end of 2013, Mekonomen Group included around 400 stores and 2 300 affiliated workshops operating under our brands.

Two recent acquisitions (MECA and Sørensen og Balchen) has increased revenue but also intrest baring debt as well as lowered the profit margins. The underlying cash flow is, however, still strong. 

I believe that earnings will improve as the new business is integrated, the debt level is normalized and margins improved by synergy effects. One of the strengths of Mekonomen's business model is that the business modell does not require major investments to generate free cash flow.

This is How EPS and Revenue Have Developed During The Period 2004-2013

EPS and revenues has increased almost 300% and 173% respectively over the whole period, even though profitability has fallen in 2012 and 2013 due to the mayor acquisitions that shrunk margins. For the first three quarters this year EPS has however gone up by 4.4%, so the company is heading in the right direction. Management has confirmed that increased cost efficiency remains an important focus for the remainder of 2014 as well as 2015.

This is How The Dividend Has Developed During The Period 2004-2013

The dividend has increased by 500% over the entire period. The dividend has, however, been stationary for the last two years, but I think earnings improve and I believe that the dividend will follow suit.

Characteristics That I Associate With The Company:

• Strong cash flow from operations.
• Largely insensitive to economic cycles because of it's focus on the used car market
• Competitive advantages through scale and being a low cost provider. 
• Stable earnings and dividend history.

This was a brief introduction of two of my Swedish holdings. My plan is to introduce the rest of my Swedish as well as my Nordic stocks in the coming weeks. If you're interested how fairly valued I think these and my other holdings are, take a look at my Watch List in the upper right hand corner of the blog.

Passive Income - Our Key To Freedom

Our Goal
Time is the most precious thing my family has and we want more of it to ourselves. In order to take control of our time we have set the following goal:

Our portfolio generates a passive income in 20 years time, equivalent to about 73 000 dollars per year, which covers our our annual living costs.

Progress
Our passive income has grown at a steady pace so far this year - this is how far we have come on our journey towards achieving our long-term goal:

The diagram above shows that we already have reached and passed the target for 2014, with two months left of the year. Provided that nothing catastrophic happens, it looks like we are in a good place heading into next year.
There is still a long way go though until our passive income reaches awe-inspiring levels. 

Level of Passive Income 

Our passive income, which currently is approximately 2340 dollars on an annual basis, can buy us the following:

• Two monthly rents and parking fees in our current apartment.
• Approximately 24 dining experiences at a good restaurant.
• 317 galons of gas (1300 liters). Gas is almost twice as expensive in Sweden..
• A new sofa for the livingroom.
• A brand new big screen TV.
• A continental bed.
• 8 working days of work with payed leave for me and my wife!

Most of the points above are not things we strive for, but the list still shows that we are moving along in a fairly good pace, and in that sense it creates some additional motivation.

Owning Our Time

As you probably allready guessed by the now, the last point is by far the most significant to us. Why? Because free time is the most precious we have. Time to spend together in the park at summer, time to watch cartoons past bed time, time to play togheter and assemble my sons train set. 

Controlling and owning our time is our definition of true freedom and our goal is to free ourself trough the power dividends.

New Page

I have added a new page in the main menu called "Passive Income", which shows the size of our passive income on a yearly basis as well as how much each company in our stock portfolio contributes to dividend stream.

What can you afford with your passive income? And what maters the most to you?

Recent Buy

The stock market has recovered and then some since the drop in October. Even though fair valued stocks are few and far between, one of my holdings is still attractively priced. I added 28 shares to my position in Deere & Co at the price of 85,50 dollars yesterday.

For those of you that are not familiar with the company, Deere & Company manufactures and sells agricultural, forestry and construction machinery, as well as offers financing through its extensive network of dealers.

Here Is a Number Of Reasons Why I Like The Company

• Long operating and dividend history (been around for 175 years and distributed dividend 77 of these)
• A dividend growth of 16% over the past 10 years on average.
• An EPS growth that has exceeded the dividend growth by a margin over the same period.
• Deere & Co is the market leader in it's home market and in it's main segment.
• Strong Brand. The John Deere brand is strong and tighly associated in peoples minds with agricultural machinery in general, and tractors particular, and has been so for decades.
• Strong customer relations. The company has been around for almost 180 years, and has over that period of time managed to build an impressive network of dealers and customers that can not replicate overnight.
• A large portion of Deere & Company's revenues come from the aftermarket (used machines, spare parts and service) as well as financing activities, which reduce fluctuations in profitability.
• A Payout Ratio below 30%
• Attractive valuation in a market where good value is hard to find.

Valuation

The price I paid is the equivalent to my Price Cap of $85,5 dollars. My Price Cap is based on the following assumptions:

• I estimate that Deere & Co will have an average dividend growth rate equivalent to about 12,5% going forward.
• I deem sustainable EPS to be roughly 6.5 dollars and sustainable P/E-Ratio to be 14.

After the purchase our passive income is approximately 2340 dollars on a annual basis. You can find my latest portfolio allocation in the main menu.

I plan, in a not to distant future, to post a longer analysis about Deere & Company. Until then have ha nice day!

Two Of Swedens Finest Companies, Period

This is the second post aimed at you readers that don't live in Sweden or in any of the Nordic countries and for whom many of my holdings might be unfamiliar. In this post I will introduce two stocks that I own which are listed on the Swedish stock exchange (Omx Large Cap). You can view what other holdings I own in the left hand side of the main menu.

Company 1: Handelsbanken (Ticker: SHB B)
Sweden's most stable and conservative bank founded in 1871. Handelsbanken is one of Sweden's leading banks with 822 branches in 24 countries, and more than 11 500 employees. In the spring of 2013, Bloomberg published its review of the strongest banks in the world. Handelsbanken was at number eleven on that list and the strongest bank in Europe.

Handelsbanken has many fine defensive qualities, which among others the recent banking crisis revealed. Below I have listed some of the qualities that I associate with the bank.

• Natural barriers to entry - not everyone can start a bank and even fewer can reach the volumes that Handelsbanken handles. The higher capital requirements have only made this entry barrier higher.
• Stable and rising dividends over time has increased by a total of 175% over the past 10 years.
• Stable and rising earnings over time. EPS has risen on average 6% per year during the period 2004-2013. 
• The Lock-in effect is generally quite strong among banks - changing bank isn't something do very often. This effect is particular strong with Handelsbanken that has customers who are very loyal to their bank. The results of a survey made by Swedish Quality Index (SKI) for 2013 showed that Handelsbanken had the most satisfied customers in Sweden. Handelsbanken also had top positions in all its home markets, among both private and corporate customers.
• The bank is currently executing well thought-out and systematic expansion abroad (UK and Netherlands), that will contribute to the bank's earnings growth.

This is how the dividend and dividend payout ratio has developed during the period 2004-2013.

Due to last year being so profitable for the bank, the board issued a extra dividend payment, bosting the dividend payout in 2014. The current yield is 4,9% (extra dividend included).

Swedish companies typically distribute dividends once a year in the spring. The board of directors proposes the size of the dividend in connection with the report for the fourth quarter the year before. The size of the dividend that is distributed in the spring is, in other words, based on the previous year's results.

This year the earnings per share are up 10% compared to the same period last year, which does bode well for next years dividend.

Handelsbanken isn't the only profitable bank in the country - the bigest banks in Sweden account for a big part of the total earnings on the Swedish Stock Exchange (Large Cap). This is not a coincident since the Swedish mortgage market is lucrative, where the banks get to barrow money cheap in a market where there is high consumer demand. 

Company 2: Hennes & Mauritz (Ticker: HM B)

The stock that has a place in almost every Swedes stock portfolio. H&M has an impressive history of revenue and earnings growth that has slowed down the last couple of years as the company has matured. 

H&M is probably the stock that's most internationally recognized of my Swedish holdings. The company went from a single women’s wear shop in Västerås, Sweden, to six different brands and 3,339 stores all around the world. Next year H&M is planning to open it's the first stores in India, Peru, South Africa and Taiwan.

The H&M Groups business idea is to make affordable, fashion accessible to people all over the world. This is possible because H&M designs its own products, has no middlemen and buys the product from the market in large volumes.

H&M offers a wide, varied range of fashion for women, men, teenagers and children. The product range also includes shoes, accessories and cosmetics as well as fashion for the home from H&M Home. Added to this are a number of independent fashion brands, each with its own identity: & Other Stories, Cheap Monday, COS, Monki and Weekday.

Besides physical stores H&M is expanding it's online e-commerce presence. Belgium, Bulgaria, Poland, Portugal, Romania, Slovakia, Czech Republic and Hungary are new online markets that the company plans to enter during 2015.

The chart below shows how the company's earnings per share (EPS) and revenue have developed during the period 2004-2013.

EPS growth has been driven by both increased revenues and profitability. EPS have increased on average 8,5% yearly over the period.

This is in turn how the dividend and dividend payout ratio has developed during the period 2004-2013

The average dividend growth rate has been about 10% in the period 2004-2013. The dividend has been at a stalemate the last couple of years, but development thus far this year will surely lead to a dividend hike next year. Sales and profits have increased 17% and 19% respectively he first nine months of 2014.

The average payout ratio during period was about 88%. The current dividend rate is 3,2%. The high payout ratio is due to the fact that H&M can employ about 10% of the profits in it business. There is a limit to how many stores the company can open per year due to infrastructure, personell and distribution.

Characteristics That I Associate With The Company:

• Strong free cash flow from operations.
• Largely insensitive to economic cycles because of it's focus on affordable clothing and home items
• Competitive advantages through scale and being a low cost provider
• Strong balance sheet with a equity ratio of about 70%. 
• Stable earnings and dividend history.

This was a brief introduction of two of my Swedish holdings. My plan is to introduce the rest of my Swedish as well as my Nordic stocks in the coming weeks. If you're interested how fairly valued I think these and my other holdings are, take a look at my Watch List in the upper right hand corner of the blog.

The Process of Defining Our Long-Term Savings Goal

Most of us agree that having goals is critical to our performance in sports and at the workplace, but is having clearly defined goals when we invest as obvious to us?

I'll readily admit that I had no clearly articulated goals connected to my stock investing until just recently. Sure, there has been something that could resemble a long-term vision in the back of my mind of one day being financially independent, but not much more. I had not defined any long-term goals or any milestones for that matter that had to be met in past. Milestones are important because they keep us on course and motivated. Until recently I knew roughly in which direction I should go, but not which road I would take and how long I would need to travel.

What makes for a good goal? From my own work related experience, I know that good goals should follow the SMART Method and be:

S = Specific
M = Measurable
A = Accepted
R = Realistic
T = Timely

The first time I tried applying the method to my investment process was in conjunction to when I started to blogging in the beginning of 2014. It's ironic how one can be preaching about the importance of SMART goals at the workplace, but at the same time not apply this knowledge to something as important as one´s savings. It takes a while for the sinner to wake up, but better late than never ...

I will now use the SMART Method to incrementally describe me and my family's goal-setting process.

S = Specific
A goal should be specific for it to have any effect, the more specific a goal is the easier it is to follow up. If the definition is too vague, it becomes more of a vision than a goal, to become financial independence is more of a vision than a goal. A more specific goal would instead be that we want to have a passive income equivalent to a certain amount to cover our cost of living. With this in mind here is how the first draft of our long-term savings goal was formulated:

"Our portfolio generates a passive income in xx years time equivalent to about xxxxx dollars per year which covers our our annual living costs."

For each year until the long-term goal is met, we will have milestones that are formulated as follows:

Our portfolio generates an annual passive income equivalent x $ during 20XX .

M = Measurable
To follow up if we reach our milestones and ultimately the final goal, we ha to define how large we needed the passive income to be. In order to define how large the passive income needed be, we first had to figure out how big our cost of living was per year.
Today, my family lives a comfortable life with about 4 100 dollars a month which is equal to about 49 000 annually. We also took into account inflation and approximated it to be 2 % per year.  When inflation is taken into account, the amount that we need to achieve approximately 73 000 dollars in passive income annually.

Furthermore my family will on average put aside about 2 000 dollars monthly. When we started our mission in the begging of the year we had a stock portfolio with a market value of about 37 000 dollars and with a " yield of cost" of 4.58% .
Annual fees (brokerage and taxes) related to savings are estimated at 2.5% per year.
Dividends and new savings are invested in stocks with a dividend yield and lowest annual dividend growth, according to the table below.

Based on the preconditions above, I get the following chart:

After the defining the preconditions we had enough information to formulate long-term goal :

Our portfolio generates a passive income in 20 years time equivalent to about 73 000 dollars per year which covers our our annual living costs.

The milestones for each year until the long-term goal is met became the following:
-Our portfolio generates an annual passive income equivalent to 2 000 in 2014.
-Our portfolio generates an annual passive income corresponding to 3 100 in 2015.
-Our portfolio generates an annual passive income corresponding to 4 400 in 2016.
And so on.. (See chart above )

A = Accepted
Since I have a family, there is no way I can achieve this long-term goal on my own. The goal and what it will cost us to get there, must be accepted by my family. To achieve the long-term goal of becoming financially independent within 20 years requires the family to set aside about 2 000 a month for about 20 years. Setting aside the that sum monthly doesn't have a negative impact on our standard of living or ability to travel for the foreseeable future.

R = Realistic
Based on our financial situation, and the dividend growth that is possible through stable and well-managed companies, I find the goal realistic.

T = Timely
Each individual milestone will be met on an annual basis and the long-term goal is to be met in 20 years time, in other words, 2034.

That was a brief run through of our goal setting process. The long-term investment goal can be viewed at any time through the main menu of the blog.

Two of Swedens Most Solid Industrial Companies

For readers that don't live in Sweden or in any of the Nordic countries, many of my holdings might not be familiar. In this post I will introduce two stocks that I own which are listed on the Swedish stock exchange. You can view what other companies I own in the upper left hand corner of the blog.

Company 1: Atlas Copco B (Ticker: ATCO B)
One of the most well-managed industrial companies in Sweden with a solid dividend history. 
Atlas Copco has customers in 182 countries and operations in half of these countries. 

The company develops, manufactures and supplies customers with compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems. 

What makes Atlas Copco particularly interesting, in addition to the company's innovative business climate, is the growing aftermarket which consists of services that company offers to its customers after a particular purchase is completed, such as maintenance, training, spare parts, accessories and leasing equipment. This makes the customer more dependent Atlas Copco throughout the products lifetime, which is several years. This aftermarket represents almost 43% of Atlas Copco's total recenues. This business segment is profitable with high margins.
Atlas Copco is currently slightly suffering from the general downturn i demand in the mining industry. The rest of Atlas Copcos business areas are on the other hand steadily improving.

The graph below shows how earnings per share (EPS) and revenues have developed during the period 2004-2013.

The average EPS growth rate per year has been 23% over the period. Revenues have increased by an average of 8.4% over the same period, but only by 3.5% yearly over the past five years.

This is in turn how the dividend and dividend payout ratio have developed during the period 2004-2013 (see below).

The average dividend growth rate has been about 16% during the period 2004-2013. The average payout ratio during the same period was about 44%. The current dividend yield is 2,77%.

Characteristics that I associate with the company:

• Relatively sensitive to economic cycles because of exposure to the mining sector, that's partially offset by the stable sales to the aftermarkets.
• Stable earnings and dividend history compared to peers in the sektor
• Competitive advantages through local presence, culture of innovation and market dominance.
• Stable free cash flow that has exced the dividend the entire period.

Company 2: Beijer Alma (Ticker: BEIA B)
I became aware of this company when several Swedish bloggers wrote about it in 2012. For those of you not familiar with the company already, Beijer Alma is an international industrial group specializing in component manufacturing and industrial trade. 

The company develops, manufactures and supplies customers with springs, cables and industrial rubber for further processing in the automotive, telecom and industrial segments. Operations are conducted in the following subsidiaries: Lesjöfors, Habia Cable and Beijer Tech.  More than half of the earnings derive from Lesjöfors, a spring supplier mainly to the automotive industry.

Beijer Alma is a well-run family business with with a very strong balance sheet and a business that barely was hit by the financial crisis. 
This is how the companys earnings per share (EPS) have developed during the period 2004-2013.

EPS growth has mainly been driven by increased revenues (organic and acquisitions). EPS increased 130% over the entire period.

The graph below shows how the dividend and dividend payout ratio have developed during the period 2004-2013 (see below).

The average dividend growth rate has been about 9,81% in the period 2004-2013. The average payout ratio during the same period was about 79%. The current dividend rate is 4,26%. 

Characteristics that I associate with the company:

• Strong balance sheet compared to it's peers
• Stable earnings and dividend history
• No clear competitive advantage
• Stable free cash flow that has exced the dividend the entire period.

This was a brief introduction of two of my Swedish holdings. My plan is to introduce the rest of my Swedish as well as my Nordic stocks in the coming weeks. If you're interested how fairly valued I think these and my other holdings are at the moment, take a look at my Watch List in the upper right hand corner of the blog.

My First Blog Post

How do you start a blog in a different language than your own?  As with so many things in life there probably isn't a easy answer, you just have to start somewhere and this is my first step into the english blogosphere. 

Who am I then? I am a dad in my 30s who has investment as a hobby and systems development as a profession. I currently reside in a 2 bedroom apartment together with my wife and little boy in the citycenter of a medium-sized city in Sweden. 

My interest in stocks was awakened in 2006, but it was not until recently that I started saving for the long term. I've learned the hard way that there are no shortcuts. In other words I  have made some unprofitable investments in the past that I think have and will help me become a better investor in the future. 

Today I have an explicit strategy based on investing in well-managed companies that provide stable and recurring dividend that increases over time. 

Since the beginning of the year I have been writing about investment in general and dividend investing in particular in my native language swedish. My Swedish blog has the same titel as this one (but in swedish of course) and can be found here: http://langsiktiginvestering.blogspot.se

What do I want to accomplish with this blog? My main aim is to try to further improve my investment process. I believe that writing down my thoughts and ideas will make me a better investor in the long run. By writing in english I hope to reach a wider audience and get even more feedback and in the process improve my writing.  

I will use the blog to analyze potential investment worthy companies, explain my thoughts and reflections on investing in general and report how my own investments are progressing. In the menu att the top of the page you can find a realtime version of my stock portfolio, as well as my stock watch list. There is also a page about our long-term investment goal and my investment criteria. My ambition is to further down the road add my stock analysis as well as posts about investing in genera and dividend investing in particular.   

You are more than welcome to come along on our journey!