Lanny’s Stock Purchases December 1st Through December 15th

Yes, the financial investment engine of my dividend portfolio continues to receive steady capital on a consistent basis!  The last purchase article saw me deploy $2,500, which was on the lighter side, but let’s just say that these two weeks did not disappoint   They say money never sleeps and these prior 14 days were no different.  It’s now time to find out my dividend stock purchases!

The stock purchases

After I released my, “$7,200 in forward taxable dividend income goal article, you should have a great sense why I have so many stock purchases. Additionally, I recently CRUSHED $12,000 in forward dividend income, as well as my $7,200 goal linked above. Furthermore, I am finally over the five month mark in my six month entry period at my new employer, before I am allowed to contribute to their 401(K) plan. Therefore, I currently have more cash on hand to deploy in the market and it made sense to start juicing up my taxable account. The stock purchases you will read below may not be as significant of a purchase that I typically make (primarily due to building positions, etc.).  In addition, one of the stock purchases below contained a hefty amount of capital in my retirement/Roth IRA account.  This was due to reducing the potential to forget and miscue the investment prior to the 2018 tax filing deadline in April.  However, enough of my rant, let’s see what stock purchases I made over the last two weeks!

Stock Purchase – United Postal Services, Inc. (UPS)

One stock that stood out in my mind during the holidays was the relentless pursuit of having gifts and items delivered from door to door.  This is their busy season, folks.  Therefore, in my research and using our screener, I noticed the dividend metrics of United Postal Services, Inc. (UPS) and excited, as I had always wanted this position in my portfolio at some point. Who is UPS?  UPS is a multinational delivery and supply chain company, based in Georgia, employing well over 430,000 individuals and earning over $5B in annual revenue.  In addition, they are on their way to being a dividend aristocrat, as per my sources, I see they have truly increased dividends for at least 17 years and running.  Not only did I purchase them once on December 4th for my entry price, but I made a second investment in UPS on December 14th, as their stock price continued to slide.  Here are the quick-stats on this first & second purchase through the Dividend Diplomat Stock Screener:

  1. Price to Earnings: My initial price was $108.00 with a forward earning projection of $7.23, this equated out to a p/e ratio of 14.94, which is below the overall market on average. On my second purchase at $97.80, the p/e ratio equates to 13.53, showing the sheer sign of undervaluation.
  2. Dividend Growth: They have a solid streak of 17+ years going for them. Their 5 year and 3 year dividend growth rates are 7.98% and 7.63%, respectively. It cannot show any more consistency than that.  Further, this year’s increase was 9.64%.  See why the impact of the dividend growth rate is real!
  3. Dividend Yield: With the $108 as the initial price point and $97.80 as the second, at a dividend of $3.64, their yield was at 3.37% and 3.72%, well above the S&P 500 (on average) and higher than my dividend portfolio, on average.
  4. Payout Ratio: Based on forward earnings of $7.23 and a dividend of $3.64 per year, this equates to a payout ratio of 50%. Smack dead in the middle of my preferred payout ratio range of 40% to – 60%.

Here is proof of my investment:In summary, I purchased 19 total shares on 12/4 and 12/14 at $108.00 and $97.80 with a $3.95 trading fee for a total cost of $1,957.80. The 19 shares added $69.16 to my forward dividend income projection.

Stock Purchase – Occidental Petroleum (OXY)

Here we go and I am back at it again!  This is now my second purchase into Occidental Petroleum (OXY) and some may wonder why I already made another investment since my first purchase.  Here is my short answer – the stock price dropped 5.3% from that initial price point, due to just turbulence in the market.  Here are the quick-updated-stats on this purchase through our stock screener:

  1. Price to Earnings: At $67.00 with a forward earning projection of $5.26, this equated out to a p/e ratio of 12.74, which is below the overall market on average.
  2. Dividend Growth: They have a solid streak of 16+ years going for them. Their 5 year and 3 year dividend growth rates are 5.17% and 1.78%, respectively. Not incredible, but a long streak, nonetheless, and one I know will continue going forward.
  3. Dividend Yield: With the $67.00 price point, at a dividend of $3.12, their yield was at 4.66%, well above the S&P 500 (on average) and definitely higher than my dividend portfolio, on average.
  4. Payout Ratio: Based on forward earnings of $5.26 and a dividend of $3.12 per year, this equates to a payout ratio of 59%. Right at the top of the payout ratio – 60%.

Here is proof of my investment:

In summary, I purchased an additional 15 shares on 12/06 at $67 with a $3.95 trading fee for a total cost of $1,008.95. The 15 additional shares added $46.80 to my forward dividend income projection.

Stock Purchase – Canadian Imperial (CM)

Canadian Imperial (CM) is one of the big 5 banks in Canada, alongside Royal Bank of Canada (RBC), Bank of Nova Scotia (BNS), Bank of Montreal (BMO) and Toronto Dominion (TD).  Prior to this purchase I had just over 77 shares in my portfolio, but sometimes it’s always nice to add to the position, especially when there are signs of undervaluation and a sweet dividend!  Here are the quick-updated-stats on this purchase through our stock screener:

  1. Price to Earnings: At $80.50 with a forward earning projection of $9.17, this equated out to a p/e ratio of 8.78, which is below the overall market on average.
  2. Dividend Growth: They have a solid streak of 9+ years going for them. Their growth rate is hard to determine, due to currency translation, but I would safely say they are at approximately 6%.
  3. Dividend Yield: With the $80.50 price point, at a dividend of $4.08 (after currency translation to USD), their yield was at 5.07%, well above the S&P 500 (on average) and definitely higher than my dividend portfolio, on average.
  4. Payout Ratio: Based on forward earnings of $9.17 and a dividend of $4.08 per year, this equates to a payout ratio of 44%. A nice sweet spot, as they are above the 40% but below the top portion of the payout ratio at 60%.

Here is proof of my investment:

In summary, I purchased an additional 12 shares on 12/06 at $67 with a $3.95 trading fee for a total cost of $969.95. The 12 additional shares added $48.96 to my forward dividend income projection.

Stock Purchase – Vanguard High Dividend Yield ETF (VYM)

Now, this isn’t an individual stock but an Exchange Traded Fund (ETF) and is for my retirement or Roth IRA purchase.  I wanted to make this easier on myself and to avoid trying to time the market, perform deep/thorough analysis on a stock or two and ultimately wanted to reduce the monitoring as well.  Therefore, since I am a dividend investor, I gave Vanguard a look into and noticed positive trends.  First, their top 10 holdings are sound investments, such as Pfizer (PFE), Exxon Mobile (XOM), Johnson & Johnson (JNJ), to name a few.  The fund is over $100 billion in assets, with a price to earnings at 15 (per Vanguard site), had a projected yield over 3% (roughly where my portfolio is, as a whole) and a low 1.7% turnover rate in their holdings.

Therefore, when using their trailing 12 month dividend of $2.554, this equated to a dividend yield of 3% at an $85.00 price point.  The price has steadily fallen to just about $81 and at the turn of the year – may make an additional investment with capital I have set aside, in order to average cost down and to chomp into my 2019 contribution limit.

Here is proof of the investment purchase below:

In summary, I purchased 57 total shares on 12/4 at $85.00 with a $3.95 trading fee for a total cost of $4,848.95. The 57 shares added $145.58 to my forward dividend income projection.

Stock Purchases Summary & Conclusion

How exhausting was my finger pressing that “buy” button?  Not exhausting enough, as I would love to keep the investments onward!  I deployed a total of $8,785.65 in capital and added $310.50 in forward dividend income. This equates to an average yield of 3.53%. Let’s go and get it everyone!

Are you still continuing to hold onto the bars, with the stock marketing swimming up and plunging downward?  When using the dividend diplomat stock screener, I buy when the metrics make sense and try to tune the noise out.  I know how hard it is, but I know that we can all keep control of what we are doing and we need to continue to stick to our analysis and strategy.  Lastly, my dividend portfolio has been updated and I am locked in and ready for further opportunities.

What other investments are you seeing out there?  Am I the only one to buy UPS and/or continue the investment in Oil/Chemicals?  Think I took an easy way out when buying the ETF?  Thanks again everyone, and, as always, good luck and happy investing!

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20 thoughts on “Lanny’s Stock Purchases December 1st Through December 15th

  1. Lanny, Nice yields adding to that forward div income. UPS being brought down by FDX news makes for a nice entry point. More & more DG are becoming attractive again it just a matter of how much dry power is available to make a buy. I’m have CM & UPS on the watch list and some other companies I’m watching include APD, CMI, ITW, PRU, & R.

    On the REIT front prices are pretty high by I am keeping an eye on Weyerhaeuser (WY) where I have a limit order at $22.75. Timer is the last REIT sector that I do not yet have exposure to.

    Overall like your buys and wish you the best of luck with them.

    K

    • Ken –

      Very nice comment, I’m keeping a close eye on UPS in case I see them drop to the lower to lower-mid $90’s. Also – Have always wanted to own APD and CMI, hmm… thanks for mentioning those names.

      Haven’t seem much on the REIT front, but am eager to see what HCP does for their dividend in 2019, looking for an increase somewhere!!

      -Lanny

  2. Lanny,
    I like UPS, though the one concern I have there is their pension liabilities that are funded via debt. They should be able to cover them, and otherwise are an excellent company. CM is a great move. All 5 big CAN banks are great picks – I’m long all 5 now.
    – Gremlin

  3. Great minds think alike!
    I added to my CM position yesterday in time to get that Next dividend payout.
    OXY, ABBV, GIS, and PFE are all on my buy list. PFE price is a little higher then I like but they are having a solid year and I think their rise can continue from current levels.

    All the best ,
    Diligent Dividend.

  4. Talk about a solid two weeks of buys! Over $300 in annual forward dividends added and almost $9,000 deployed. Are you kidding me?! I don’t fault you for choosing an ETF, especially when the top holdings include PFE, XOM, and JNJ. The stock that’s been on my mind a lot lately has been MO. Using the midpoint of their 2018 earnings guidance of $3.99, the company sports a PE under 13 currently, against a 5 year average of 17.1, according to Morningstar.

    • Kody –

      Thank you, THANK YOU! I appreciate the comment on the ETF, I may do more when I am able to in 2019 for the 2019 year, since the price plunged.

      MO is a hot stock right now, undervalued and are an aristocrat, sounding pretty good!!

      -Lanny

  5. Is there a program you guys use that you type in metrics and it gives you those certain stocks / screens them ?

    Also I won the book you guys gave away some time ago I finally got around to it and will soon then pass it on cheers !

    • Alex –

      THAT IS AWESOME!!!!! SO PUMPED you are here commenting, as the winner of the first book giveaway.

      For the metrics – we use a combination – yahoo.com/finance for analyst expectations in the analysis tab. We use Finviz to do a quick screener, in order to drill down and dividendinvestor.com for dividend history, in a quick snap shot.

      Let us know if you have any questions!

      -Lanny

  6. Bam! Amazing amount of capital put to work and that is quite the boost in forward income! I recently made a number of purchases as part of some reshuffling that I have done and still need to write that up, but it included more of VYM as well.

    Don’t forget to workout the rest of your fingers, as that buy button finger is getting quite the workout lately!

  7. Nice purchases Lanny! I’m also considering UPS. The valuation looks really appealing right now. Too bad I probably won’t be able to add any capital to my account in December. Will have to wait to January. Hopefully the downtrend will continue a little longer :).

    By the way, I also just published my November dividend income summary. Hopefully I’m still in time to make it to the ‘Dividend income from the DGI bloggers’ post? That would be great 🙂

    SD

  8. Hi,

    Apologies for the comment, I couldn’t find an email or contact form on your site.
    I work for a company which specialises in affiliate marketing for Canadian financial institutions.

    Keen to open a dialogue to see if this would be a fit for you guys.

    Cheers,

  9. Thanks for your great blog and sharing with everybody. I’m about to put together a Roth portfolio with $30k to start of 15+ stocks and I’m sorting thru everything right now. The one pick you made that I don’t like is OXY. Their annual div growth is very slow – and oil prices not expected to jump until 2020. I owned OXY for 2 years and finally sold them after not getting much div growth. I’m looking seriously at Enbridge right now – 6.5% yield and 12% annual div growth, 80% payout ratio.

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