Bert’s Dividend Stock Purchases – October 2019

October has been a very busy month on the dividend stock purchases front for me.  The “Free Stock Trade” wars allowed me to reduce my cost per transaction to $0, which unlocked the ability to purchase stocks in small quantities.   With cash sitting in my brokerage account, I was ready to take advantage of companies that passed the metrics of our Dividend Stock Screener.

At the end of the month, I will update my Dividend Stock portfolio on our website.  So you will be able to see the full impact of the transactions on my overall portfolio and my forward dividend income.   The name of the game is financial freedom, so I am going to be more aggressive putting my capital to work, pushing forward my dividend income, and growing that number as much as possible.

Let’s see the company’s that were purchased and the impact each had on my forward dividend income.  For each of the companies, at the time of the purchase, I ran the companies through our Dividend Stock Screener.  The results of the stock screener are below using the purchase price, average analyst earnings per Yahoo! Finance, and the company’s dividend growth rate per dividendinvestor.com.

AbbVie, Inc. – ABBV

On 10/2/19, I purchased 6 shares of AbbVie, Inc.  In 2018, I  initiated a position in the company.  Despite the fact that I missed the buying opportunity after the announcement of their pending acquisition of Allergan,  I decided to add to my position at the beginning of the month due to the metrics.  ABBV is still trading at a low P/E ratio, with a nice dividend payout ratio, and a strong dividend yield.   The company’s dividend growth picture may change after the acquisition; however, I like the fact that the company’s payout ratio has plenty of room before it approaches 100%.  Further, ABBV’s future cash flow stream increased by adding another “rock star” drug to their portfolio.  Ultimately, helping them move away from their dependency on Humira.

The 6 shares added $25.68 in dividend income to our portfolio.  For this specific purchase, I was able to capture the November dividend before the ex-dividend date.  I’m very excited about this fact.

Canadian Imperial Bank of Commerce – CM

I actually purchased shares of Canadian Imperial twice this month.  The first purchase was on 10/2/19 and the second was on 10/23/19.  Despite the price increase that occured over the 21 days between purchases, CM easily passed our stock screener on both occasions.  Therefore, I made the decision to jump on the opportunity.  Canadian Imperial is one of Canada’s infamous “Six Major Banks.”  Ironically, all of which have similar valuation, dividend growth, and overall dividend metrics.  CM has typically yielded on the higher side of the group.

With 10 additional shares of the company, I was able to add $44.00 in dividend income to my portfolio.  Unfortunately, I just missed out on the ex-dividend date for the October dividend.  So I won’t receive the actual dividend from this purchase until January 2020.   It will be well worth the wait, in my opinion.  After all of the purchasing activity, I now own 37 shares of the bank.  I’ll continue to grow my position as the buying opportunities present themselves.

Delta Airlines, Inc. – DAL (W)

For the longest time, I held out from purchasing shares of Delta.  Lanny, over the years, has built a strong position in the airline.  With each purchase, and each passing day, he would always tease me about not joining him in the ownership column.  I never prioritized adding an airline.  Instead, I focused my attention on other positions and industries instead.

Finally, as I made an aggressive push to put my capital to work, the stars aligned.  After Delta released earnings, their was a drop in the company’s stock price.  The earnings were great.  Although, there were some increased operating costs as well.  Management shrunk their earnings guidance for the year (but didn’t reduce the low end of the range).  I’m not an expert in the airline industry, but the news didn’t seem catastrophic to me.

When the price fell and the company’s dividend yield jumped over 3%, I knew the opportunity to purchase had finally arrived.  I made two seperate purchases and added 25 shares to our portfolio.  Combined, these purchases added $40.30 to our family’s forward income.  Note, this purchase was made in my wife’s individual brokerage account!

United Bancorp, Inc. – UBCP

This is most likely the least known dividend paying stock on the list.  While Canadian Imperial is a large bank, United Bancorp is a much, much smaller community bank.  But there are a ton of community banks that offer a strong dividend yield and dividend growth (4% dividend increase in 2019),  with great financials and metrics.   I won’t go into the details in this article.  But Lanny wrote a great piece on Seeking Alpha that discusses the bank in greater detail.  Follow this link to the article, if you’re interested.

I started a position of 50 shares, which added $27.60 in dividend income to my portfolio.  This will not be the last purchase of the company.  However, their price jumped 8% after my initial purchase.  So I will be adding in the future, that’s for certain.

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3M Company – MMM (W)

3M is one of my favorite companies.  I don’t think that should be a surprise to any of our longtime followers, as I haven’t exactly been quiet about the fact.  It is one of my “Always Buy” stocks due to their diversification and dividend track record.  They are a Dividend King, after all.  The company has been swept up in the trade war and their price has fallen as a result.  Therefore, I have taken the opportunity to build my wife’s position in the company as well.  So now, we are amassing a large combined position in the diversified industrial company.

The purchase was small.  I only added 4 shares to my wife’s portfolio.  In total, this added $23.04 to our forward dividend income.  She now owns 14 shares of MMM, producing $80.64 in annual dividend income.

Archer-Daniels Midland – ADM

Last, but not least, there is Archer-Daniels Midland.  Another company that has been swept up in the trade war drama.  This Dividend Aristocrat has been a value for a while now.  Finally, after getting off my lazy behind, I am getting around to purchasing the company.  I missed the 52-week low by several dollars per share.  But that is okay, since the company still passes the metrics of our stock screener.  The company is a major player in the Ag sector.  While their products aren’t directly seen by consumers; their products impact our daily lives indirectly.  WIth a long-term investing horizon, those are the exact type of companies that I like to own.

I’ve finally added to my position and added 10 shares to my position.  With the company yielding close to 3.5%, this purchase added $14.00 to my annual dividend income total.  Now, my ADM position produces $102.97 in annual dividend income.  I’m pumped that I will be receiving three figures from the company.

Summary

Phew, that was a lot of purchases. And the best part is that the month is not even over yet.  So there will still be opportunities to add if the market presents itself.  If I do add more, I’ll make sure to highlight it in my October dividend income purchase article.

Tallying up the totals of each individual purchase, I have added $174.62 in annual dividend income with each purchase! The cost basis for these purchases were $4,132.12.  Thus, the overall dividend yield for this round of purchases was 4.22%. I was not messing around with this round of capital deployment, that’s for sure.

These purchases combined helped me cross a new investing milestone that I cannot wait to write about.   I’m starting to see the benefit of having no trade fees.  Rather than waiting for large purchases to reduce the impact of the cost per trade, I am able to make several small purchases and increase my income today.   Going forward, I’m going to be much more aggressive with this, that’s for sure!  Let’s just continue to make every dollar count and push our way towards financial freedom.  It is as freaking simple as that!

Have you added to any of these stocks?  If not, what stocks have you purchased in October?  Would you have avoided any of these companies if you were me?  Looking forward to hearing your thoughts and feedback!

Bert

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21 thoughts on “Bert’s Dividend Stock Purchases – October 2019

  1. Bert,
    Welcome to the game, stock hunting with shotguns. The $0 trades moved me directly into the same camp as you. We can make our money go further and faster with better diversification. In a few years, our portfolios will just be personalized index funds (likely with slightly better outcomes).
    – Gremlin

  2. Lots of solid purchases Bert. I haven’t made any real purchases in size thus far this month although I did initiate a new position and have put a decent amount of capital to work with DCA now that $0 commissions is the norm. I still haven’t been able to get myself to add ABBV, but the metrics look pretty damn good. Maybe some further reading would help convince me.

    • Thank you JC. I know you spent a lot of time putting capital to month over the last few months, that’s for sure. There are plenty of great articles about the ABBV and Allergan merger. I would recommend looking into it for sure. If worse comes to worse, at least you will have read some great materials about a great company!

      Bert

  3. I say the same thing every time I read purchase posts… always happy to see them even as the market continues to march to all time highs and threat of recession, QE, war, terror, etc. dominates the headlines. No shortage of quality out there to choose from. Like MMM, CM, ABBV and ADM. Keep stacking!

  4. Great stuff, Doug!! I too bought ABBV in July, then again in August when the priced dropped to $66, So my cost basis is just under $70 on 70 shares. This has been one of my smarter moves of late! Will looking to add more if the price ever takes another tumble. Have been tempted to pick up some ADM but just haven’t pulled the trigger yet! With the zero fees (what a godsend!) I may buy a few shares in my daughter’s fledgling account. Stock dividend hunting has never been more fun!

    • Bob – the zero trade fees have been a blessing and I’m glad the cost to invest has been reduced for so many of us! Nice move picking up ABBV when the price was low. The metrics are looking great now too, as an FYI. So why not look to invest now, rather than waiting for a lower price that may never come?

  5. Great buys, Bert! Though I only own ABBV and MMM, these are all solid companies. Congrats on deploying over $4k and adding $175 in annual forward dividends! At that rate, it won’t be long until FI is achieved.

  6. $4,132.12 at 4.22% is awesome, all great companies you picked up! This has been a busy month here as well for purchases, think it has something to do with those $0 commissions… The more I read about DAL the more I like them, they should end up on my November watchlist.

    Keep it going-
    Divcome

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