Bert’s March Dividend Stock Purchases

What a crazy week this has been for me.  Life comes at you fast sometimes and you have to be willing to absorb some punches and go with the flow.  I couldn’t be happier with how things have shaken out this week and I can’t wait to eventually write about it all.  Finally, with a few hours to concentrate, I wanted to share with you a couple of dividend stock purchases I made in March.  Nothing crazy, but as always, we like to be fully transparent with the community.  Plus, these names have been featured on our watch lists recently.   Let’s check out the stocks that I purchased and added to my portfolio!

Purchase #1-  CVS health Corp (CVS)

CVS has been covered a lot on this website of late.  Lanny has led the charge, performing a CVS vs. Walgreens comparison, reviewing the earnings releases, and adding the company to several of his recent watch lists.  Following Lanny’s lead (after reviewing his rationale and agreeing with his conclusions, of course), I have followed in my pursuit of the company.  After their merger with Aetna, I am very excited about the company’s prospects and merged business plan, despite the pause on dividend increases in the short-term to pay-down debt.   With healthcare costs soaring in the country and an aging population, the new CVS is positioned to become an industry leader thanks to their drug store, and now insurance, presence.  Of course this will require proper execution.  But I am excited about the prospects.

On top of it all, the metrics look great.  Using my purchase price of $58.61/share, a forward EPS of  $6.81/share, and a $2.00 annual dividend per share, the company had the following metrics using our stock screener:

  • P/E Ratio – 8.60
  • Payout Ratio – 29.3%
  • Dividend Yield – 3.41%

My purchase was made on March 1, 2019 and added $1,283.44 to my position’s cost basis.   At the time, I added 22 shares of the company and added $44 of dividend income to my annual dividend income.  I now own 36.132 shares of the healthcare giant, producing $72.62 in dividend annually.

What is crazy is that the company’s stock price continued to fall after my purchase.  With the price tumbling, I decided to add CVS back on my March Watch List.  With a price below $55/share, I may be crazy if I don’t add to my position in the company.  It would be awesome to receive at least $100 in annual dividend income from the company.

Purchase #2- Westrock Company (WRK)

In the middle of the month, after my CVS purchase, I created a watch list for the rest of March.  The watch list had three companies: CVS, Home Depot, and Westrock Company.  This second purchase was a clean and easy purchase off of my watch list and allowed me to continue building a position I started at the end of 2018.

Westrock was appealing for several reasons.  First, the company absolutely crushed the results of our stock screener.  I highlighted this in my watch list, so I’ll keep it brief.  But the company’s P/E ratio was below 9X, their payout ratio was below 50%, and the company has demonstrated their ability to grow their dividend recently.   It was a no-brainer in my opinion for that reason.  Second, I was starting an unrealized loss in the face from my initial purchase and I could potentially add to my position and reduce my cost basis.  This purchase would allow me to increase my stake in a company that I own, thus ,receiving a larger dividend and more shares each quarter, while reducing my average cost per share.

Therefore, On March 22, 2019, I purchased 21 shares of Westrock at a share price of $36.97/share.  This was a total had a cost basis of $780.23, which includes a $3.95 commission.   This purchase added $38.22 to my annual dividend income.  With this purchase, I now own 67.163 shares of the company and will receive $122.24 annually.  Now that I am receiving over $100 annually from the company, I am pretty content with my position.  However, if the price continues to fall, I’ll continue adding.

Summary

What’s exciting is that I was able to add $82.22 in forward dividend income in March based on stock purchases.  Not a lot, but it will definitely help make a difference.   But after my portfolio review earlier in the month, I was excited to see that the purchases of CVS and WRK helped me achieve a few of the action items from this portfolio review.

First, I already had established positions in the companies.  Both of the purchases built upon the smaller positions in my portfolio.   I realized in my portfolio review that I own a lot of companies.  It is refreshing to not have to add another ticker to my tracking spreadsheet to follow each quarter.  Plus, it will be nice to receive a larger dividend from each company and more fractional shares via DRIP.

Second, I mentioned how my portfolio was lacking healthcare stocks.  Adding 22 shares of CVS allows me to increase my healthcare sector allocation.  There is still some work to do as my allocation is only around 5%.  But it is higher than it was a month ago.  Another step closer to further diversifying.  How could I not be happy with that result?

What are your thoughts about my purchases in this hot stock market?  Are you looking at CVS and WRK?  Or are you watching other stocks?  What companies have you bought during the month?

Bert

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17 thoughts on “Bert’s March Dividend Stock Purchases

  1. Hi Bert, Interesting you mention WBA. The stock got pounded after releasing earnings yesterday as I’m sure you already know. Based on my last analysis, the dividend is very well covered even with a reduction to their 2019 guidance, so I’m thinking about adding to my position. I will check out Lanny’s comparison before I do so. Thanks for mentioning it. Tom

    • Tom,

      I did see that WBA took a beating and I have to look more into what exactly happened. Based on review of the ER, it looks like EPS guidance is now expected to remain flat for the period. Further, the company is discussing transforming the stores/restructuring of processes. All in all, it doesn’t sound the best and it seems like they are playing catch up to CVS here. Luckily as you said, both CVS and WBA have a very low payout ratios and can cover down periods like this one. Let me know what you think and if you decide to add to your portfolio!

      Bert

  2. After yesterday’s drop WBA is looking tempting. Like WRJ and CVS but I have enough right now with suspended raises so I’m not looking at that still would like to pick up WRK but also want to bring up other stocks in my portfolio. Nice group of future dividends.

    • Doug,

      Thank you very much! Interesting that WBA is picking up steam. The metrics are looking solid now, but I’ll have to take a deeper look. I wrote a few high level responses in Tom’s comment response. But now I need to look further!

      Bert

  3. Nice pick ups Bert! I am considering CVS or WBA due to their recent drop. We will see what happens over the next week or two. Sometimes it can be hard to decide, lol. Anyway, great buys and thanks for sharing! 🙂

  4. Bert,
    Nice. That is $82 you no longer need to work for! I added to WBA this month and I am long CVS already. I like both stocks, and I think they will do a great service to dividend investors. CVS’ move relating to Aetna I think might change that side of the industry a lot.
    WRK is a nice one I have kept an eye one, but I already have a lot of materials holdings – but it is one I will continue to keep an eye on.
    – Gremlin

    • Gremlin,

      That’s a great point. $82 extra dollars that I now have earned without having to lift a finger. The role of drugstores will change drastically, and they have to. But I think the moves CVS made with Aetna and the synergies they can achieve by aligning the two companies and incentivizing Aetna customers to use CVS over other pharmacies will be HUGE.

      Bert

  5. CVS has really been making the rounds among our DGI peers as considerations or actual investments. I don’t hold either name but can get behind your consistent buying. Markets are reaching their highs once again but there are still many individual value/high yield names out there.

    • Divhut,

      Yes, yes they are. A lot of people are swooping in and grabbing shares. I agree with your last sentiment. Sure, there aren’t as many names at a discount as compared to December of last year. It just requires some more digging to uncover those gems.

      Bert

  6. I love your buys Bert! I guess that’s because I initiated a position in CVS myself recently. I was able to purchase 21 shares of CVS at $53 one week after your purchase and am happy to have locked in at this price 🙂
    It’s nice to see that you keep building your income stream, so keep it up!
    BI

  7. Hey.

    Greetings from Poland. I’m going here for the first time. huge respect for the website. There is no such thing in Poland 🙂
    my wallet is $ 6,000 but it will change with your help.
    I am at WBA CVS Xom T GIS MO KO. Is my direction good?

  8. Bert, nice buys. I do think that CVS/WBA are intriguing at this price level. I just can’t see the local pharmacy going away although there’ll certainly be pressure on their retail profits.

  9. Congrats on another solid month of capital deployment, Bert! Coincidentally, Jason also featured WRK on his UDGSOW series. Great minds think alike, I guess. Upon reading about WRK here and at DTA, I am really impressed with them. They offer a rare blend of yield and growth.

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