Dividend Diplomats Recent Buy – Dominion (D)

Are you holding on tight?  This market has been absolutely insane.  Wait, that is an understatement.  This market has been gut wrenching-ly amazing, for those that have capital, that is.  A ton of capital, we do not have, but we each had enough to make a separate purchase into a company that we both have had an eye for.  In fact, Lanny purchased this company just a few weeks ago and couldn’t get enough of it.  As the winter has continued on, we have our heat going and our energy bills are staying consistent, to which Dominion (D), has surely enjoyed that.  We each made a separate purchase in Dominion (D) earlier this week!

Dominion (D) stock purchase

Dominion was on Lanny’s watch list that was released over last weekend.  There were three great companies on that list, but Dominion was taking the cake.  We both made a purchase on March 19th.  Looking back, already, we may have been a day too late, but the price hit metrics that fit criteria.  Our purchase prices were at different price points that we will describe below.  Despite the different price points, we both were determined to make this purchase since Dominion Energy has the consistency of dividend increases, a strong yielding utility, a local provider, as well as has a strong dividend growth rate with a growing customer base.  Dominion was down over 14% year-to-date at the time of our purchase and continued to fall to where they are at now.

Another big reason for the purchase, was to continue to round out the positions in utilities.  They are getting pummeled and the overall concentration in the portfolio was lower than where we both wanted for our respective portfolios.  Another reason was that everyone still uses energy to heat their homes and to light up their rooms.  Therefore, this is an industry that doesn’t contain as much risk from a customer standpoint and Amazon (AMZN) would have a pretty hard time entering this market, right?

From a financial statement perspective, they are going to cross $13B in top-line revenue and more than likely crush over that with their acquisition of Scana.  Further, their customer base will continue to grow through acquisition and they already service millions of customers.  A business model where most individuals have to use their service is never a bad thing either.  Further, their dividend increases are 14+ years and the average 5 year dividend growth rate is 7.75%.  Let’s dive into the individual purchases.

Lanny’s Purchase of Dominion

Of course this was on my recent watch list, with Bert & I monitoring the utility, as if we were waiting for natural gas to go out of style.  You damn right better believe I decided to Just Go For It  and make every dollar count in this situation, and that I did.  I purchased them earlier this month (approximately 27 or so shares) and the stock had dipped 5.17% further than that first purchase.  I typically have a rule that there was a good reason I bought it in the first place and if the fundamentals of the company/business do not change and if the price decreases 5% more, than why not continue to further buy when the stock is on sale?  I purchased 14 shares of Dominion (D), to round out my position to just over 41 shares of the utility company in my dividend portfolio.  Based on a dividend of $3.34 per share – this added $46.76 on a going forward basis and cost me at total of $973, with no commission due to a trade credit, see below.  Price was at $69.50 and Dominion was yielding 4.80% at the time.

Bert’s Purchase of Dominion

Lanny has not been messing around with his Dominion position and has shown that he will continue building his stake as long as the company checks all of the investing boxes.   After making three purchases of Realty Income in January and February, I was finally ready to move on and start looking for other positions to initiate or add to in my portfolio.   Lanny has been talking to me a lot about Dominion over the last month and sold me on the company.   Earlier we had mentioned that we were looking to diversify our utility holdings.  Well, prior to this purchase, I only owned two Ohio-based electric utilities in my portfolio: AEP and FirstEnergy.   FirstEnergy is my electric utility provider, so I figured I might as well support my gas utility provider as well right?  All jokes aside, I thought it would be a great idea to diversify my holdings within the utility industry.

This month, I was not messing around.  It had been well over a month since my last purchase and I was ready to make this purchase count.  Although Dominion was not on my March watch list, I became motivated to purchase the company after several discussions with Lanny and watching their price continue to fall.  And this purchase was made prior to the madness of the market over the last few days.

Once the price fell below $69.75,  I jumped and added 43 shares of Dominion to my portfolio for a cost basis of $2,996.22 (including trade fees).  This added $143.62 in forward dividend income to my portfolio.  Unfortunately, Lanny beat me in our made up competition.  My purchase price was $69.52 per share, which was two cents higher than his.  Darn you Lanny!

Although I missed the ex-dvidend date for the first quarter, I cannot wait to receive my first dividend payment in June.   It has been a while since I have done this, but I actually made this purchase in my wife’s Roth IRA account!  So technically, this was an addition to HER forward dividend income.

Summary

We are pretty sure the community knew a purchase was coming.  The stocks on both of our March watch lists continued to fall this week, with Dominion (D) being the one we pulled the trigger on.  This added quite a bit of dividend income to both of our portfolios that we can’t wait to start collecting on.  We both will start receiving Dominion’s dividend in the second quarter, due to being purchased after the ex-dividend date.

What do you think of the purchase?  Are you sitting on the sidelines until the market shakes itself out?  Or are you deploying capital like crazy?  Do you hate or love this purchase by us?  Please comment below!  Thank you again for stopping by, appreciate the feedback. Talk soon!

-The Dividend Diplomats

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22 thoughts on “Dividend Diplomats Recent Buy – Dominion (D)

  1. I have added to D twice this year, most recently last Friday. I see it has had another price drop and I want to buy more. Only thing stopping me is it’s one of my larger positions. But now a 5% yield and anticipated 8% or so dividend growth the next few years it is tough to resist.

  2. DDudes,
    Good choice. Long D as well, but not as many shares as you. The market is definitely wild right now. People are fearing everything from rhetoric to politics, but it all appears a bit short sighted. Anyways, D has been a good utility, they are my electric company and have been reliable for over 8 years now from my perspective.
    – Gremlin

    • Gremlin –

      You have to get in, when others are running out. This market is on a nice free fall. So many darn stocks on sale, it’s incredible. D was one step and hope to start saving more capital for another purchase.

      -Lanny

  3. Seems like everyone is jumping at this one. I have seen a bunch of the members of the community buy it, myself included. Nice pick up. Lots of value in this market when interest rates are pulling everything down. Can’t go wrong with that nice yield either.

  4. Not too crazy about utilities myself, but really digging Consumer Staples this year. Every day I wake up, I find myself asking “Kimberly Clark, McCormick, or Kraft-Heinz?” Sometimes I just grab a little of all three. The other question on my mind this year is “How can I scrounged up more cash for all these great deals?!”

    • Jack –

      You are right. Even Kraft-Heinz has been dropping back to an almost-value arena. Yep – need more cash for sure! I love PG at their price points, as well. Very exciting times for dividend investors.

      -Lanny

  5. Nice guys. Great buy. Ahhh 2 cents whats that!

    I just added to one of my holdings but have some cash sitting on the sides now. Soo much going on right now. Whats china going to do to respond to the tariffs? Alot can happen im gonna space my buys instead of going on all in at the moment.

  6. I’m on board. I just picked up D and SO this month. To say the market has been insane is an understatement. We have many, many choices these days and volatility not seen in a looooong time. D, SO, PPL, VTR, WELL, HCP, LTC, GIS, ABBV, GE, MO and I’m sure more I’m leaving out are trading at much, much better prices and yields these days. Happy to see the buying continue among our DGI peers.

    • DH –

      I couldn’t agree more. Heck, look at ALL of those names you just mentioned. Time to see the activity pick up from our community in 2018, esp. compared to 2017. Going to be a busy one.

      -Lanny

  7. Good job on just going for it you guys. Seems like you made a great buy and it’s always good when you can pick up a stock at a good price. I’ll be getting back enough in my tax return to contribute a little bit to my portfolio. I haven’t decided if I’m going to build up existing positions, such as EMR, which is likely, or invest in new positions. We will see. One of the reasons why I like seeing what’s on your watch list or seeing what stocks others are buying is that sometimes, I get to consider companies that I never previously considered. Anyway, good luck with the purchase and we will see how D treats you in June and beyond.

  8. I like the purchase, guys. D has declined quite a bit in a short period of time, and I don’t think much has changed in their business. Sure, the SCANA purchase is in limbo, but the business seems to be on solid ground. Congrats on another nice addition to your dividend portfolios.
    Bert, I couldn’t tell if you made your purchase before or after Lanny. Next time, just wait until Lanny commits, get his purchase price, and then set a limit order for a few pennies less. Oh no…. maybe that’s what Lanny did this time! I love the friendly competition.
    As for me, I’m not sitting on the sidelines these days. I’ve made several purchases during Q1, so I’ll probably have to slow down a bit.

    • ED,

      Regardless of the outcome, I like the consolidated or standalone entity of D. I’m excited about their dividend growth prospects going forward as well. Are you looking to add?

      I actually purchased my shares about 45 minutes after Lanny due to some “user errors” logging into my brokerage account. That’s a story for a different date. But yeah, I agree, it is a game between us of who can get the lower purchase price. Although I have to be careful with your strategy in the event he caught the valley of the stock price and it climbs after reaching the floor!

      Bert

  9. Out of curiosity – which brokerage do you use?

    I am using Robinhood right now and love the free trades, just hate the fact that they don’t have a DRIP. Looking for a new one that does free trades and has a DRIP.

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