Dividend Stock Purchase: Lanny’s June 2020 Summary

dividend stock purchase

There’s no  sleep for the investor on the road to financial freedom!  Dividend stock purchase activity was much better in June than May, as the stock market provided better opportunities.  We were able to add triple digit dividend income, increasing our passive income source this past month!

dividend stock purchase and dividend income: Path to financial freedom

Investing consistently in Dividend Income Stocks allows you to create & build another income source.  Dividend Income is our primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio, which continues to build and build.  Further, I have written about every stock purchase and month of dividend income since we started this site, plenty of dividend history for you, the reader!

How do I make dividend stock purchases and screen for dividend stocks?  I usually put the stocks through our Dividend Diplomat Stock Screener and trade on Ally Bank’s investment platform (one of our Financial Freedom Products).

Related: Dividend Diplomat Stock Screener

Watch – Dividend Diplomat Stock Screener – Video Example

Related: Financial Freedom Products

Purchasing dividend stocks takes capital or money.  How do I build the capital to make these stock purchases?  I save anywhere from 60-85% of my take-home pay and strongly believe Financial Freedom does not happen by hitting a home run on an investment.  Nothing matters more than your savings rate on your journey to Financial Freedom, plain and simple.  Therefore, I work my butt off to make sure expenses remain in-check and that my savings rate is meeting our investment and financial independence goals!  Then, you rinse and repeat.

dividend stock purchase activity

My dividend stock portfolio was burnt by dividend cuts and lost over $800+ in forward dividend income.  Therefore, I was ready to get back to basics and acquire more shares in the best quality dividend stocks out there.

Related: Dividend Cuts: Pandemic Impact on Lanny’s Portfolio

Since May was a very dry/less active month, I was ready to make June count.  I was more eager than ever to make moves to financial freedom, adding passive income in the form of dividend income.  Who doesn’t love this income stream?!  I know, there is bias, but the cycle of a dividend stock is a beautiful thing.  However, I digress.  Time to see the dividend stock purchases below.

Pfizer (PFE)

Pfizer, dividend income stock

Pfizer (PFE) is a beast in the pharmaceutical industry.  Yes, I’ll say it – they produce Viagra, which is what everyone knows them for.  However, recently, they are known for something far superior at this time.  That is – Pfizer has been working on a coronavirus vaccine, which (surprisingly) actually hasn’t caused their stock price to change much.

dividend stock purchase, pfizer testing vaccine

Pfizer (PFE) has also been a dividend investor dream over the last 10 years.  See the statistics below from the Dividend Diplomat Stock Screener:

  1. Price to Earnings: 8 analysts are projecting $3.09 in earnings for 2021.  Therefore, at an average dividend stock purchase price of $34.44, that equates to a P/E ratio of approximately 11.14.  This is significantly lower than the S&P 500 Index P/E ratio of 22.73.
  2. Payout Ratio: Pfizer (PFE) pays $1.52 in dividends per year, per share.  PFE’s earnings projection is at $3.09.  Therefore, this equates to a dividend payout ratio of 49%. This dividend payout ratio is in the perfect range we like to see, between 40% and 60%.  Again, this shows that they continue to reinvest earnings into their business to grow those earnings.  However, they also like to send almost 50% of their earnings back to shareholders!
  3. Dividend Growth: Pfizer is going on 10 years of dividend increases! It’s okay that they aren’t quite at the dividend aristocrat status, but you have to start somewhere.  Further, their dividend growth rate is typically in that 6.00% to 7.00%, far outpacing inflation.  In fact, Pfizer’s dividend increase typically is 2x the national inflation rate!  See the lovely chart below, if you don’t believe it.national inflation rate

Related: The Impact of the Dividend Growth Rate

In total, my dividend stock purchase of Pfizer totaled $551.00, acquiring 16 total shares.  This added $24.32 in forward dividend income.  My Pfizer position is at ~144 shares and I would like to reach 150 shares, at the right price and valuations.

Dividend stock Purchase Summary (Plus the ~$500 and Less)

Now that most of us here in the U.S. has the ability to trade, my stock purchases can be smaller than usual.  The brokerages really have paved the way to make it “easier” or at least, less costly, for investors.  Thank you Robinhood, Charles Schwab, E-Trade, you name it!  I easily have saved hundreds of dollars this year alone in trading fees.

Given that, I don’t want to dive into so much detail on smaller purchases.  Therefore, the remaining dividend stock purchases will be reflected in a screen shot below, from the brokerage that I use – Ally Investing.

Here are the screenshots from my June Dividend Stock purchases!

Taxable Account:

Roth IRA: No purchases in the Roth IRA for June.

No new positions were added to my dividend portfolio.  Due to the global pandemic, it’s definitely easier to buy dividend aristocrats, especially those stocks that are set to do very well during this time period.  In the video, showcased below, we talk about insurance and technology being strong industries, with Aflac (AFL) and Cisco (CSCO) showing signs of undervaluation as a dividend stock.

Related: Stocks to Buy in a Post-Pandemic World

In total, I deployed a total amount of $1,574.85 and added $60.36 to our forward dividend income, equating to an average dividend yield of 3.83%.

My Wife’s Dividend Stock Purchase summary

My wife has accounts where we also make dividend stock purchases.  Though we are married, we are still running two separate, individual, taxable accounts.  All is good, especially because we use the same platform, but just haven’t wanted to deal with the administrative tasks of combining.  In actuality, I don’t think it’s even possible to combine on the retirement-based accounts.

During June, we definitely started to add more capital to my wife’s dividend investing account.  The dividend income added from Dividend Aristocrats, including two of our TOP 5 Foundation Dividend Stocks for YOUR Portfolio, are in the mix.

Related: Top 5 Foundation Dividend Stocks for any Portfolio

Taxable Account:

Roth IRA: No retirement stock purchases for the month of June

We continued to add to ConEd (ED) and Johnson and Johnson (JNJ), two massive dividend aristocrats.  Further, the largest, single move we made was Tyson Foods (TSN), as with factories shutting down, this caused a decline in the stock price.  Lastly, Unilever (UL) has remained around the same price for some time, so we continued to beef up that position for the portfolio.

Lastly, we added a few shares to Walgreens (WBA), another dividend aristocrat that showed signs of undervaluation, not to mention the 2.2% dividend increase we received.  My wife’s portfolio is typically full of safe and sound dividend investments and since we’ve been together, her portfolio has been blossoming into an extremely significant part of our family’s finances.

Related: Dividend Aristocrats – Who & What are They

In total, $2,237.04 was put into investments, producing $71.78 in Dividend Income going forward.  This is an average dividend yield of 3.21%.

Summary & Conclusion

June was a significant different story than May.  July has already started with a bang, and the dividend purchases have been aplenty.  Combined, my wife and I invested $3,811.89 for June and added $132.14 to our forward dividend income total (3.47% yield overall)!

I will maintain my main message.  Stick to the strategy that works for you, but review if there is anything that may impact your strategy going forward.  You are in control and the emotion button is hard to turn off.  Persevere and stay consistent, if you are able to.  Time to lock in and stay ready for further opportunities.  This was one step closer to financial freedom and I hope to continue making strides.  Lastly, my dividend portfolio has been updated to reflect all dividend stock purchases above (outside of my wife’s).

I am continually looking at my July Dividend Stock Watch List and always keeping an eye on the stocks on Bert’s list of Expected Dividend increases this month.  It is all about the road to financial freedom and I cannot wait to have that crossover point.  That crossover point where the passive income, from dividends, overcomes the total expenses in a given month.

I know I’ve said it many times, but each and every month, we do make inches towards the financial freedom goal.  We will get there and we are very excited you have joined us on the journey – whether you are on your own, learning from ours and simply are entertained by the articles!

Thank you for stopping by, good luck and happy investing out there!

-Lanny

20 thoughts on “Dividend Stock Purchase: Lanny’s June 2020 Summary

  1. Lanny,

    Nice purchases in the month of June! Question… does the $3,811.89 in total purchases include money from dividends received or is that purely from new money?

  2. Here’s my June recap…. I have rebuilt my cash position to a comfortable position after I went on a stock shopping spree during the plunge that we had this year. As such, now whatever money is left over, it is time to invest heavily. Thankfully I am still employed during the pandemic and saving a lot of money by working from home. From now until the end of the year I will be able to invest pretty aggressively!

    For the month of June I made $6,686.90 of purchases, which included positions in CVX, SO, INTC, SNA, CMCSA, PFE. Just like you, I am projecting my July purchases to also be higher. Let’s continue to Layeth the Smackdown! haha 🙂

    • Stock Rider –

      Exactly. Time to just pummel all of that cash and put it to work. That is a good thing you still have that cash flow coming in from the job.

      HOLY SMOKES, almost $7,000?! So many dividends, wow, wow, wow! You killed it. Yes, we will Continue to Layeth the Smacketh Down on Financial Freedom’s Candy A$$!

      -Lanny

      PS – Love the WWE references

      • To be fair and i’ll revise my posts going forward to reflect the differences, $744 came from dividends earned during the month of June, hence why I asked about the new money earlier. I have DRIP turned off and prefer to control the dividend re-investments on my own, so completely new cash was $5,942.90 out of those stock purchases. I am investing more capital at the moment but still have a long ways to go to reach your portfolio level.

        Also, I guess I got the WWE fever from your YouTube videos 🙂

        • Stockrider –

          Still, almost $6,000 of new capital is insane! If you keep that type of purchasing up, there is NO telling where you will end up – just a heck of a lot higher than my portfolio, that is no doubt in my mind.

          If you SMEEEEEELLLLLLL what the Diplomat… is Cooking…

          -Lanny

  3. Great update! I’m happy to see you’re making some sizable additions to your dividend portfolio. Looking at the recent inflation numbers is quite jarring. We’ve just barely avoided negative inflation this year.

    • Loonie –

      I couldn’t agree more. I’ll be bringing in more cold/hard data (at least we think it is actual data, haha) to compare to why we are investing. This should give investing some perspective ; )

      -Lanny

  4. Congrats on deploying nearly $4k into high quality dividend stocks last month. Slowly but surely our dividend incomes will continue to rise as long as we focus on great businesses.

  5. Thems some good choices! I also got a chunk of PFE last month. 71 shares worth. This month, I’ll try to focus on another to really dive deep into. I’m leaning towards GD at the moment. Keep on keepin on.
    – John

  6. Lanny,
    Very nice, I added some of the same names you did – CSCO and GD – plus I am long several others already. Any preference for sectors as of right now? Seems to be opportunities hiding all over the place – depending on the week of course.
    – Gremlin

  7. Hi Lanny,

    Thanks for sharing your purchases and your insights.

    Quick question, as you mentioned Aflac, how do you foresee the introduction of new insurance companies i.e. Lemonade comparing with more traditional ones?

    Best regards,
    Nikos

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