Lanny’s Dividend Stock Purchase Activity – July 2019

June came and went.  July was hot and heavy.  Truthfully, it wasn’t until the very end of the month where real moves were being made on dividend stocks.  The stock market makes it tough, but no one said this would be easy.  The journey of Financial Freedom is long and takes a lot of grit, capital and patience  One has to know to control those emotions no doubt.  It’s time to read about my dividend stock purchases during the month of July of 2019!

The stock purchases

I was definitely stock piling cash for 4-5 weeks during the end of May through the month of June.  However, they say patience is a virtue, to which I unloaded quite a bit of capital, which you will see below.

The market continues to skyrocket, as discussed in my watch list article (linked below) and it’s becoming even more difficult to find the exact company you want, near a price point where the value is.

However, I put money to work, to say the least.  You will see 3 dividend stock purchases below.  Two dividend stocks I currently held in my portfolio already, therefore, I had nice adds to those positions.  There was, though, one new stock purchase that I am excited to share in the blog article.  This dividend investing journey is a long-term play and it’s all about the time in the market, as well as staying consistent with dividend stock purchases on a routine basis.  See my purchases below!

Stock Purchase – Kroger

After going a long month without purchase a stock in June, I decided to go to the store.  This time, the grocery store, with Kroger (KR).  Kroger is a massive grocery chain, based in Cincinnati, Ohio and also recently announced a 14% dividend increase back in June.  I purchased them on July 2nd and had owned them previously, at over 72 shares.  This was to add to my current position.

Here are the quick-stats on the stock purchase by using the Dividend Diplomat Stock Screener:

  1. Price to Earnings: At a $21.20 price with a forward earning projection of $2.17 for 2019 (from 27 analysts), this equated out to a p/e ratio of approximately 9.7, which is well below the overall market on average.
  2. Dividend Growth: They’ve had a fairly steady flow of dividend increases.  They’ve been going strong at least 6+ years.  The last 3 increase have been 14%, 12% and 4.2%.  See why the impact of the dividend growth rate is real!
  3. Dividend Yield: With the $21.20 price point, at a dividend of $0.64, their yield was at 3.01%.  Their yield is well above the S&P 500 (on average).
  4. Payout Ratio: Based on forward earnings of $2.17 and a dividend of $0.64 per year, this equates to a payout ratio of 29%.  KR has plenty of room to keep the yield moving up!

Here is proof of my investment:

In summary, I purchased an additional 61 shares during the month for a total cost of $1,297.03.  The investment firm I use is Ally Invest and since my account is over a threshold, the fees are only $3.95 per trade.  We recommend Ally in our Financial Freedom Product listing, as their savings account is higher than most, as well.  The 61 shares added $39.04 to my forward dividend income projection for KR.  My total position is over 133 shares, producing $85+ per year.

Stock Purchase – Lyondell Basell (LYB)

This is now the 4th time I’ve purchased Lyondell Basell (LYB) and the last time was in May.  I honestly was getting antsy and wanted to make a move on them, again. They were also on my watch list article and I had more room to add to my current position.

Read: Lanny’s August Dividend Stock Watch List

  1. Price to Earnings: At an $83.42 price point with a forward earning projection of $10.44 for 2019 (from 21 analysts), this equated out to a p/e ratio of approximately 8, which is well below the overall market on average.
  2. Dividend Growth: Similarly, fairly young in their dividend growth, at 8+ years.  Their last increase was 5%, but can be anywhere from 5-11%.  I am okay with that, especially with where the yield stands.
  3. Dividend Yield: LYB produces $4.20 per year in dividends.  At price points of $83.42, their dividend yield was at ~5.03%, well above the S&P 500 (on average).
  4. Payout Ratio: Based on forward earnings of $10.44 and a dividend of $4.20 per year, this equates to a payout ratio of 40%.  Another, “sweet-spot” payout ratio.  They can grow dividends going forward, at a consistent rate, no problem.

Here is proof of the investment purchase below:

In summary, I purchased 18 total shares on 7/30/2019 for a total cost of $1,505.59. The 18 shares added $75.60 to my forward dividend income projection.  In total, I have almost 60 shares producing almost $250 in dividends per year!

Stock Purchase – Cummins Inc. (CMI)

Cummins, Inc. (CMI) is a name that not everyone has heard of.  CMI has a current market capitalization of over $25 billion.  In addition, they also have over 10+ years of dividend increases, with the most recent being a flat 15% baby!  They make and design engines, filtration and power generation products, while servicing heavy machinery. Heck, we pay them for servicing coin and cash equipment at our branch locations for where I work.  Cash flow is strong here!

Additionally, and it’s worth to note, this is a new position for me.  See the stats below, through the screener.

  1. Price to Earnings: At $166.25 price point with a forward earning projection of $15.90 for 2019 (from 28 analysts), this equated out to a p/e ratio of approximately 10.46, which is well below the overall market on average.
  2. Dividend Growth: As stated earlier, they have increased their dividend for 10 straight years.  Their last increase was 15%, but can be anywhere from 5-25%.
  3. Dividend Yield: CMI produces $5.244 per year in dividends.  Their dividend yield, at time of purchase, was 3.15%, well above the S&P 500 (on average).
  4. Payout Ratio: Based on forward earnings of $15.90 and a dividend of $5.244 per year, this equates to a payout ratio of 33%.  Another low payout ratio company.  This leaves more room for dividend increases!

Here is proof of the investment purchase below:

In summary, I purchased 6 total shares on 7/30/19 for a total cost of $1,001.45. The 6 shares added $31.46 to my forward dividend income projection.  I wouldn’t mind tripling this position, while averaging down my price points.

Summary & Conclusion

Therefore, I deployed a total of $3,803.99 in capital and added $146.10 in forward dividend income.  The average dividend yield on this round of dividend stock purchases equates to 3.84%.  All were purchased before their recent/up-coming ex-dividend date, so timing wasn’t too shabby.  Similarly, I’d like to add more CMI on a go-forward-basis, up to $3,000 total.

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 can and are able to.  I am locked in and 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.

What other investments are you seeing out there?  What industry has been your preference as of late?  Anyone just stock piling cash?  Thanks again everyone, and, as always, good luck and happy investing!

-Lanny

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22 thoughts on “Lanny’s Dividend Stock Purchase Activity – July 2019

  1. I added some KR after taking a deeper dive into the company and the shares seems pretty dang cheap. It’s not my favorite business as a long term buy and hold, but for a value play I had no problem adding some shares. If it continues to hang out around here I might pick up some more shares.

  2. It was temoting to add to LYB on the big drop but i went in another direction. Kroger is also a good one especially with that nice dividend increase they had. havent added to KR in a bit, but i will again nice stock buys

  3. You made some nice moves Lanny! Nearly $150 in forward dividend gained! Great Job! Don’t think I ever heard of CMI before. But at a quick glance, I think I have a new stock to add to my watchlist. Congrats on the new buys! 🙂

  4. Nice work unloading some of that cash Lanny. Kroger looks like a solid investment, but I also love their Zero Hunger / Zero Waste social impact plan – aiming to reduce hunger in communities and eliminate waste across the company by 2025. Hopefully their continued business success translates into benefits for the community as well as shareholders like yourself 🙂

    Cheers, Frankie

    • Frankie –

      I would love for them to achieve that goal!! I wish we had their grocery store chains where I live, but I am a few hours from one. Looking forward to future increases on the dividend side, that’s for sure.

      -Lanny

    • Seedling –

      What’s crazy is, I wish I could be doing more! I would love to be at a solid $1k per month in dividends, taxable dividends. I am getting very close and then it will be onto the next mission of $2k!

      -Lanny

  5. Congrats on the purchases. $146 in added dividend income is incredible! Coincidentally, I actually just finished writing an article to be published on Seeking Alpha highlighting Kroger. I guess great minds think alike, eh?

  6. Lanny,
    I have to echo your input and that of others above – KR looks to be a darn steal. I like the others as well, especially CMI – I have a lot in the materials space.
    – Gremlin

  7. nice Lanny

    A great list of companies with some great metrics. Lyb is a interesting one these days.

    The us market has dipped quite a bit the last couple days.

    Hopefully this continues before my next purchase. Nice additional forward income you have added.

    keep it up!
    cheers

    • PCI –

      LYB has definitely been in the mix amongst the community lately. Further, I should have waited just a tad, prior to making this purchase! However, I may have to average down, may have no choice!

      I am sure we all will be making moves, when we can, based on this downturn.

      -Lanny

  8. Hot and heavy indeed. Nice to see the buying continue. LYB is one of my picks for August. Looks like it is trading at fair value currently. Nice buys all around.

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