Lanny’s Dividend Stock Purchase Activity – October 2019

On your journey to financial freedom or financial independence, you have to stay hungry out there.  October was busy with my brokerage reducing fees down to $0, joining the zero fee movement, as well as a downturn here and there in the Stock Market.  Time to check out my October activity!

Investing consistently in Dividend Income Stocks allows you to create & build another income source, with Dividends.  This is my primary vehicle on my road to Financial Freedom, which you can see through my Dividend Income and my Dividend Portfolio, continues to build and build.

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’s investment platform (one of our Financial Freedom Products).

See – Dividend Diplomat Stock Screener

See – Financial Freedom Products

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 are meeting our investment and financial independence goals!  Then, you rinse and repeat.

The stock purchases

Quite a few things occurred in October and I don’t want to beat anything to a pulp here.  First, the trade wars caused almost all brokerages to reduce their trading fees to $0.  This includes Ally, Fidelity, E-Trade, Charles Schwab, to name a few.  Therefore, we made quite a few more purchases this month, than normal and even some on a smaller scale.

October also showed signs of weakness, with downward points during the month.  In the chart below you can see the dips that occurred early in the month, as well as into the second week of October.  It’s to no surprise that our bigger purchases came during that time period.

Stock Purchase – 3M Company (MMM)

I initiated a position into 3M (MMM) back in August, so I won’t bore you with the details on this powerhouse Dividend Aristocrat.  Further, for those that haven’t read yet, but 3M has always been one of Bert’s 5 Always Buy Stocks.

See – Bert’s 5 Always Buy Stocks

  1. Price to Earnings: Analysts are expecting $9.28 this year.  At a purchase price of $158.40 and $150.96, respectively, this equates to a price to earnings ratio of 17.06 and 16.28.  Not the lowest p/e ratio, but is still below the S&P 500, on average, which is approximately 21, at this time.
  2. Dividend Growth: 3M is a dividend aristocrat and have actually increased dividend for 61 consecutive years.  Talk about history.  Their 3 year growth rate is 9.30% and most recent increase came in at 5.89%, so much lower than recent history.
  3. Dividend Yield: MMM produces $5.76 per year in dividends.  Their dividend yield, at time of each purchase, was 3.64% and 3.81%, well above the S&P 500 (on average), which hovers around the 1.90-2.00% mark.
  4. Payout Ratio: Based on expected earnings of $9.28 and a dividend of $5.76 per year, this equates to a payout ratio of 62%.  This is right at the ceiling of where I like the payout ratio to be.  However, they’ve gone through all cycles from an economics standpoint and this doesn’t scare me too much.  Still have plenty of room for safety.

Here is proof of the investment purchase below:

I purchased an additional 17 shares during September for a total cost of $2,659.58. The 17 shares added $97.92 to my forward dividend income projection.  In total, I own over 24 shares that produces over $138 going forward!

Stock Purchase – Delta Airlines, Inc. (DAL)

Here we go and I am back at it again!  Similarly, I won’t bore you with more details on Delta (DAL), as I have covered them many times in the past.

  1. Price to Earnings: At the price of $51.66 with a forward earning projection of $6.99 for 2019 (from 17 analysts), this equated out to a p/e ratio of approximately 7.40, which is well below the overall market on average.
  2. Dividend Growth: They are also young in their dividend streak, as they are on 5 years now, consecutively.  Their recent increase was approximately 15% and the double digit was extremely appreciated!  See why the impact of the dividend growth rate is real!
  3. Dividend Yield: With the $51.66 price point, at a dividend of $1.61, their yield was at ~3.11%, well above the S&P 500 (on average).
  4. Payout Ratio: Based on forward earnings of $6.99 and a dividend of $1.61 per year, this equates to a payout ratio of 23%.  A super low payout ratio.  They can grow dividends by double digits, no problem, in the near and long term.

Here is proof of my investment:

In summary, I purchased an additional 15 shares at $51.66 for a total cost of $774.84. The 15 additional shares added $24.15 to my forward dividend income projection.  In total, now, I own almost 79 shares of DAL, which produces $127 in dividend income per year, this is not including my wife’s portfolio.

Mini Stock Purchases (Less than $500)

Now, here’s a new segment.  Since the trading wars have heated up and fees now are $0 to trade, I am going to list out and talk at a significantly high level, those dividend investments made that are < $500.00.  That way, I can still show the results from the month, who I am buying, the impact; but also – not to go into too much detail on smaller purchases.

Therefore, I purchased 2 additional shares in Occidental Petroleum (OXY), to average down my price, and also 5 shares into WestRock Company (WRK), to also average down my price.

In total, I deployed a total amount of $269.40 and added $15.42 to our forward dividend income, equating to an average dividend yield of 5.72%.

My Wife’s Dividend Stock Purchases

Another new segment!  My wife has an account that we also make dividend stock purchases into.  For some reason, we are still running two separate, individual, taxable accounts.  All is good, especially because we use the same platform. In October, we made quite a few dividend stock purchases for my wife’s account:

We made a few purchases before the $0 fee took place.  The companies she purchased that currently were not already in my portfolio were Exxon Mobile (XOM) and Walgreens (WBA) – two dividend aristocrats.  Her portfolio is 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.  You’ll start to see that come October Dividend Income results-time.

In total, $3,372.73 was put into investments, producing $138.20 in Dividend Income going forward.  This is an average dividend yield of 4.10%.

Summary & Conclusion

HOLY CRAP!  Combined, my wife and I deployed a total capital amount of $7,076.55 for October and added $275.69 to our forward dividend income 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.

Were you busy during October?  Strike when the dips happen?  Any dividend stock purchases you were surprised about, based on what you see above?  Please share your thoughts and comments!  Thanks again everyone, and, as always, good luck and happy investing!

-Lanny

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20 thoughts on “Lanny’s Dividend Stock Purchase Activity – October 2019

  1. Great purchases. Seems like I tried to mirror your purchases of 3M. I bought 4 and 5 stocks at 155 and 151 respectively. These plus some others of ET and PRU made me reach 4K in forward annual dividend income.

  2. I missed that 3M dip into the upper $140s and low $150s. Now it’s run away from me some. No worries though because I’m sure it’ll come back at some point. We initiated 2 new positions in October but kept them really small because the valuations aren’t that compelling. But it’s 2 excellent companies that I want to own for the long haul and I know if I own shares I’m more inclined to notice the dips than if I don’t. With $0 commissions we’ve definitely started some more DCA which is nice to consistently make purchases and build up some of the positions.

    • JC –

      Very good, excited for you to keep adding to those new positions, which I’m sure you’ll be averaging downward.

      Yes, the $0 commissions have allowed smaller investors to keep pouring money back into the market. Fairly interesting just typing that out… what a way to keep assets under management strong : )

      -Lanny

    • PC –

      DAL has been a dividend monster as of late and I still see high dividend growth rate in their future. However, I don’t want to be too loaded in an airline stock, our position is fairly solid right now. Thanks for the comment!

      -Lanny

    • CW –

      Thank you, thank you. Definitely try to research, bust my a$$ to save $ and then deploy when it makes sense! The dividend stocks above all hit the right criteria and I was pumped to add to current positions. Thanks again for the stop by!

      -Lanny

    • MDD –

      Thank you, thank you! Was glad to keep rounding out current positions I own, that’s for sure. That was probably the best part, that all companies discussed were previous companies owned. Creating that bigger DRIP snowball!

      -Lanny

    • PCI –

      It was about damn time too! I was verrrry quiet in September. It’s almost as if I’m on a – one month active and one month non-active. All depends on the value I see.

      I would imagine Canada would follow through with $0 in trading fees. What platform do you use?

      -Lanny

  3. Hey Lanny. Well done on contributing such a significant amount to your investments. Even though it’s a split between you and your wife, it’s still impressive. MMM is one of my favorite companies too. I didn’t realize it was part of your always buy stocks. I can’t wait to rebuild my position into MMM.

    • DP –

      Yep, October was the month I wanted to start bringing in what we’re doing with my wife’s account. MMM has been interesting – nice iconic/legacy company that is going through a little bit of change/transition, causing the stock to be lower than usual. For a dividend aristocrat, I’ll take it!

      -Lanny

  4. Hey Lanny,

    Couldn’t agree more about savings rate being a critical factor on the road to financial independence. That said I haven’t come anywhere close to 60%, so great job on what you’re able to achieve.
    I’ve been watching with envy from Canada at the brokerage wars happening in the U.S. I’d love if we could get some of that action up here and I could just average into stocks without worrying about having a reasonable minimum threshold to minimize fees.
    As for DAL, I’ve never looked at it from an investment perspective, but I’ve enjoyed it on many occasions as a consumer. I wound up getting a free upgrade to first class on my last trip for work from Kansas City to Atlanta to Ottawa, so that made for a great experience.

    Take care,
    Ryan

    • GRB –

      I appreciate it, I appreciate it. The savings rate is more of a habit/routine now, honestly. Once you have the expenses down and stay on top of it, it makes it easy. Also – have a wife that is on the same page is HUGE!

      Relating to the fees – it only is a matter of time, it would be something else if they didn’t react to it.

      Delta has been the best experience airline in my tenure of flying, that’s for sure. Love them and hope they don’t deter from their ways.

      -Lanny

  5. Lanny,
    That is some hot sauce right there. $0 commission fees, across the board, changes the game completely. Nothing to stop people from going from a handful of positions to dozens. It completely democratizes the process and makes people who hold a handful of stocks look look a bit goofy on their ‘avoid fees’ decisions…
    Maybe in the future we will get paid to make buys!
    – Gremlin

    • Gremlin –

      Hey – if there can be negative interest rates, I wouldn’t count that out of the question! I am definitely in the pro-$0 commission, that’s for sure.

      However, I wonder where companies may make that up – i.e. minimum account balance fees, etc.. or something around that nature. Consolidation will occur, I am sure.

      -Lanny

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