Lanny’s Dividend Stock Purchase Activity – September 2019

On your journey to financial freedom or financial independence, you have to stay hungry out there.  September was slow, but activity at least occurred and one dividend stock purchase was made.  Time to check out my September 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

September was an epic month of stock price increases.  I know I am not the only one struggling during this last month to make a dividend stock purchase.  Luckily, I was able to gear up capital for the month of October.  What’s interesting, the market was only up 1.7-2.00% for the month.  Hmm… what gives?  

Since the stock market rose majority of the month, it was hard to make a stock investment.  However, there’s always at least one move to make, I say. 

This month, I invested my hard earned capital into a company I already own.  I love to add to current positions and love to employ an ~5% rule.  That 5% rule is when a stock drops ~5% since the last purchase price and nothing fundamentally changed, then add to that position.  This was not the case with my stock purchase, described below.  However, it’s always fun to ask the question, “If I liked the company at $X.XX and if nothing fundamentally changed with the company, why would I not buy it at $X.XX?  (That is if the price is lower)”.

Stock Purchase – Leggett & Platt (LEG)

My purchase this month comes almost 10 months in the making.  Leggett & Platt (LEG), the dividend aristocrat, was the solo purchase I made in early September.  LEG is a company that produces, designs and manufactures components used in bedding, chair/couches and even seats within automobiles.  It’s no wonder they are a dividend aristocrat, since these are items in our every-day use.

When using our Dividend Stock Screener, we look at these metrics:
P/E Ratio less than the S&P 500
Payout Ratio less than 60% – See – What is the payout ratio & how do you calculate it?
Dividend Growth – See – Impact of the Dividend Growth Rate

  1. Price to Earnings: Analysts are anticipating an average earnings of $2.45.  My price point of $36.09 wasn’t the cheapest.  However, it rarely is this low.  Therefore, with expected earnings at $2.45, the P/E ratio was 14.73.  This ratio is below the S&P 500 P/E ratio.
  2. Dividend Growth: LEG is a dividend aristocrat baby!  Their last increase was 5.26% and is usually slightly higher, but I am okay with mid to upper single digits here.
  3. Dividend Yield: LEG produces $1.60 per year in dividends.  Their dividend yield, at time of the purchase was 4.43%, well above the S&P 500 (on average) and my portfolio.  Love that.
  4. Payout Ratio: Based on expected earnings of $2.45 and a dividend of $1.60 per year, this equates to a payout ratio of 65%.  Slightly above my 60% requirement, however, the dividend aristocrat status is what stood out to me and forward earnings per share for 2020 look like $2.65, which is at 60%.  I feel OK here.

Here is proof of the investment purchase below:

I purchased an additional 29 shares during September for a total cost of $1,050.24. The 29 shares added $46.40 to my forward dividend income projection.  In total, I own over 72 shares that produces over $115 going forward!

Summary & Conclusion

That’s it folks!  Twas a QUIET month, no doubt.  I deployed a total of $1,050.52 in capital and added $46.40 in forward dividend income.  The average dividend yield on this round of dividend stock purchases equates to 4.43%.  I am hungry and anxious to add more to LEG, if/when I can (at the right price).  October has been busy, though, I can tell you that much!

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.

Did you have a quiet September, so that you can continue to make more moves for the remainder of the year?  Who else is out there making a move in October, given the early declines in the stock market?  Thanks again everyone, and, as always, good luck and happy investing!

-Lanny

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17 thoughts on “Lanny’s Dividend Stock Purchase Activity – September 2019

  1. September was pretty quiet for me although I did start a new position in Lockheed Martin. Now that Fidelity joined the $0 commission club I added 1-3 shares of BDX, DIS, MMM and SJM. Love those $0 commissions. It might make me change my strategy just a bit.

    • JC –

      Congrats with LMT, have owned them for almost 10 years and they’ve been a phenomenal investment, to say the list.

      Love MMM and SJM. Would love to get BDX and DIS at better prices. Nice strategy/stocks on the list!

      -Lanny

  2. Congrats on adding to your LEG position. My September was quite busy as I opened positions in UNH, LMT, and WFC. I also added to my position in ET. I added $67.95 in dividend income during the month, with $67.30 coming as a result of dividend stock purchases.

    • As a correction to my above comment, I somehow mixed up the names of my September purchases with my October purchases. September was heavy on tobacco names for me, adding to PM and MO while initiating a position in BTI. I also added to my ALB and ET positions. Those purchases added $67.30 to my dividend income last month, and I also received $0.65 in dividend increases for the month. I guess the cat is out of the bag on my purchases this month 😂

  3. Nice price point on LEG – anytime an aristocrat gets over 4% yield it’s definitely worth a look. Like this purchase, another boring dividend raiser, right!? Planning to make a couple buys in Oct. Let’s get it!

    Divcome

    • Divcome –

      Thank you. I agree completely. Boring, but yet – they have a piece in almost all seating and bedding, have to love it! We all have to sleep and sadly, we all sit in a car, almost each and every day. I’m with you and will repeat it – LET’S GET IT!

      -Lanny

  4. Nice addition! Great entry point with a reasonable PE value. Mid to high single digit earning growth for the next two years are also looking good. Well done!

    I’ve been quite busy in September: I’ve added Altria (MO) two times and initiated a position in UnitedHealth (UNH).

    Keep up your great work!
    -DivRider

  5. Totally agree Lanny. This is a marathon for sure. And if you happen to knock one out of the park in the process, GREAT! But lets plan on the long haul.
    Love the context on averaging down. It’s as simple as “Hey Dummy, you liked it at $50, now it’s $45 and nothing fundamentally has changed…why aren’t you buying?”

    Congrats on your purchase. My purchase streak ended in September. I was a bit cash poor…but I wasn’t overly intrigued by much. Let’s see what October gives us!

    • Passive Cash –

      Keeping that eye on the prize, you know!

      Exactly, if nothing changed – why not add when a valuable company is on sale : ) Love it!!

      October has been much better for me, September (as you can see above) was fairly dry. All good!

      -Lanny

    • CW –

      I usually try to do the same. With no trading costs now, may see my typically purchase dip slightly, but we’ll see what happens with time. Wish the stock market would stop going UP so much hahaha.

      -Lanny

  6. Lanny,
    Nice, I like LEG a lot and have them in two of my accounts. Speaking of, I saw you had a commission, you will probably get fee free trading soon! Everyone is heading that way, including my brokerage – ETrade.
    Keep killing it.
    – Gremlin

    • Gremlin –

      Yep! Free trading started last week for me at Ally, no more $3.95 per transaction! Excited about that, but also am hoping I keep pace up/stay consistent with my investing. It’s all up to me, right?

      -Lanny

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