Lanny’s Recent & Accidental Stock Purchase – Citizens & Northern (CZNC)

You read that tile right!  I may have accidentally purchased a dividend stock last week.  Long-story short, on Tuesday, April 10th, a trade went through that relates to my lack of paying attention to my own account set-up strategies.  Not only did the purchase go through, it happened to be on a day that the market was doing well, so it wasn’t even a timely purchase at all, either!  I ended up purchasing $606.00 worth of Citizens & Northern (CZNC) on Tuesday, April 10th.  Let’s see the summary below.

the stock purchase story

It all started last year in 2017.  Sharebuilder/Capital One Investing has, what they call, a “Sharebuilder plan”.  This “plan” allows automatic trades, that are set at Monday by 5:00PM, to have an order go through on Tuesday for lower commission, as well as the ability to purchase partial shares.  In August of 2017, I had the plan set up to automatically buy shares of Citizens & Northern (CZNC), which is a $1.2/$1.3B bank that I have been purchasing shares into (as we all know) throughout the last few years.  The plan that was set up, was to buy shares, whenever I had $606 in my Roth IRA account.  Unless, I turn this plan off, it will buy shares, each and every time that my account has the capital.  I typically keep the account at/near $0, so it’s never a concern.  Well, I funded my Roth IRA and had never turned the plan to “off” last year.  You can guess what happened…  Let’s just say, Bert & I were working out at our office building’s gym and I received an e-mail, followed by a, “What the F* did I just buy?!”, statement from me.  The e-mail I received was a trade confirmation for $606 of CZNC!  Dangit!

The stock purchase – Citizens & Northern (CZNC)

Citizens & Northern (CZNC), is a community-bank based in Pennsylvania.  They increased their dividend earlier this year by $0.01, from $0.26 to $0.27.  This was a 3.84% growth rate and their annual dividend per share is $1.08.  The price point that I purchased them was at $24.25 per share.  Therefore, the yield at time of purchase was 4.45%, which is well over my average yield in the portfolio, at least one positive here!  I estimate annual earnings, based on Q4 and the add back of tax reform, to be at least $1.36, at the low level; which that doesn’t consider that the tax rate will be effectively lower.  This currently equates to a payout ratio of 79%.  Now, my experiences after Q1, I have seen corporate tax rates around the 17%.  Using that, earnings could be $1.50 per share for the year.  Therefore, this calculates to a 16.16 price to earnings ratio and a payout ratio of 72%, which definitely is better.

Therefore, my $606 hard earned dollars, purchased 24.9858 shares at $0.00 commission, due to having a free trade credit.   These 24.9858 shares produced an additional $26.98 in forward dividend income.  I have updated my portfolio page to reflect this purchase.

Proof:

Stock purchase summary and conclusion

Now there’s a fun story.  I now own, amongst all my accounts, almost 361 total shares that produce ~$390 annually or ~$97.50 per quarter.  This will add, now, almost 4 additional shares upon reinvestment per quarter.  How crazy is that?  Though this was due to my lack of paying attention, the purchase ends up not being too bad and in the end – I own the bank for a reason and why not own more shares?  This was purchased in my Roth IRA account, which would be beneficial for two reasons – the higher dividend yield and in-case in the future they are acquired; as that’s the direction of community banking, at this time.

What does everyone think of this purchase?  Find some humor in my accident?  Has this happened to you, before?  Anyone else buying up community banks?  Thank you again for stopping by everyone and talk soon!  – Lanny

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16 thoughts on “Lanny’s Recent & Accidental Stock Purchase – Citizens & Northern (CZNC)

  1. Hahah awesome! If you purchase through Sharebuilder plan and forget to turn off dividend reinvestment, it will automatically reinvest the dividends. I have made this mistake…. Twice…. with the most recent being Friday when I received my dividend from MDT.

    congrats on inching closer to leaving the rat race!

    • Mike –

      Yep – well, actually – I purposefully leave the reinvestment on, only because for my own, “I can’t predict the market” sanity.

      Appreciate it, as always. Every inch matters.

      -Lanny

  2. Lanny,
    I have almost been burned by the Sharebuilder feature a while back, but I also had it go the other way where due to a holiday or something it waited a week and I got in on a position at a slightly crappier cost. Funny thing about Sharebuilder is in spite of that issue, it is still a really easily used platform. It will be interesting to make the switch to E*Trade whenever that happens this year – with the buyout and all of that Capital One arm.
    – Gremlin

    • Gremlin –

      Yes, very, very easy platform. That was the big keeping point with staying for all of these years. VERY sad to see them sell this business, but can understand if the margin just wasn’t there for them. I may/may not stay with E-Trade, an analysis to be written for sure.

      -Lanny

  3. I sold CZNC and NWFL in 2017, making about a 25% gain in less than a year after seeing them recommended on this blog. I definitely appreciate your posts on both companies! I still like them, just cannot hold every stock I like.

  4. Back when that started it was 10.00 a month I was working and doing it every week to build up positions. Some times I’d forget to switch to a new position. But it all works out.
    My first attempt at transferring my account to Merrill edge got rejected
    So try again tomorrow lol

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