Lanny’s Recent Purchase – HCP

November is underway folks!  The market has had a blood bath out there and it was time for me to re-up in a position that I already had a stake in.  Let’s just say – it was about time to pump my retirement accounts back up, since I haven’t contributed to that bad boy in months.  Let’s see what purchase transaction I had!

HCP, Inc. (HCP)

The last time I purchased HCP was back in May 2015 and that was my 2nd time purchasing them.  Let’s just say I purchased them for $39.32 per share.  Well Mr. Market had a downturn and I had to scoop up more of this dividend aristocrat where and when I could.  Third time again for this company…. which has been a common trend – such as KMI and Emerson Electric.  But the question is, why did I purchase them?  Let’s do the quick and skinny from the dividend diplomats stock screener:

1.) First – they are a dividend aristocrat, having increased dividends for 25+ years, this is just incredible.  Easy stock to buy when you have this sort of history… which falls into my 2nd point.

2.) Their 5 year dividend growth rate is 4%.  Not amazing and not over my weighted average dividend growth rate for my portfolio, which has decreased down to approximately 5.80% – partly due to larger companies paying smaller than normal dividend increases.  The growth rate is great for this reason, however…

3.) Dividend yield – with an annual dividend amount of $2.26 at a price point of $34.10 that I bought in at on the 6th, equates to 6.62%!  Whoa… this is about 2.5% higher than my overall portfolio.  Combining that with a 4% 5 year year dividend growth rate, we are at a dividend power figure of 10.62%… I can get behind that.

4.) One of the largest health care REITs and they have to pay out 90% of earnings due to the REIT status

5.) 5 year dividend yield average is 5.30% and at 6.62%, this represents 132 basis points higher than the historical average, money and I like this.

It’s interesting.  The healthcare and the interest rate environment continues to change and cause MUCH volatility within the market – especially down to the health care REITs.  I felt confident that with the industry HCP is in, the long-term track record of this company and it’s current dividend metrics compared to the historical figures playing well – it was hard to tell myself not to purchase this stock.  I could have waited and picked it up for a quarter or so less than this during the 2nd half of the afternoon, but I didn’t make a substantial purchase, as you’ll see in my summary below.  I will say this – extremely excited to have added to my position here and to knock out some ROTH IRA contributions – remember my – set it and forget it article?  That’s definitely playing here.

HCP Stock Purchase Summary

I purchased midday on November 6, 2015 20.00 shares at $34.10 per share + commissions of $6.95.  Total cost = $688.95.  Dividend Income added at $2.26 per share per year, 20 X $2.26 = $45.20 added.  Total shares of HCP, Inc. (HCP) owned now stands at ~71 shares in my portfolio, which now produces a forward annual amount of over $160 of dividend income per year.  At the price of approximately $35 per share (random average), that is close to 4.6 new shares added per year, which would add $10+ going forward upon reinvestment at the analyzed price of $35.  Loving this!  Also, if 2016 brings 4% growth to the dividend, $160 would turn into $166 and so forth… without including new dividend reinvested shares throughout the period.  One last piece of icing – my last purchase price at $39.32 per share equated to a 13.26% drop, you know my rule… > 5% since the last time I purchased and it was hard to not buy them.  Love to average down my cost this way, add more yield for less money (one of the reasons why a downturn is good for a dividend investor).   Further this aims me closer to my $6,750 projected dividend income goal by the end of the year, still have a mountain to climb, but this REIT is helping me get there.

All in all, I was happy with this purchase and it had been essentially three weeks since I made a move into the market, as stocking capital during appreciating days in the market isn’t a bad thing.  Just need to find signs of opportunity, especially when an Aristocrat gets a beating and strike when you can/are able to.  What does everyone think of this dividend stock purchase of HCP?  Think this was a good purchase?  Would you buy?  What else are you seeing?  Thank you for coming by and as always – appreciate your input and comments.  Talk soon!


11 thoughts on “Lanny’s Recent Purchase – HCP

  1. Good luck on the HCP buy. Day traders are in my opinion trying to take it down on interest rate hike fears but I don’t think they are coming in December and even if they do .25% is not going to change much.

  2. It looks like you got a great dividend stock on sale. It is hard not to like averaging down on a solid choice like HCP. I’m not presently looking at the sector, but I will add HCP to my list of stocks to watch in health care. Thank you for sharing!

  3. Nice purchase Lanny. I also scooped up HCP for the first time last week with 50 shares at 35.50. Wish I would have waited a few more days!!!

    Oh well can’t time the market, happy we are co owners of this killer dividend aristocrat.

  4. Lanny,

    Nice choice, my friend. I’ve been buying heavily into the healthcare REITs. Just averaged down on HCP and VTR earlier today. Love high-quality merchandise on sale! 🙂


    • Mantra,

      Thank you for coming by – how are you doing? Nice work averaging down – you more than likely got in at a better price than I did… to which price is still very enticing at this moment, may decide to scoop up more here in the near term if it stays at $33.50/below. Thanks again and hope all is well!


  5. Health REITs are the place to be these days. I just published my recent November buy and it was health REITs for me as well with HCN and VTR. Will be interesting to see what, if any Fed action will occur in the coming weeks. In the meantime there’s lots of blood among the REITs as panic selling is giving us better buying opportunities with higher yields.

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