Lanny’s Recent Stock Purchase – CAT and HCP

I’m back at it baby!  After almost a one month hiatus from buying a stock outside of my 401k purchases through my employer, I am back on the saddle and made a few moves.  The month of March has opened up great opportunities into the market place and I’m even more excited to purchase more stock in the coming days/weeks.  The market from the last 5 business days of 3/2 – 3/6, has dropped almost 2 % overall and has really opened up great dividend stocks at better prices.  I took advantage of a few this week, let’s take a look.

 The Stock Purchase

During the month of February, Bert and I analyzed our watch list and had great dividend stocks on there.  One of them being Caterpillar (CAT), which at the time of the watch list had traded at $85.13 and I was able to scoop some up for $83.305 or 2.14% discount (which as of me writing this as of Sunday the 8th – Dropped even more to $80.06 or another 4% approximately).  I took one off of Bert’s list – HCP, Inc (HCP) as they fell 2% from the price at the time of February’s watch list.  Let’s say that I was itching for that buy during February and I went for it last week!

Caterpillar Stock Purchase

Caterpillar (CAT) is a $48B industrial/manufacturer of equipment and is a monster player in the industry.  When I analyzed them at the watch list, a few key metrics stuck out to me, to save time and go through screening metrics:

  1. P/E at the time of purchase was 17.42, not too cheap but also less than the S&P as a whole.
  2. Payout ratio is under 60%, as us diplomats like to see – and they’ve grown their dividends 20+ years
  3. The dividend growth rate has been roughly 11% on average over the last few years
  4. Dividend at $2.80 shows a calculation for their yield at date of purchase of 3.36% and even with the recent price drop is now 3.50%, whoa.
  5. Further, with my love for share buy backs, they have purchased around 5% of shares over the last year, which is nice and helps support EPS and dividend growth.

Conclusion on this purchase: Great/strong company, the brand is extremely well known for monster equipment and, though cyclical, more than likely isn’t going anywhere, and bodes well with my John Deere and Scotts Miracle Gro!

HCP Stock Purchase

stock purchase

stock purchase

  1. FFO at the time of purchase was roughly 14, given a $3 and purchase price of $42.06
  2. They recently announced a dividend increase, as Bert stated in his purchase postof approximately 3.7%, which I am hoping isn’t the only one, however, this is a high yielder as… the yield at my time of purchase was 5.37%
  3. The DGR has been a little bit higher than AT&T’s 2%… but that’s okay, they are a high yielder usually it’s attached with a lower growth rate.  Further, this is in my Roth IRA account, so not too focused with that area in terms of having the robust growth rate at this moment.
  4. The payout is over 70%, but with REITs, they pay out more than that ~90% and is considered ordinary income, hence the roth IRA option – no tax on my end.

Conclusion: They are a major player at $19B in market cap, and fits my healthcare REIT position in my Roth IRA as a year ago I purchased 3 REITs in SNH, SBRA and MPW.

OVERALL STOCK PURCHASE SUMMARY

I deployed a total capital amount of $1,758 and added $64.15 to my forward looking dividend income.  I’m trying to keep pace with Bert, as he ripped through 3 new purchases for his portfolio last week, some say – this website and brand are getting to his head, so I have to let him know that I’m trying to keep him in the lane next to me.  Joking Bert, you’re doing awesome and pumping that portfolio up.  I am excited to add that amount as it allows me to reach closer and closer to my goals for 2015.  The overall/average yield of this investment = 3.64% and I am possibly thinking about adding more CAT… due to their downturn trend.  The market is looking promising for us – let’s keep it up and buy when it’s right for each of us.

What do ya’ll think of these purchases?  I know everyone has been pretty busy out there in the market – what are you currently seeing out there this week?  The quarter is almost over – how are your goals looking?  Thanks everyone for stopping by, talk soon!

-Lanny B.

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18 thoughts on “Lanny’s Recent Stock Purchase – CAT and HCP

    • FFF,

      Glad you like them! I love that you bought them both and feel the trend with that coming on big time.

      I hope we can pump everyone up, as I know we are both driving eachother to consistently purchase great div stocks. That’s what its about the pursuit of goals, and each day we are closer.

      -Lanny

  1. I’m a huge fan of CAT. There’s been a ton of construction going on where I live, and every time I drive by, I see a bunch of Deere and Caterpillar equipment. Makes me happy 🙂

    I don’t own any HCP, although it is on my watchlist. Solid buys. Hopefully the market continues to head downward!

    • Seraph,

      Thank you! You definitely have to smile when you see a company you own equity in is performing services for the community, it’s satisfying. I know you’ve been receiving dividends from them too!

      I see you buying up some healthcare entities, though – so congrats! Market is prime and it’s an exciting position to be in, let’s stay after it!

      -Lanny

  2. Lanny,

    I really like both purchases. I purchased CAT last week and HCP back in 2013. The market may be shaking right now, but these should provide dividends for years to come. Keep building your empire!

    MDP

    • MDP,

      Gotta love it. I need more blocks for this empire, similar to you – capital has been scarce in 2015 with my other goals and big wedding filled agenda this year – going to 6 weddings and am in 3 of them – Should I have said no to some of them? haha

      Thanks again MDP, talk soon.

      -Lanny

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