Lanny’s Stock Purchases – August 13th through September 9th

I have been on quite the buying spree lately and have made 7 investment purchases within a 4 week window that I’m excited to share with everyone.  The stock purchases may be within a company that was already in my dividend portfolio or this could be an entire new position.  The one common trait that they all share is fairly simple – the stock purchases all produce growing dividends and pay on a quarterly basis!

The stock purchases

After I released my new $7,200 in forward taxable dividend income goal article, you should have a great sense why I have so many stock purchases.  I am currently two months into my six months entry period at my new employer, before I am allowed to contribute to their 401(k) plan.  Therefore, I have more cash on hand to deploy in the market and it made sense to start juicing back my taxable account.  The stock purchases you will read below aren’t as significant as I usually do, as another event (switching investment brokerage firms) allows me to have free trading for 90 days.  Therefore, this allows smaller purchases to be made along the way!  Now let’s see what stock purchases occurred over the last 4 weeks!

Stock Purchase – Bed, Bath & Beyond (BBBY)

How many of you feel like this is the 1,000th time I have purchased Bed, Bath & Beyond (BBBY), in the last two months?  I know it feels like that for me.  However, the position I was building wasn’t full yet and their metrics are just phenomenal.  I won’t bore you with many details, except provide a short synopsis on their dividend metrics when using the Dividend Diplomat Stock Screener:

  1. Price to Earnings: At $18.00/$17.85 with a forward earning projection of $2.28, this equated out to a p/e ratio of approximately 8, which is well below the overall market on average.
  2. Dividend Growth: Young in the infancy stages of dividend growth, BBBY has performed 2 raises, consecutively, which does date back to when they initiated a dividend.  Their metrics show they can consistently increase that dividend, though!  The growth rate, on average, has been 13.33%.  See the Impact of the Dividend Growth Rate.
  3. Dividend Yield: With the $18.00/$17.85 price point, at a dividend of $0.64, their yield was at ~3.55%, well above the S&P 500 (on average) and also above my overall portfolio, on average.
  4. Payout Ratio: Based on forward earnings of $2.28 and a dividend of $0.64 per year, this equates to a payout ratio of 28%.  A super low payout ratio.  They can grow dividends by double digits, no problem, in the near-term.  See why the Payout Ratio is an extremely important metric.

Here is proof of my investment:

In summary, I purchased 42 shares on 8/13, 8/21 and 8/30 of 2018 at $18.00 (twice) and $17.85 with a $0 trading fee for a total cost of $753.90.  The 42 additional shares adds $26.88 to my forward dividend income projection.  In total and my position of BBBY is now at 82 shares pumping a total $52.48 per year.

Stock Purchase – Illinois Tool Works (ITW)

Ah.. yes, ANOTHER few/small purchases into the dividend aristocrat of Illinois Tool Works (ITW).  I wanted to continue to average down my price, from the initial purchase date, and I had 2 opportunities to knock down that average price even more.  Here are the quick and skinny stats from  our Dividend Diplomat Stock Screener Metrics:

  1. Price to Earnings: At $136.00/136.50 with a forward earning projection of $7.59, this equated out to a p/e ratio of 18, which is below the overall market on average.
  2. Dividend Growth: They are a dividend aristocrat, pumping dividends for well over 25+ years.  Their 5 year and 3 year dividend growth rates are 15.52% and 17.19%, respectively.  Cannot hate on an aristocrat, with a current yield (below) and that type of growth rate!
  3. Dividend Yield: With the $136.00/136.50 price point, at a dividend of $4.00, their yield was at 2.9%, well above the S&P 500 (on average) and just below my portfolio yield, on average.
  4. Payout Ratio: Based on forward earnings of $7.59 and a dividend of $4.00 per year, this equates to a payout ratio of 52.7%.  A perfect payout ratio – above the 40% and below the 60%, allowing room for future growth.

Here is proof of my investment:

In summary, I purchased 7 shares on 8/13 and 8/22 of 2018 at $136.00 and $136.50 with a $0 trading fee for a total cost of $953.50.  The 7 additional shares adds $28.00 to my forward dividend income projection and in total and my position of ITW is now at 17 shares pumping a total $68.00 per year.

Muncy Bank Financial (MYBF)

I had cash left in my Roth IRA account, from post-transfer of my conversion to my new investment platform, that I wanted to put out to work.  We all know I love community bank stocks – such as Citizens & Northern (CZNC), Norwood Financial (NWFL), etc., that it just made sense to buy another small one in the state of Pennsylvania, to keep up with the trend!  Muncy (MYBF) is a $451M total asset bank, which is in the asset range that I like to buy banks at.  Further, from using our Dividend Diplomat Stock Screener Metrics, these were the quick stats:

  1. Price to Earnings: At $32.80 with a forward earning projection of $3.02, this equated out to a p/e ratio of 10.86.  Muncy’s ratio is below the overall market on average.
  2. Dividend Growth: They have increased their dividend for over 14 years now, a trend that continues below.  Their 5 year and 3 year dividend growth rates are 9.93% and 9.78%, respectively.  I love that history and high single digit growth, no doubt.
  3. Dividend Yield: With the $32.80 price point, at a dividend of $1.32, their yield was at 4.02%, well above the S&P 500 (on average) and above my dividend yield, overall, on my portfolio.
  4. Payout Ratio: Based on forward earnings of $3.02 and a dividend of $1.32 per year, this equates to a payout ratio of 43.7%.  A perfect payout ratio – above the 40% and below the 60%.  They have room to continue to pump that dividend further when they want!

Here is proof of my investment:

In summary, I purchased 30 shares on 8/27/2018 of Muncy Bank (MYBF) at $32.80 with a $0 trading fee for a total cost of $984.  The 30 shares adds $39.60 to my forward dividend income projection and in total and another community bank stock on the ledger!

.ads in wordpressDominion Energy (D)

I had owned 41 shares of Dominion (D) from earlier this year.  On September 4th, I noticed that their ex-dividend date was coming soon, that I wanted to have a round 50 shares (at least) and that the share price was below the first time I acquired them.  Then from using our Dividend Diplomat Stock Screener Metrics, these were the quick stats:

  1. Price to Earnings: At $71.17 with a forward earning projection of $4.11, this equated out to a p/e ratio of 17.30.  A very solid p/e ratio, which is below the overall market on average.
  2. Dividend Growth: They have increased their dividend for over 14 years now.  Their 5 year and 3 year dividend growth rates are 8.14% and 8.84%, respectively.  I love that history and high single digit growth, no doubt.
  3. Dividend Yield: With the $71.17 price point, at a dividend of $3.34, their yield was at 4.69%, well above the S&P 500 (on average) and above my dividend yield, overall, on my portfolio.
  4. Payout Ratio: Based on forward earnings of $4.11 and a dividend of $3.34 per year, this equates to a payout ratio of 81%.  This is on the higher side, but isn’t abnormal from a utility company.  They have higher costs, based on the huge merger this year with SANA, which should open up more free cash and earnings.

Here is proof of my investment:

In summary, I purchased 9 shares on 9/04/2018 of Dominion (D) at $71.17 with a $0 trading fee for a total cost of $640.53.  The 9 shares adds $30.06 to my forward dividend income projection and in total, I know have 50 shares of D producing $167 in dividends per year

Stock Purchases Summary & Conclusion

4 moderate purchases, but here to put it all to work!  I deployed a total capital amount of $3,331.93 and added $124.54 in forward dividend income for an average yield of 3.74%.  Every dollar counts, right?

However, I still won’t be done!  Given my situation, as long as there are opportunities, I’ll be on the path making small scoops of undervalued dividend stocks over the next few months!  I’ll keep everyone in the loop on what stocks I am adding to my dividend portfolio.

What do you think of the stock purchases?  Feel like these stocks are undervalued?  Would you have not bought one of these dividend stocks above?  Thank you for sharing your thoughts everyone and, as always, good luck and happy investing!

-Lanny

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21 thoughts on “Lanny’s Stock Purchases – August 13th through September 9th

  1. Lanny,
    ITW and D are where its at. Nice moves, earn that income! I like the small banks too, but am focused on building out the Canadian Big 5 banks myself in that realm for the time being.
    – Gremlin

    • Gremlin –

      Thank you! I agree, they are dividend horses, here and ITW has such a solid yield for being an aristocrat with an insane growth rate. Nice work on the Canadian banks – they have awesome dividend increase plans : )

      -Lanny

  2. that bank seems mighty interesting! I have no bank stocks (or financials for that matter) so I always enjoy reading about these stocks. I’m going to look into this one!

    I’ve already made my purchase for September (blogpost coming) but maybe next month….

  3. D is the only one I own. Great combination of current yield and future dividend growth. Have looked at ITW many times, but never pulled the trigger. And I’m not much of a shopper, but I like BBB from a consumers perspective. They carry pretty good stuff at reasonable prices. Tom

    • Tom –

      ITW has had their rise in price over the last week or so, mad to see it at almost $145! I knew I should have bought more… haha… a quote that we all say probably too many times. BBB had a price shock a few days ago – I didn’t pick up any more but thought about it.

      -Lanny

  4. You have been busy on a buying spree. You are adding some serious cash with these buys. Have looked at some of these but haven’t pulled the trigger on them. Definitely looking at D would like to buy some someday. Keep it up

  5. Way to work Lanny! Love all that new capital going into investments, and despite not owning of these it is hard to argue with the results. Out of these the one I find most intriguing is Muncy Bank Financial–I too am a fan of the smaller local banks, and use one for our checking account too. It is always nice to be able to boost up that average yield too!

    On your ITW purchase, I’m not sure which number is right as the screen shot shows 7 shares but you mention purchasing 9 shares. Thought I’d mention it so your tracking isn’t off somewhere.

    • DivvyD –

      Pumped you use a local bank for your checking, nice way to give back to your community, no joke. I will have to go in and update then, as you are right, it should be 7 shares. Appreciate the look!!

      -Lanny

  6. Lanny, nice buys! Illinois Tool Works is also one of the stocks on my watchlist. Although it will have to wait a little longer. I’m planning on making Altria and Philip Morris my next buys. Hopefully ITW stays at this level or goes a little lower :).

    I have never heard of BBBY and MYBF before, but it’s always interesting to read about companies I have never heard of. Especially BBBY looks interesting. Reminds me of Williams Sonoma (WSM), which I have a position in.

    SD

    • Stashing D –

      Thanks for the post and I see you love the high yielding PM and MO! I own quite a bit of PM, so sidelined for now. Also – ITW… dang price has popped quite a bit since the purchases.

      WSM is a great stock and BBBY is up for a solid consideration, a decent current ration and solid dividend metrics. Of course – have to understand that it’s retail, though!

      -Lanny

  7. A little bit of a shopping spree I see. I made a small purchase last week too, but it wasn’t exactly a steal. I’ve never looked into the community banks but Muncy looks pretty interesting given the 4% yield, high single digit growth rate and what I really like is that they were able to grow dividends into and through the financial crisis. Out of curiosity what is their P/B since that’s usually a better metric than P/E for companies like banks and other financials.

    Personally, I’m leery of BBBY although their metrics do look good. Also, looks like D has been a popular pick in the DGI world I guess I need to finally get around to checking it out.

    All the best.

    • JC –

      I agree on the P/B ratio. I believe they are around 1.23x book right now, because of the recent up-tick in share price.

      D has been very popular and I am the only one buying BBBY – I understand the retail weariness, but we’ll see, they are shutting down stores and tightening up expenses, something I am a big fan of. Their service for registry, filling/styling a new home with style at a price that most can afford is what they represent, but we’ll see, I could be completely wrong.

      -Lanny

  8. Wow, $124.54 in added income! Keep it up! D is the only stock I own whole shares in out of these 3 stocks, but I do own fractional shares of ITW through my recently opened M1 Finance account.

  9. Busy, busy, bust buying. Always love seeing that. No sense timing the market. just keep buying and building during all market conditions. Like the ITW and D add, surprised to see BBBY. You don’t really come across that name in many DGI portfolios. As you stated, every dollar counts and with these moderate buys they totaled a hefty sum which added a nice forward yield to your holdings. Keep it up.

    • Hut –

      Thanks for the swing by! Not many have been looking at BBBY, you are right. You know – it’s not a terribly large position in my portfolio, but enoughto add a growing income stream. We shall see!!

      -Lanny

  10. Hi Lanny,

    First post of your that I’ve seen and really enjoyed it. Wondering what made you chose those 4 stocks? Have you a watchlist where you rank your favorites then go for those when the time is right? What stocks almost made the cut this time?

    Thanks,
    Sam

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