2019 has been interesting to say the least. I know the market is up and down every single day and earnings releases are just around the corner, literally. I have been working through year-end reporting with regulatory filings, in addition to compliance filings, with external auditors/regulators barking on my door, therefore – work made the days pitch black in the morning and pitch black at night. The only light being shed are the dividend stock purchases, right? It’s now time to check out my dividend stock purchases over the first two weeks of January!
The stock purchases
It’s the start of the new year and I feel refreshed on the path to add more investments and dividend income through capital contributions, as the main artillery. I am soon to be eligible to contribute to my new employer’s 401(K) plan (will start on 2/1/19, due to 6 month waiting period, which I’ll receive on the 2/8/19 pay). Therefore, I currently have more cash on hand to deploy in the market and it made sense to start juicing up my taxable account. The stock purchases you will read below may not be as significant of a purchase that I typically make (primarily due to building positions, etc.). Lastly, one purchase was actually/already for my Roth contribution of 2019. However, enough of my rant, let’s see what stock purchases I made over the last two weeks!
Stock Purchase – Delta Airlines, Inc. (DAL)
Here we go and I am back at it again! Similarly, I won’t bore you with more details on Delta (DAL), as I have covered them many times in the past (recent analysis article) and had purchased them back in October, when they were trading at $51.70, after they announced a 15% dividend increase. What’s the difference? They dropped 11.9% due to lower than expected outlook on the 4th quarter. Here are the quick-stats on the purchase by using the Dividend Diplomat Stock Screener:
- Price to Earnings: At $45.54 price with a forward earning projection of $6.65 for 2019 (from 21 analysts), this equated out to a p/e ratio of approximately 6.84, which is well below the overall market on average.
- Dividend Growth: They are also young in their dividend streak, as they are on 5 years now, consecutively. Their recent increase was approximately 15% and the double digit was extremely appreciated! See why the impact of the dividend growth rate is real!
- Dividend Yield: With the $45.54 price point, at a dividend of $1.40, their yield was at ~3.07%, well above the S&P 500 (on average).
- Payout Ratio: Based on forward earnings of $6.65 and a dividend of $1.40 per year, this equates to a payout ratio of 21%. A super low payout ratio. They can grow dividends by double digits, no problem, in the near and long term.
Here is proof of my investment:
In summary, I purchased an additional 22 shares on 1/3/19 at $45.54 with a $3.95 trading fee for a total cost of $1,005.79. The 22 additional shares added $30.80 to my forward dividend income projection. In total, now, I own over 62 shares of DAL, which produces $87 in dividend income per year. I believe this position is as full as I’d like them to be.
Stock Purchase – Vanguard High Dividend Yield ETF (VYM)
Now, this isn’t an individual stock but an Exchange Traded Fund (ETF) and is for my retirement or Roth IRA purchase. This isn’t my first time, as I purchased them back on December 4th, or a full month before this. I wanted to make the Roth IRA easier on myself and to avoid trying to time the market, perform deep/thorough analysis on a stock or two and ultimately wanted to reduce the monitoring as well. See deeper reasons why I chose the Vanguard High Dividend Yield (VYM) ETF, here. The fun part is – the ETF price declined by 9.4% since the initial purchase, which also received a subsequent higher year-end dividend payout.
Therefore, when using their trailing 12 month dividend of $2.6492, this equated to a dividend yield of 3.44% at an $77.00 price point. I did just as I thought I would, from reading that first article, where I said I would buy more in 2019 if it dropped. Therefore, if prices hit at/around $75-$77 again, I will more than likely buy again in the future.
Here is proof of the investment purchase below:
In summary, I purchased 20 total shares on 1/3/19 at $77.00 with a $3.95 trading fee for a total cost of $1,543.95. The 20 shares added $52.98 to my forward dividend income projection. In total, the VYM ETF produces over $205 going forward.
Stock Purchases Summary & Conclusion
I deployed a total of $2,549.78 in capital and added $83.78 in forward dividend income. This equates to an average yield of 3.29%. However, this journey is far from over and gosh dammit, I need to lace up my boots and continue to move forward through 2019. I need to be adding at least $175 per month, AGH! Let’s go and get it everyone!
I’ll continue to say this, thus far, through January. Turn that noise off everyone. Stick to the strategy that has worked for you and review to see if there is anything that you need to see out there 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. Lastly, my dividend portfolio has been updated and I am locked in and ready for further opportunities.
What other investments are you seeing out there? What industry has been your preference as of late? Anyone just stock piling capital and/or cash? Thanks again everyone, and, as always, good luck and happy investing!