Lanny’s Stock Purchases October 8th through October 31st

The dividend stock purchases machine keeps rolling!  Yes, this is yet another round of dividend stock purchases, covering the last three weeks of activity in October.  I am going to start doing this now, from an article standpoint, as my dividend stock purchases are becoming more frequent, due to certain life events and brokerage changes.  The stock market has continued it’s roller-coaster ride, creating value on dividend stocks I currently or have wanted to own.  Therefore, I made a few stock purchases over this time period and let’s dive in and find out what I bought!

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/almost four months into my six month 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 (through MId-October, so fees after that).  Therefore, this allows smaller stock purchases to be made along the way!  Now let’s see what stock purchases occurred over the last 3 weeks!

Stock Purchase – WestRock Company (WRK)

This was a company I bought in my first round of consistently making routine/frequent purchases.  I purchased them again on 10/3 and 10/4, with the lowest price being $51.20.  The stock price from WestRock Co. (WRK) was $45.20 on 10/9, the date of purchase, representing a $6 drop or 11.7%.  Further, for those that may not know them, they are a multi-national provider of paper and packaging products.  In addition, they boosted that dividend on October 26th, by 5.8%!  Here are the quick-stats through the Dividend Diplomat Stock Screener:

  1. Price to Earnings: At $45.20 share price with a forward earning projection of $4.04, this equated out to a p/e ratio of 11.18.  The ratio is easily in the range that I like to see and shows sign of undervaluation, as the S&P 500 is in the low 20’s.
  2. Dividend Growth: They’ve now been increasing the dividend for 4 years.  The average has been around 7-8%, dating back to their first dividend.  I expect mid to upper-mid single digits, such as 5-8%, going forward.
  3. Dividend Yield: With the $45.20 price point, at a dividend of $1.72 (prior to increase), their yield was at 3.80%, well above the S&P 500 (on average) and just above my dividend yield, overall, on my portfolio.
  4. Payout Ratio: Based on forward earnings of $4.04 and a dividend of $1.72 per year, this equates to a payout ratio of 42%.  This is definitely within the dividend payout ratio range I like to see.

Here is proof of my purchase:

In summary, I purchased 18 additional shares at $45.20, on 10/9 of WestRock Co. (WRK) with a $0 trading fee for a total cost of $813.60.  The 18 shares added $30.96 to my forward dividend income projection.  My position is now at 49 shares and I’m fairly satisfied with where the position is at, but will monitor on any sharp corrections of 5% or more.  In total, WRK produces over $89 (after increase) in forward dividend income.

Iron Mountain (IRM)

Iron Mountain (IRM) remains a consistent name, as I purchased them twice within my Roth IRA, recently.  Please refer back to my original purchase article to learn more about IRM!  I purchased 5 more shares, as the price point dropped from $34.09 (at my last purchase) to $31.87, or over 6.5%.  They are a REIT, as well, which carries high yield with it.  Now, from using our Dividend Diplomat Stock Screener Metrics, these were the quick stats:

  1. Adjusted Funds From Operations Ratio:  Typically we use this ratio for REITs, given how their operations work.  The AFFO is similar to the P/E ratio, though.  Based on the recent quarter’s results, AFFO is expected to be $3.15 per share for the year.  My purchase price was $31.87.  Therefore, the ratio was 10.11, which shows signs of undervaluation.
  2. Dividend Growth: They have increased their dividend for 5 years straight now and just juiced the dividend again by 4.00%.  Their dividend growth rate is approximately 6% over the last 4 increases.  I would be just fine with mid-single digit increases, going forward, on this rate, as you’ll see the yield below.
  3. Dividend Yield: With the $31.87 price point, at a dividend of $2.35 (prior to increase, purchase was before announcement), their yield was at 7.37%, well above the S&P 500 (on average) and well above my dividend yield, overall, on my portfolio.
  4. Payout Ratio: Based on AFFO of $3.15 and a dividend of $2.35 per year, this equates to a payout ratio of 75%.  This is on the higher side, but isn’t abnormal from a REIT.  In fact, I would expect this to be a little higher.  They definitely have room for growth, if they wish!

Here is proof of my investment:

In summary, I purchased 5 more shares on 10/11/2018 of Iron Mountain (IRM) at $31.87 with a $0 trading fee for a total cost of $159.34.  The 5 shares adds $11.75 to my forward dividend income projection.  My IRM position is now at 35 shares producing over $85 in dividends (after dividend increase).  I wouldn’t mind rounding out my position to 50 shares.

Stock Purchase – Delta Airlines (DAL)

It’s been a while since I purchased this “jet setter”!  I was happy to do so, as they also recently increased their dividend approximately 15%.  Let’s run them through the metrics:

  1. Price to Earnings: At $51.70 price with a forward earning projection of $5.53 (from 18 analysts), this equated out to a p/e ratio of approximately 9.35, which is well below the overall market on average.
  2. 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!
  3. Dividend Yield: With the $51.70 price point, at a dividend of $1.40, their yield was at ~2.70%, well above the S&P 500 (on average).
  4. Payout Ratio: Based on forward earnings of $5.53 and a dividend of $1.40 per year, this equates to a payout ratio of 25%.  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 10 more shares on 10/9 of 2018 at $51.70 with a $0 trading fee for a total cost of $517.00.  The 10 additional shares adds $14.00 to my forward dividend income projection.  My position is now at 40 shares pumping a total $56 per year.  I will not hesitate to add more shares here if the price reaches the same range.

Stock Purchase – Illinois Tool Works (ITW)

Ah.. yes, ANOTHER small purchase 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 yet another opportunity to do so.  Here are the quick and skinny stats:

  1. Price to Earnings: At $127.20 with a forward earning projection of $7.60, this equated out to a p/e ratio of 16.74, 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 $127.20 price point, at a dividend of $4.00, their yield was at 3.14%, well above the S&P 500 (on average) and just below my portfolio yield, on average.
  4. Payout Ratio: Based on forward earnings of $7.60 and a dividend of $4.00 per year, this equates to a payout ratio of 52.6%.  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 10/19 of 2018 at $127.20 with a $3.95 trading fee for a total cost of $894.35.  The 7 additional shares adds $28.00 to my forward dividend income projection and in total and my position of ITW is now at 24 shares pumping a total $96 per year.

Stock Purchase – Leggett & Platt (LEG)

Bert was the first one to pick up shares of this dividend aristocrat – Leggett & Platt (LEG), here.  Bert wrote more about what they do and who they are, there.  This dividend aristocrat has gone from $47.86 at the first of the year, all the way to $35.25, my purchase price.  Here are the stats:

  1. Price to Earnings: At $35.25 with a forward earning projection of $2.44, this equated out to a p/e ratio of 14.44, 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 4.82% and 5.79%, respectively.
  3. Dividend Yield: With the $35.25 price point, at a dividend of $1.52, their yield was at 4.31%, well above the S&P 500 (on average) and just below my portfolio yield, on average.
  4. Payout Ratio: Based on forward earnings of $2.44 and a dividend of $1.52 per year, this equates to a payout ratio of 62.30%.  Right at the top of the payout ratio – 60%.

Here is proof of my investment:

In summary, I purchased 22 shares on 10/26 of 2018 at $35.25 with a $3.95 trading fee for a total cost of $779.45.  The 22 additional shares adds $33.44 to my forward dividend income projection.  This is a brand new position and I’d be interested to close this at 50 shares, if possible.

Stock Purchase – International Business Machines (IBM)

IBM, big blue!  They were on my November dividend stock watch list, as their price had nose-dove right into the gutter, that’s for sure.  I haven’t purchased them in years, but after their Red Hat acquisition announcement and the stock price decline, I am back on board.  Further, they have 19 years of dividend increases.  Let’s crunch the numbers:

  1. Price to Earnings: At $115.00 with a forward earning projection of $13.80, this equated out to a p/e ratio of 8.33, which is below the overall market on average.
  2. Dividend Growth: They are almost a dividend aristocrat, at 19+ years.  Their 5 year and 3 year dividend growth rates are 11.35% and 8.59%, respectively.
  3. Dividend Yield: With the $115.00 price point, at a dividend of $6.28, their yield was at 5.46%, well above the S&P 500 (on average) and I personally have never seem that at this glorified yield point!
  4. Payout Ratio: Based on forward earnings of $13.80 and a dividend of $6.28 per year, this equates to a payout ratio of 45.51%.  Right smack in the middle of 40 and 60%.

Here is proof of my investment:

In summary, I purchased 6 shares on 10/31/18 at $115 with a $3.95 trading fee for a total cost of $693.95.  The 6 additional shares adds $37.68 to my forward dividend income projection.  In total, I own over 30 shares of IBM, which produces $190 in dividend income per year.

Stock Purchases Summary & Conclusion

I had 6 moderate stock purchases, but I am always here to put every dollar to work!  I deployed a total of $3,857.70 in capital and added $155.83 in forward dividend income.  This equates to an average yield of 4.04%.  Let’s go and get it everyone!

I know this article was long, so thanks for sticking with me.  I am lucky to have this capital and to have limited cost in trading fees.  The most interesting purchase, out of the bunch, is IBM, as I haven’t purchased them in years, but the value, business activity, etc.., was to difficult to pass up.  Further, I have surpassed $7,000 in forward dividend income on my taxable account and am closing in on $12,000 in forward dividend income overall.  My dividend portfolio has been updated and I am locked in and ready for further opportunities.

What are you seeing out there?  What stocks are you buying?  Anything you would recommend?  Thanks again everyone, and, as always, good luck and happy investing! 

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17 thoughts on “Lanny’s Stock Purchases October 8th through October 31st

    • PiV –

      Thanks for the comment. I think it took much longer to write this article, than to actually make the stock purchases, haha! I love these companies and damn – wish the price would have stayed where it was : )

      -Lanny

  1. You guys call me a monster when I posted my last buys… this is insane. I love it. Let the buying continue in earnest. Like the ITW pick up of course. It’s one of my oldest holdings and IBM I think will have new life with the Red Hat integration. I used to own Red Hat a loooooooong time ago and it was one of my best buys before I went the DGI route. Nice all around.

    • DivHut –

      I wish so bad ITW would come back to where I want it. I am sure Red Hat was a great company to own prior to having the dividend heavens revealed : ) I really think that both companies will benefit working together – the revenue base/customers from Red Hat and IBM’s capital/resources. Should be exciting to see! I really appreciate the stop by DH.

      -Lanny

  2. Wow, a lot of work done throughout October for your portfolio Lanny! You really took advantage of the dip in the market – good for you! I like the companies but don’t own any of them yet.
    BI

  3. There’s so much awesomeness here! You’ve made some really nice purchases, and the one that probably catches my eye the most is LEG. I had contemplated buying it when I was initially building my portfolio, and it has recently been catching my eye again in the event I decide to add a new position.

    Bummer that the run of free trades has come to an end, although maybe you can give your broker a call and see if they can sweeten the deal a little. There’s a lot of competition between brokers so you never know what they might offer.

    You guys are both crushing it, and I love seeing that forward income going over $7k and the $12k overall!

    • DivvyD –

      You know it!! Bert had owned LEG for a bit of time and it was about time to add them to my portfolio – especially at that price point (a price point I’ve begged for them to come back to, AGH!).

      I know, the free trades were bittersweet – they would easily offer me a free trade extension, I do just need to make the call, I have a feeling.

      Busting ass, one day at a time. But heck – you are the one posting some incredible results, you are on a tear!!!!

      -Lanny

  4. Great purchases, Lanny! Allocating almost $4,000 in capital in just a few weeks is incredible and so is adding $156 in forward annual dividends. Keep it up!

  5. Like you I haven’t bought IBM in years Lanny. I have continued to hold waiting for the turn around. This last leg down has been a little trying, although “realizing” my losses for tax purposes looks tempting this time of year. What do you think the market knows that we don’t? Tom

    • Tom –

      I agree, I’ve always held, even when I’ve seen $10, $20, $30+ price drops from my cost basis per share. Red Hat has me looking forward to pumped up revenue and margin. However, maybe the market thinks – old dogs can’t learn new tricks? Hmm…

      -Lanny

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