Purchase Summary – 7/8/14

As I said in my June investment report,  I had a couple of purchases up my sleeve for July.  I was getting a little tired of sitting on the sidelines.   So today, I decided to invest $1745 in two stocks that I already own.   Here is my transactions summary for my purchases today.

First Purchase – Kraft (KRFT)

A few days ago, I published my stock analysis for Kraft Foods Group (KRFT) .  I really like the stock; it has a strong brand portfolio, it is discounted compared to the market, and the new management team is committed to paying a solid, growing dividend.  This stock is one that will be a solid core holding to my portfolio for many years to come.  After the analysis, I felt the time was right to deploy some additional capital in the company.  I invested an additional $875 resulting in 14.3156 additional shares.   This will add  $30 in additional annual dividend income.  Did I also mention that the ex-dividend date is 7/9/14 so I can capture this quarter’s dividend?

Second Purchase – Procter & Gamble (PG)

In January I initiated in position in PG and I am now the proud owner of 18.28 shares of the stock.  To date, I am only up $26.14 from my initial purchase and $22.50 of the gain is due to dividends I have received.  So essentially the stock has not moved since I purchased the stock.    While PG has a PE of 21.61 as of 7/7/14, which is a slight premium from the current market levels, I consider it one of those stocks I am willing to pay a premium to purchase.  Since the stock is very stable, I do not anticipate any wild price swings or earnings surprises that would cause the PE ratio to suddenly drop.  The company consistently raises its dividend (about 7% years) and has increased its dividend for over 50 years.   So with all things considered, I figured I would purchase additional shares to move some of my cash from the sidelines to the market.  I invested an additional $870 resulting in 10.7827 shares.  This will add $27.75 to annual dividend income.

In total,  I added $57.75 of dividend income to my portfolio today.  I am inching closer to my final goal of $1,750 for the year.  Has anyone else invested in the companies recently?  Have you ever paid a slight premium for the chance to purchase a strong dividend growth stock?  Any feedback is greatly appreciated!

~Bert

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15 thoughts on “Purchase Summary – 7/8/14

  1. Hi Bert,
    Both are great companies I think with strong brand values. I purchased 5.9 shares of PG today too as an automatic sharebuilder purchase and I’m happy with the 3.1% yield going forward as I expect it’ll increase over time too.
    Best wishes on your financial journey – keep it up!
    – DL

    • DL,

      Nice pick up this week. I am expecting a yield between 2.9% and 3.5% overtime based on price fluctuations as I expect the increse in dividend to mirror the price appreciation. I can’t complain about that for a company as sound as PG. Best wishes to you as well!

      Bert

    • Thanks Living at Home. You have sparked my next article, so I don’t want to respond too much in the comment. But essentially I have never really thrown together a formal Watch List of investments that I am monitoring reguarly. Instead, I have a built in stock screener on http://www.finviz.com that will help me identify any new stocks that may have slipped in price. While this isn’t company specific, it helps me identify any sudden drops in price. That is how I found DOW prior to my purchase. But going forward, I think it will be a better practice building a formal watch list.

      Hopefully this answers your question. In the meantime, I am always monitoring PM, MO, and WFC for a cheaper entry point.

      Thanks again for stopping by!

      Bert

  2. Made a into PG yesterday as well. Agree with the slightly overvalued scenario, but as a consumer staple with a 3.2%+ yield, and a fantastic track record, it has loads of value to me. It is a member of dividend royalty, and seems to have turned aorund its market share issues, so I will be continuing to add.

    • Thanks Dutch! It would be a great addition to your portfolio. Just to give ou a heads up, if you are trying to capture the dividend this quarter the ex-dividend date is July 16th. If you miss this quarter, there will be plenty more going forward. Keep us updated with your activity.

      Thanks again for stopping by.

      Bert

    • DD,

      Nice pick up this week! I am excited to see how Kraft’s dividend yield evolves over time. It seems like management will keep the yield at its current yield, but you never know what the future may hold. Hopefully they keep increasing it!

      Bert

  3. Bert,

    Nice looking buys here. PG is one of those great companies that makes it tough to not buy when you don’t know where else to go. KO is also up there.

    I personally am not as heavily allocated to PG as I’d like to be, but the current price just leaves a little to be desired. That being said, the odds of rising dividends for the next decade or longer are pretty high, and there’s a lot of value in that.

    Keep up the great work!

    Best wishes.

    • Thanks DM. I’m trying to not get caught up in paying a premium now, even though the price hasn’t moved and has increased slightly since my first purpose. I had to keep telling myself before the purchase that 30 years from now the premium paid will be so small I will have forgotten about it. Do you have an entry point in mind for when you would purchase more shares?

      I am always torn about KO. The company is like PG in the sense that it is a reliable stock with a great brand. The competition between KO and PEP is intense and both have many great reasons to invest in either company. Either would be a great addition to my portfolio and would provide me with nice annual dividend increases, so now I have to figure out which one. Thanks for giving me a new project!

      Thanks again for stopping by.

      Bert

  4. I feel its ok to pay a slight premium for very high quality stocks with great track records, especially defensive consumer stocks that do well in recessions. Very solid buys!

    Good Day and Grind On!

    • Thanks Asset Grinder! I am starting to think there are only a few companies that are worthy of such a premium purchase. And based on the other responses I have received, I am kind of surprised how many people are willing to purchase a stock like PG at a premium. I’m glad there was a lot of support for that kind of a purchase!

      Bert

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