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