Wednesday, April 25, 2012

Recent Buy

Yesterday I bought 9 shares in Walmart at a price of $57.71 in my Roth IRA. Recently, reports of Walmart bribing officials in Mexico for preferential treatment have been released. While this is concerning, it's one of those situations where everyone is doing it and they got caught. Any penalty stemming from this won't change the future for Walmart other than being just a little hiccup in the long-term. I am bullish on the company long term especially as a dividend growth stock. My YOC for this purchase is 2.71% based on the current forward annual payout rate of $1.59. Unfortunately this brings my YOC for my Roth IRA down to only 3.31%, but I'm getting a company that has historically had a high dividend growth rate. I would like to start purchasing in larger blocks but that was about the only ammo that I had in my Roth. I decided to pounce despite the limited capital because Walmart has pulled back 7.5% since the announcement of the bribery. My target entry price on Walmart was around $59 / share and I was able to get over a 2% discount to that. You can see my previous analysis of Walmart here.

While I think you will see Walmart shares drop lower later as more details come out about this I'm hoping they can wait until I have some more dry powder to throw their direction.

Building my dividend payers bit by bit.

3 comments:

  1. This falls into the category of companies whose stock I'd like to purchase but the yield just isn't there...

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    1. I'd definitely like to the get yield higher up, but you never know when that will happen. I'm expecting the shares to drop further to the $50-55 range sometime during the year and when that happens I'll plop down a good chunk of money to lower my cost basis and hopefully be able to get my YOC to the 3.00% mark. Thanks for stopping by.

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    2. My pleasure! I enjoy this site immensely!

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