Tuesday, October 23, 2012

Recent Buy

This morning I noticed that the stock market was set to sell off early so I set up a limit order for 25 shares of McDonald's $87.76.  I was debating on what price to set my limit order at but chose the $87.76 mark instead of $87.51 because $87.76 is still well under my fair value for McDonald's to trade for.  As it turns out McDonald's sold off to $87.32 at one point so I could have purchased them for a little cheaper, but in the long run it won't make that big of a difference.

McDonald's recently beat on revenue in their latest quarterly earnings announcement but missed on profit.  The biggest driver for an investment is the revenue growth since that triggers growth in everything else, including the dividend.  I posted my stock analysis on McDonald's back in May and while it's currently a little out of date it is still relevant because nothing fundamentally has changed with the company.  I will update it early next year after McDonald's closes out their fiscal year.

Now on to the details of the purchase.  I purchased 25 shares for a price of $87.76 per share.  Based on the recent quarterly dividend increase to $0.77 per share my YOC for the shares is 3.50%.  These shares will bring an additional $77 in annual dividend payments before further increases or reinvestment.  Since the next ex-div date is in late November I'll be receiving one quarterly payment of $19.25 from my new purchase this year. My YOC for my whole position in McDonald's increased from 3.44% to 3.46% while my YOC for my FI portfolio increased from 2.79% to 2.83%.  Forward 12-month dividends are now at $1,231.08.  It's great to see the progress that I've made so far this year.  I've increased my forward 12-month dividends almost threefold throughout the 2012 so far and I still have plenty more capital to get to put to work.

6 comments:

  1. Nice buy! You got in for a few cents better than I did in August. I picked up 22 shares for $87.80. As you mention, long-term it won't matter that much one price. I will be looking to pick up additional shares upon further weakness.

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  2. My average share price for the position is $88.94 so I still have some work to do to lower it down. I could have done a lot to lower the position by purchasing more shares but after the new purchase MCD is around 9.50% of my portfolio. Hopefully we can get some further weakness to let us all make some more buys.

    Thanks for stopping by!

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  3. Congrats on the purchase! I know you've been eyeing this one for awhile. I'm still watching MCD as well, and may add sometime in the next month or so.

    Also wanted to say congrats on the progress of your portfolio. That's over $100/month in dividends! That'll go a long ways toward helping reach early retirement.

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    1. Thanks. I've been trying to add some more to my MCD position to average down but the price just never came down to where I could buy some more until yesterday.

      It's awesome to see the portfolio getting ready to churn off $1,200+ in dividends for next year, I'm hoping to be able to get that up to about $1,500 by year end 2012 for forward dividends but we'll see how things go. I've got a little over $5k to put to work right now so we'll see how things go.

      Thanks for stopping by!

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  4. I like the purchase, I'm a huge fan of McDonald's! Being able to average down is always a bonus, good one!

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    1. I was glad to get a chance to average down. Maybe it'll continue to fall and I can get a chance to pick up some more. I don't see how you can go with Mcdonald's long-term. They're going to continue selling more and more burgers every year.

      Thanks for stopping by!

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