Medtronic has pulled back since I first initiated my position so I doubled up on it yesterday for a price of $40.75 per share. This brings my total position up to 90 shares. I'm hopefully done buying for a bit but I do have some cash available should the right opportunity pop up. Phillip Morris is high on my list and a pullback into the mid $82's would bring a few more shares my way. I'd rather not make any purchases this close to the fiscal cliff deadline, for some reason I believe that Congress will come to an agreement and keep us from dropping off the cliff. Whether a deal is reached or not I expect there to be big moves in the market next week in reaction to an agreement or lack thereof. Only time will tell.
I was able to average down my position in Medtronic bringing the cost basis down to $41.78 which is 2.01% lower than after my first purchase. This price is a 4.4% premium to my average fair value calculation of $40.01. The new shares carry a YOC of 2.54% which increases the YOC for the whole MDT position from 2.44% to 2.49%. Unfortunately this lowered my YOC for the whole FI portfolio down to 2.88% from 2.89% and my non-ESPP share YOC dropped to 3.19% from 3.22%.
My 10 year projected return is for a 179.23% return from price appreciation assuming the EPS grow at the rates used in my stock analysis and slapping a 13.8 PE ratio on that. If the dividends can grow at the rate I used as well, then I'll get a further 34.88% return from the dividends. This gives a total return of 214.11% which is annualized to 7.91%.
These shares will add an extra $46.80 in annual dividends bringing my forward 12-month dividends up to $1,770.65.