Well further weakness in the markets has allowed me to start or add to positions. I didn't go very heavy into any of these positions with the recent buys being in the $1,500-1,700 range. Typically I like to make larger purchases to help mitigate the effect of commission, but I chose the smaller purchases because the shares in some high quality companies were only trading at reasonable levels. Although not quite at undervalued levels. Earlier in the week I initiated a position in ExxonMobil and on Thursday I added to my positions in Coca-Cola and Wal-mart.
First, I purchased 22 shares of Wal-mart (WMT). I actually missed the purchase on Wednesday because my limit order was off by $0.01. Well, weakness early in the morning in shares of Wal-mart let me pick up some shares for slightly cheaper than my original limit order. I picked up the shares for $74.6299 each, the limit order was actually set for $74.63 but I got to save $0.0001 per share, what a deal! After commission my cost basis was $74.99 per share. This is for just over a 7% discount to my average valuation price, although still 8% higher than my target entry price that represents a real bargain price.
Based on the current annual dividend of $1.88 per share these shares will provide $41.36 in annual dividends and will carry a YOC of 2.51%. It's not the best starting yield but I believe it's still a solid price for Wal-mart since I expect solid growth in both revenue, EPS, and dividends for the next several years. Check out my recent stock analysis update of Wal-mart (WMT).
My second purchase was adding to my position in Coca-Cola (KO). It's another situation where I don't feel it's at absolute bargain prices but when a lot of share prices are overvalued, you need to stick with super high quality or sit on cash. I feel that my cash level is about as high as I'd like to get it so I needed to start deploying some savings. Luckily this came right when the markets started to cool off a bit with the increase in US Treasury yields and fears of the end or slowing of QE by the Federal Reserve.
I purchased 45 more shares of Coca-Cola for $39.72 per share to go along with the 35 I picked up last week. After commission my cost basis is $39.90 per share which is about 6% higher than my average valuation price, although Dividend Monk has a more recent analysis that has a fair value value in the low $40's so I got it cheaper than his fair value target. Based on the current annual dividend of $1.12 I'll receive $50.40 in annual dividends before reinvestment or further increases. This lot will carry a YOC of 2.81%. The YOC for my whole position in KO was lowered to 3.01%, which I'm still happy with.
Unfortunately I'll only be receiving 1 dividend payment from Wal-mart and Coca-Cola the rest of 2013 so they won't be helping out too much for this year.
As the title of this post mentioned there's also a dividend increase to report. I love dividend increase announcements. On Wednesday, Target (TGT) announced a 19.4% increase in the quarterly dividend from $0.36 to $0.43. The increase will provide an extra $7.07 per quarter and an extra $28.28 in annual dividends. Caterpillar also announced an increase on Wednesday over 15%.
My forward 12-month dividends are now at $2,815.20 which is 80.4% of the way towards my goal of $3,500 by year end. The YOC for my FI portfolio now sits at 2.99% and 3.36% excluding my ESPP shares.
I've updated my Portfolio page to reflect these purchases.