Friday, June 21, 2013

Recent Buys and a Dividend Increase

With more news of the Fed possibly tapering on their QE infinity, interest rates have started to move higher.  This has brought about some shakiness in the stock markets which is music to my ears and has allowed me to add to some recent new positions.  I doubled my total position size in both ExxonMobil and Chevron that I started within the past few weeks.  My cash had been sitting relatively idle thanks to the markets' run-up so far this year but I've slowly been starting to get more invested as the markets begin to waver a bit.

First up, I added 15 more share of Chevron at $118.49.  I was impatient with this purchase and should have stuck to my original price target, but I let the markets' jump this morning get the best of me.  I'm still happy with entry price as I'd been targeting around a $118.50 entry to average down my cost basis, although I could have gotten the shares for less then $118.  In the long run that won't matter that much.  Based on the current $4.00 annual dividend, the shares of the new lot will provide an extra $60 in annual dividends and carry and YOC of 3.36%.

I was able to purchase the shares for 4.6% lower than the original lot and lowered the whole position's cost basis by 2.3%.  My total position in Chevron will provide $120 in annual dividends before further increases or reinvestment.  The average per share cost basis is still a bit higher than I would like, but is still showing potentially 3.8% upside potential based on the 1 year price target per Yahoo! Finance.  And that's excluding the dividend.  Since I'm in it for the long run, any chance to lower my cost basis on high quality companies is always welcomed.

The second purchase was doubling down on ExxonMobil.  Last week I purchased 18 shares of XOM at $90.20 each and decided today was as good a day as any to add to that position.  I added 18 more shares of ExxonMobil for $88.98 each which works out to $89.42 after commission.  I didn't get to average down my cost basis as much as with the Chevron purchase, but I still believe that it's at a great price.  The shares were purchased for 0.9% lower than the original lot and lowered my total cost basis by 0.4%.  Based on the current annual dividend of $2.52, this lot will provide an extra $45.36 in annual dividends and carry a YOC of 2.82%.

With a average cost basis of $89.81 for my position I'm just a little bit over my target entry price for ExxonMobil, but the analysis was from almost a year ago.  I'm sure that has crept higher since I last examined the company and I haven't seen or heard anything to discourage me from adding to the position in that time.  Per Yahoo! Finance, the average analyst 1 year price target for ExxonMobil is $95.22, implying around 6% of upside potential excluding the dividend.

Medtronic also announced a 7.7% increase in their dividend raising the quarterly rate from $0.26 to $0.28.  Announcement of dividend increases always make my day since it means that I'm getting a hefty raise for being a loyal part owner.  This will provide an extra $7.26 in annual dividends from my position in Medtronic and increased my YOC for the position from 2.49% to 2.68%.

My FI portfolio's 12-month forward dividends are now at $2,931.22 which is 83.75% of the way towards my goal of $3,500 by the end of 2013.

I've updated my Portfolio page to reflect these changes.

Have you been making any purchases with the recent pullback in the stock markets?  What has caught your eye and capital?

6 comments:

  1. Pursuit,

    Great buys here. I really like some of the oil majors and wouldn't mind buying some XOM, CVX, RDS.B or BP next month.

    Gotta love those oil dividends!

    Best wishes.

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    1. DM,

      Cheaper prices for higher quality is always a good thing. I think I need to lay off oil/energy for the time being though as I'm a bit overweight. Healthcare is probably my most underweight sector. So hopefully the slide will continue and I can pick up some JNJ or BAX. I'd like to add to MDT but I don't think that'll come down enough to justify purchasing.

      Thanks for stopping by!

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  2. Great transaction. I added more PM and GIS to my portfolio this morning. Looking to add more of the following when I get my next paycheck: BAX, CVX and GE. Happy weekend to you!

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    Replies
    1. daebu,

      I like the PM purchase and actually added to my position late on Friday as well. GIS is great and I'd love to get a consumer staple food company other than MCD. I need to look a bit more into GE but I'm interested in starting a small position there. CVX and BAX are both great too.

      Thanks for stopping by!

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  3. Nice buys, I'm with DM about the oil majors. I've been adding aggressively to mine. I also just added some BP to compliment my RDS.B, CVX and COP.

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    Replies
    1. AAI,

      I like the purchases as well obviously. It was nice to get a chance to add to existing positions and average down my cost basis. I've got a small position in BP as well but no RDS.B.

      Thanks for stopping by!

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