On Monday, August 4th I purchased 27 shares of Aflac (AFL) for $58.63 per share. After commission my per share cost basis was $58.92. Based on the current quarterly dividend of $0.37 these shares will provide $39.96 in annual dividends and carry a YOC of 2.51%. I normally try to average down my cost basis but it's been a long time since I purchased shares of Aflac, about 18 months. Unfortunately this purchase increased my per share cost basis of Aflac by 6.08% to $53.63 with a blended YOC of 2.76%.
I have some concerns about Aflac mainly due to their large exposure to Japan. The Japanese economy continues to struggle but I believe that Aflac will do just fine in the long run. With the Affordable Care Act being implemented in the United States I expect to see supplemental insurance companies do quite well as the insurance through the ACA exchanges are quite expensive and from what I've read lacking in critical coverage areas. That's where Aflac comes in and should be able to grow their presence in the United States.
I mentioned in my Recent Buy post from last week that I was looking at ExxonMobil (XOM) for a potential purchase as well. The price came down enough for my limit order to trigger on Tuesday, August 5th. I purchased 16 shares of XOM for $99.12 per share. After commission my per share cost basis for this lot came to $99.62 per share. Based on the current quarterly dividend of $0.69 these shares will carry a YOC of 2.77% and provide $44.16 in annual dividends. This increased my position in ExxonMobil by about 50% from the last purchase that I had made. It had been over a year since I added to ExxonMobil and it was underweight in my portfolio when compared to its' counterpart Chevron (CVX). This purchase increased the per share cost basis of my position by 3.29% to $92.82.
The world needs energy and when it comes to relatively cheap sources per unit of energy fossil fuels are still leading the way. In 2010 ExxonMobil released a report on their forecast for global energy through 2040. Global energy demand is expected to rise by 35% in 2040 as the global population continues to grow and the emerging/developing markets continue to see the transition of people into the middle class and all of the consumption that entails. ExxonMobil expects that natural gas will see the largest net growth among the various energy sources while oil will grow as well. The one thing I'd like to see out of ExxonMobil is a bit more focus on the renewable sources. Renewable sources such as wind and solar will continue to grow their presence/reach. I personally feel we're still a long ways off from a behemoth like XOM being troubled by the switch from non-fossil fuel sources though.
I've gone through a lot of my cash stock pile but there's still plenty of ammo left should we get some better values. I've been a bit more liberal with my purchases due to the amount of cash I had on the sidelines and the fact that each month should bring another $4k+ in investable savings from my paycheck. I'm trying to focus more on adding to existing positions rather than initiating new ones, although there's a few companies that I have on my radar and positions open for. Some of the companies that I'm looking to add to are Johnson & Johnson (JNJ) (Full Analysis Here), Deere (DE), YUM Brands (YUM) (Full Analysis Here) and ExxonMobil (XOM), AT&T (T) as well as a few others.
My forward 12-month dividends are now at $4,924.58 which is 98.49% of the way towards my goal of $5,000 by the end of the year. I haven't increased my goal yet but expect to do so at my
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I've updated my Portfolio page to reflect theses additions.
Have you been making any purchases with the markets in limbo? What companies have you bought or are on your watch list?