Friday, June 5, 2015

Another Recent Buy


Whenever I make a new purchase for my portfolio I feel it's only fair to get a post written giving all of the juicy details. I want to be as transparent as possible with my journey to reach financial independence through dividend growth investing. Being open about the moves I make allows for better discussion with all of you and helps spread ideas around as well as letting me create my own "investing journal" to chronicle why I purchased a company in the first place and that way I can revisit if something changes and make the decision on whether to continue owning the company or not.

Well I hinted in my last purchase update that I was looking to average down my cost basis in Ross Stores Inc. (ROST) (Full Analysis Here) since the share price dropped over 5% from when I initiated my position.  That's exactly what I did on June 1st to get the month started right.  I purchased 13 more shares of Ross Stores for $96.57 per share.  After commission my per share cost basis came to $97.18.  Based on the current quarterly dividend rate of $0.235, these shares will provide $12.22 in annual dividends and carry a YOC of 0.97%.

I wasn't planning on adding to my position in ROST this quickly but the share price decline offered up an opportunity.  And if I like the shares at at $101 I should like them even more at $96.  Ross Stores deviates a bit from the companies that you'll normally find in my portfolio.  The majority of my portfolio falls in the medium starting yield medium growth range but I think there's room for a wide spectrum of investments including the high yield/low growth companies and low yield/high growth companies.  Ross Stores firmly falls in the low yield/high growth category with a starting yield that's less than 1% but the 10 year growth rate is superb at just under 24%.

I'm still very bullish on Ross Stores over the long term because of their recession resistant business model and ample room for continued growth.  The domestic market is far from saturated and there's also the possibility to expand internationally.  My position isn't technically full here yet but I won't be looking to add further unless the share price drops into the upper $80's.  The problem with retail is that it's very hard to carve out market share because the options are pretty much limitless for where you can purchase goods.  However, Ross Stores is able to offer discounts on department store items and everyone loves a discount.  You can check out my full analysis on Ross Stores over at Seeking Alpha for why I like them over the long term.

My FI Portfolio's forward 12-month dividends increased to $5,852.24.  Including the $55.98 from my Loyal3 portfolio brings my total taxable accounts forward dividends to $5,908.22.

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Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

3 comments:

  1. Nice buy buddy. Ross has a good track record and a great business model. Have a great weekend JC!
    -Bryan

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  2. Nice buy...way to add to that awesome passive income stream of yours. My wife loves to shop at Ross so we are contributing to their success and your stock! ;) ROST appears destine to be a great DGI in the making. With 8 consecutive years of dividend growth and a payout ratio of just 19.3%, looks like they will continue to provide dividend increases for years to come!

    BTW, we've added this purchase to our Collection of Recent Buys. Thanks for sharing.

    Best Wishes!! AFFJ

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  3. Thank you for sharing PIP. Good to see you hustling it up bud. It's always wonderful adding to our income stream. What a great feeling. You keep it up and take care my friend. I'll be travelling with you on this journey for a long long time my friend so take care of yourself.

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