Dividend King Position Doubled

dividend king

Dividend King Position Doubled

 

Hey everyone

The market continues to go up, down and sideways. One tweet can change everything.

It’s interesting to see the hysteria the media likes to play out and people seem to be getting in the fear stage at the moment. I have friends who call or message me that their stocks are down and keep going down… This stock sucks, once it pops back up I’m selling it.

I try to reassure them that its indeed a good company and the whole market in general has been going down, but it falls on deaf ears. I think little moves like we are seeing are actually good for investors, obviously for numerous reasons. But a big one is to let people know the stock market doesn’t go up all the time….

If you are this shook from these minor moves the market may not be for you…..

I’m comfortable with the stocks we currently hold and any lower prices are welcomed with open arms.

Which brings me to our newest buy…. Normally I do a monthly watch list, but I decided to just pull the trigger and buy the stock once it dropped to my target price.

I was really interested in adding either 3m, Johnson and Johnson or Disney. 2 of these are existing positions and jnj would be a new comer. It seriously was a hard decision as these all seem to be at a good value at the moment.




The Buy

Tuesday the market, bounced and I thought I missed my opportunity and then Wednesday hit and most of the stocks I’m watching on yahoo finance went red…

$160 per share was the target I had set for 3m, $125 for JNJ and disney was $130. The first one to hit those marks would be my buy. If I wanted to buy 3m before their ex dividend date, Wednesday was the day.. The stock played with the $160 mark and then at lunch time it was under…

Take My Money……. I doubled our position in 3m by buying an additional 6 shares at $159.53 per share. It offered a starting yield of 3.58% and added $34.56 to our forward income. Sure it wasn’t a massive stack, but my goal is to always invest 1k a month and with the conversion its over that. Slowly but surely these positions increase in size.

3m A Hated Dividend King?

Let’s be honest, 3m has a lot of haters these days… It’s 52 week high sits at $219.75, we are way lower than that. Well we are right at 52 week lows. People tend to keep dragging it through the dirt, saying it will hit 120 soon, its the next general electric etc etc.

I think this stock screams buy for long term dividend growth investors. The last time I purchased 3m was at 190 per share, so I’ll gladly lower my dollar cost average while increasing my yield on cost.

3m is a dividend King. It really doesn’t need a introduction if your a dividend growth investor. They have raised their dividend for 61 years in a row….. 61 years, that is a lot of good times and bad times.

I think right now is just another bad time with the trade wars. This surely will pass, could the stock go lower? yes it could. But do I believe in the company? Yeah of course or I wouldn’t be a buyer.

The 3.5 plus starting yield is the highest of all dividend kings at the moment and one of the highest dividend yields 3m has had in 25 years…. Woot Woot!

The last 10 years their average dividend growth rate sits at a nice 11.70% per year.

Of course with every stock there are risks, these trade wars will hurt. The pending lawsuits will hurt, but the company has been around for over 100 years. It seen lots of this stuff.

Conclusion

One of my goals this year was to start positions in one or all of 3m, jnj and pepsi. I’ll gladly keep averaging into 3m at the moment at current prices. This is a solid wide moat, dividend king blue chip stock and a industrial one to boot.. (One of my lowest sectors) I always love adding to my lowest sectors and improving the dividend portfolio’s diversification.

Lets end this with Buffett’s most quoted quote. Be greedy when others are fearful…….

What do you think of this purchase? Have you been buying anything?

cheers!




18 Responses

  1. Havenโ€™t really looked at 3M, but JNJ is pretty close to my purchase price. Hoping it will drop down a bit more.

    Cheers

  2. Jon says:

    As you have purchased a USD stock, is this from USD dividends built up? Wondering your thoughts on the current exchange rate CDN/USD, or do you not look at the exchange rate when buying US stocks? I’m always wrestling with this one in my mind ๐Ÿ™‚

    Long JNJ and Pepsi!

    • Rob says:

      hey Jon

      Some of it was from dividends built up but ive been buying alot of us stocks lately, so the pool is small.

      I try to ignore the currency rate. In my opinion oil has to soar for the cdn dollar to rise or something has to happen to usd to tank.

      I rather just work on diversifying my portfolio better. Canada only has so many sectors. Us has some solid companies that can fill those holes.

      Plus these u.s companies pay in usd so that pool fills up faster for next time. =)

      So yeah i basically ignore the currency rate. But if it was in the 60s id stick to cdn stocks.

      cheers Jon!

  3. We’ve been watching MMM as well and may just buy in at current levels. Great dividend stock at a great value!
    A Frugal Family’s Journey recently posted…Mortgage Balance (UPDATE) – August 2019My Profile

    • Rob says:

      hey Frugal

      I think its a steal at current levels, but as a industrial it may be more volatile in a recession. Got to love these “dips”
      cheers!

  4. Can’t go wrong with a Dividend King! Great buy! Congrats! ๐Ÿ™‚
    My Dividend Dynasty recently posted…Recent Buys โ€“ LyondellBasell Industries (LYB) and AT&T (T)My Profile

  5. German says:

    Nice buy and good job lowering your cost. Right now there are some good buys. Even the banks pulled back to more compelling levels. Good luck with 3m position! Cheers!
    German recently posted…Canadian Stocks with August EX Dividend DateMy Profile

    • Rob says:

      hey German

      thanks man. Yeah the Banks offer good values at the moment. I think they are too big of positions for me right now, so unless they really crash I wont be buying any.
      cheers!

  6. PCI –

    Nice purchase all around. Love 3M and turn off the noise. Look at the balance sheet and metrics. Congrats on doubling down on a dividend king!

    -Lanny
    Dividend Diplomats recently posted…Bertโ€™s Recent Stock Purchases โ€“ MMM and XOMMy Profile

  7. I like the purchase, Rob. I don’t think you’d go wrong with any of your possible choices… they are all long-term winners and I expect that to continue.
    I need to average down on my MMM, too. Just made a bunch of purchases recently after selling a pair of stocks. However, MMM didn’t get added to. So many companies to buy/add, and so little cash!
    Engineering Dividends recently posted…Recent Buy โ€“ EMN, JPM, UNH, CAT, ALMy Profile

  8. I picked up JNJ last month. I’ve had MMM and several others on my watchlist, Recent volatility opens the door. Congrats
    Passive Cash recently posted…Passive Income Summary โ€“ July 2019My Profile

  9. Hey Rob,

    Good stuff. I loved the preamble about how so much of you say falls on deaf ears to stock market speculators (I refuse to call them investors if they’re worried every day about a percent here or there). I know that feeling (all they really want is a hot tip, not an investment discussion, in most cases).

    I don’t have any MMM, but it has definitely been a powerhouse for investors over the years. I have quite a few positions that I’m still looking to grow, but this is one I may well circle back to in time.

    Take care,
    Ryan
    Get Rich Brothers recently posted…Pilgrimage to Omaha: Berkshire Hathaway Shareholder EventMy Profile

    • Rob says:

      hey Ryan

      so true everyone wants that home run, instead of taking the balls and getting on base.

      Right now the market seems to be offering up some better deals. Like you id like to beef up my existing positions.

      cheers Ryan

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