August 2020 – Stock Purchases – Making My Money Work

August 2020 – Stock Purchases

hey everyone

Thought I would share with you my 2 most recent stock purchases. One was an existing holding (Always love adding to them) and I also started a new position.

The market isn’t really offering any exceptional bargains at the moment unless your looking to add some more retail reits, but as always we buy at least once a month and add 250$ to our xaw etf holding. This month was no different, but its also the time some of my favourite stocks go ex dividend.

JNJ

Last week we added 10 more shares of JNJ to our portfolio. The stock needs no introduction, its a dividend king and probably one of the favourite holdings among most dividend growth investors. We bought them for $147.37 a share. Definitely not a steal, but also not that bad of a price. You got to love the company and the brand they have. Also I really enjoy the healthcare sector as an investment. Boomers are getting older and there should only be more demand for medicine. Oh yeah and there is the chance they develop the covid vaccine… who knows.

What I do know is this purchase will add $40.40 to our forward dividend income and most likely will grow every year just like they have been for over 50 years now…

With this purchase we now have 33 shares of them and JNJ currently represents 4.2% of our total dividend portfolio. I wouldn’t mind adding a little more before 2020 is over and was even debating adding to them today.

The Vote

I kept debating what I would do with this weeks purchase… 4 stocks I kept looking at were – JNJ, 3M, Pepsi and Microsoft. All 4 of them I would eventually like to be my main holdings in each sector (Well besides 3M, CNR is probably my favourite industrial stock).

From a purely value point of view 3m is the cheapest and also offers the highest yield of the 4, but I also think it will have the lowest dividend growth rate the next couple years.

Pepsi I don’t own and definitely want to in the future, but their payout ratio is climbing up there as well.

Tech has absolutely been killing it since march, seriously massive gains. I keep saying to myself they are overvalued. I’m guilty saying that with microsoft at 150, 180 and even now…. But clearly this is where money has been going and earnings keep going up… Plus I need to get some more growth oriented stocks…. but do I want to pay the big bucks to start now? FOMO is real…

So I decided to see what everyone’s thoughts were on twitter and created a poll.

Within 6 hours 171 people had chimed in with their vote. I was actually a little surprised to see how much further Microsoft was on the poll versus the others. Talk about a hot stock….. (Btw feel free to join me & others from the personal finance community on twitter, it’s great there)

New Position

All 4 of those stocks in my opinion are great long term holds. I currently hold 3m and JNJ, but now also own Microsoft.

Like I mentioned earlier I have missed out multiple times thinking the stock is overvalued. Microsoft has been a stock we wanted to add to our portfolio for awhile but keep saying no to. Obviously that was a bad move in hind sight.. Tech and AI will be the future and yet our portfolio has been lacking in that department..

Are the tech stocks in a bubble at the moment? Kind of seems like it, but who knows.. I really like what Microsoft is doing and love the reoccurring revenue they produce. They also have a tonne of cash on hand and a triple A credit rating. The new xbox – series x comes out this November and will only bring more cash flow to the company…

Speaking of cash flow, that’s what we want – MORE CASH FLOW Right?

While that starting yield is nothing to get excited about currently they have been raising it for 16 years with a 10 year growth rate at 13.77%. Very nice and that stock price clearly has risen… Unfortunately that’s no good for us currently as a buyer, but long term it will be great..

So we bought a whopping 5 shares of Microsoft today at 210 a share… Feels weird only getting 5 shares for over 1k but could be worse that’s not even 1 google or half a amazon…

This purchase adds $10.20 to our yearly dividends… womp womp. A grower, not a show’er right?

Conclusion

Clearly these were long term moves. The starting yields on both of them were under 3%. The nice thing is in this current investing environment you want quality and safe dividends. Both these companies are the only U.S. AAA rated companies, Sport low payout ratios and share a nice history of growing those dividends…

All in All we added $50.60 to our forward dividend income and made our portfolio that much better.

What are your thoughts? Have you been buying anything or saving up some cash?

cheers!

Rob

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.