August 2020 – Stock Purchases – Making My Money Work

August 2020 - stock purchases

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!

30 Responses

  1. jimmbboe says:

    Excellent purchases!! MSFT & JNJ are 2 of the 1st stocks I bought when I started. i still hold 6 of those original 7!

    • Rob says:

      Nice Jim

      That’s alot better than me. I sold most of my originals. (some at great profits, some at losses)

      blue chips are my favorites now though.

      cheers Jim!

  2. DG Capital says:

    Great addition to your portfolio! I’m a big fan of MSFT, they’re a beast when it comes to growing out cashflows with new innovations. Plus they dividend distribution policy is very shareholder friendly.

    DG Capital

  3. DividendsOn says:

    Since I got badly burned owning a few individual tech stocks during the collapse almost twenty years ago, I’ve kept far away since. Whatever technology allocation is in the balanced index ETF in the registered accounts is just fine with me.

    Now I just purchase boring individual dividend growth stocks for the non-registered account that aren’t the market darlings.

    Good luck with MSFT.

    • Rob says:

      Yeah hopefully that doesnt happen but of course the risks are there at p/e ratios like now..

      Definately not the cheapest stock out there. We also get some exposure from xaw for them.

      curious what stocks are you buying?
      cheers

  4. Jake Coady says:

    I have also been looking at JNJ, and it looks like a good buy. My Grandad recently suggested a stock to me: Well Health Technologies. A penny stock that has seen some decent growth, and it combines healthcare and technology. Stay safe

    • Rob says:

      hey Jake

      Ahhh I have tried a penny before and its didnt work out for me so I stay away from them.

      Best of luck to you though. Jnj is a forever stock one you can hold long time!

      haha cheers

  5. JamesB says:

    I have been buying MSFT and JNJ since early June. 1 of each every two weeks…

  6. I have been saving up cash in TFSA for a bit. Looking to make a purchase in that account. Thinking about Telus (target $23.00) and FTS (Target $52). Telus will allow me to DRIP. Thinking about TD also but would like a little more cash to purchase a few extra shares.

    Almost bought ADP in RRSP when it was trading below near low $130s. Never reached my limit price ($130.50) and shot up. I believe it was you that tweeted about the big fall in the price of it.

    MSFT and JNJ are rock solid. Sleep well at night stocks!!

    • Rob says:

      hey pursuit

      Nice man. like those target prices.

      I scooped up more telus last time it was under 23. I’d love to grab some more as they still seem relatively cheap and want to get more drips.

      I’d say if that purchase allows you to drip telus go for it.

      Td is great too but personally I got to work on other sectors vs more banks.. Just in case lol.

      cheers man! look forward to reading your purchase

  7. DividendsOn says:

    Only new stock I’ve bought for our all Canadian non-registered account this year is AQN. The others I’ve been just adding to. KEY, EMP.a, TD, CSW.a, PPL, CPX. Like I said Rob, nothing exciting there, but I wouldn’t be buying them and similar if I didn’t like them.

  8. Dominique says:

    I’ve had Amazon (3 shares @ 500$) and Nvidia (29 shares @ 50$) since 2016. Nvidia is reporting it’s results today, with the new generation of GPU being presented on september 1st. My friend also has AMD. The best tech stocks would be Microsoft, Nvidia, AMD, Apple, Amazon, Tesla (when it drops, not right now), Adobe. Do not touch Intel, AMD is on fire and taking market space every day.

    For a more daring tech stock I recommend taking a look at MTCH (Match group inc). They’re behind Tinder, match.com, okcupid, etc. In the next 10-15 years I can see mainstream dating going digital. Also Data centers REIT are killing it : CoreSite Realty Corp. (ticker: COR), Digital Realty Trust ( DLR), Equinix ( EQIX), CyrusOne ( CONE) and QTS Realty Trust ( QTS). These are really future proof

    • Rob says:

      nice Dominique

      Your doing great on those positions.

      Interesting about match I’ve heard that before they are even doing good during this pandemic…

      cheers

  9. PCI –

    Bad ass moves, all I have to say.

    -Lanny

  10. DivHut says:

    Every name mentioned seems to be a good long term hold. MMM, JNJ and PEP have been with me over a decade and in March I started adding MSFT and AAPL to my mix too as my tech exposure has been very light. Also have some AVGO. Nice buys all around.

  11. German says:

    Great job buying the best of the best. No wonder why people upvoted Microsoft! Great company. Everybody is using their products. And if the price does come down just average down, no biddy.

  12. Family Money Saver says:

    Good choice, of all the big FAANG type stocks currently, MSFT would be my pick as well.

  13. Engineering Dividends says:

    Laying claim to all the AAA-rated stocks in the marketplace… I like it, Rob. I own both JNJ and MSFT, with much more of the former. I finally initiated a position in MSFT back in March. Wish I’d been smart/courageous enough to buy more at the time. Oh well, at least I have some exposure.
    I happened to purchase some MMM this past week.

    • Rob says:

      ahhh nice Paul

      Great timing for microsoft and gotta love 3m at these levels. My industrial sector is up there atm but if 3m stays arond these prices Ill be adding!

      hhaha cheers man

  14. TPM says:

    JNJ is a fantastic long term holding. We sold it a while back, but probably should have just held on to it.

    • Rob says:

      hey turning

      welcome to the site.

      It tends to be one of the most popular dgi companies out there.. I will be holding ours longterm, but hope it dips to accumulate more. Im sure eventually you will find a price target you like.

      cheers point!

  15. Timothy says:

    MSFT may not be a good buy simply because it has gone up a lot. When the tech sector corrects, it can drop a lot. (It is a solid company but now is not the time to invest in it).

    • Rob says:

      hey Timothy

      I definately agree. In the past I have avoided tech due to the runup. I decided to dip my toes in to better follow the stock. They are on list for the next market correction.

      Long term I think I will be fine with this purchase though.

      cheers!

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