Recent Buy: July 2014

Today I initiated a small position in the very popular DGI company Johnson & Johnson;  I now hold 14 positions in my portfolio.  JNJ has been increasing dividends for 51 years and is still growing strong.  The company recently announced a 6.1% dividend increase and has a 10 year dividend growth rate of 10.9%.  I bought 18 shares at $101.59 and a $6.95 commision charge for a total of $1835.57.  I paid a bit of a premium for an excellent company with a trailing PE of 20 and a forward PE of 17.  The normal 5 year yield is 3.1%, and I’ll be starting my position with a yield of 2.8%.  This adds $50.40 to my annual forward dividends for a new total of $862.91.  By the end of the market day the stock went down even more, and the price was as low as $100.26 a share.  I’d love to add more to this position when the valuation is better, but I’m not sure when we’ll see that.   I’m adding here for the long term, and I won’t be worried about price as I watch my dividends grow larger each year.

My favorite recent article about JNJ helped me a ton in determining valuation, and it was penned by the talented JC @ Passive Income Pursuit and posted on Seeking Alpha.  He concluded it might be best to wait for shares to fall under $100.  Do yourself a favor and read it here!

Do you like JNJ?  What price would you pay?

 

My Dividend Growth

http://www.mydividendgrowth.com

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21 thoughts on “Recent Buy: July 2014
    1. My Dividend Growth

      MDP,

      Thank you very much! I’m liking your list there, looking at a few of those myself along with AFL, CB, WMT. Also looking into a newer dividend company called PDCO who seems stable and growing in the dental, veterinary, and rehabilitation markets. I’m definitely keeping some dry powder to load up if we see better values in the coming months! Keep up the good work with those weekly purchases!

      Have a great rest of the weekend 🙂
      ~Ryan

       
      Reply
  1. Dividend Growth Journey

    Ryan,

    Great purchase. It has been almost a month since I made any purchases as I have been waiting for some pullbacks. There are quite a few stocks that I like to initiate/add positions in and not sure how long I can to wait. Some of the stocks I am looking at include JNJ, MCD, KO/PEP and WMT.

    DGJ

     
    Reply
    1. My Dividend Growth

      DGJ,

      I hear you on waiting for pullbacks, I’ve got my emergency fund all set for that scenario. Wouldn’t it be so great to see some better prices to get a bigger yield in some of these great companies? I’m liking your list there, it looks a lot similar to mine. I’ll be interested to see when and what your next buy will be, and in which brokerage 🙂

      Thanks for stopping by and showing support!
      ~Ryan

       
      Reply
  2. Rob

    I’ve bought 48 shares at an avg price of $102.80 in the past 2 months. Would love for it to drop below $100 so I could grab some more.

     
    Reply
    1. My Dividend Growth

      Rob,

      Thanks for checking in. Great minds think alike, we are on the same page again! I was thinking it might drop below $100 on Friday and was possibly going to grab more right away. I’m with you though, anything below $98 seems like a good add. Here’s to tractors and healthcare!

      Take care this weekend!
      Ryan

       
      Reply
  3. DivHut

    JNJ is a great long term holding for any dividend growth investor. I have owned that stock since 2007 and have no intentions of selling for a long, long time. That being said, I haven’t added to my position in a long time either. I would like to but it seems little too pricey for me at these levels. Still, great choice on our part. I do appreciate reading a about a buy that’s not TGT 🙂

     
    Reply
    1. My Dividend Growth

      DivHut,

      Thanks for stopping through and I’m glad I didn’t bore you with more TGT, haha 🙂 I hear you on the current value of JNJ, I was right there with you for a long while. No idea where it’ll go from here but I really hope I can average down at some point. Even with the premium price I’m very happy to have started a small position in this great company. Loved your recent post ‘Canadian Century Club Dividend Stocks.’ I still have some room in my ROTH IRA and have been looking at throwing one in there. I had been waiting to see if the interest rate scare would bring REITS back down but it doesn’t seem that’s happening.

      All my best,
      Ryan

       
      Reply
  4. Mr. SFZ

    Nice buy Ryan. I’d really like to add JNJ to my portfolio as well, would just prefer it to pullback a bit more before I do. But, considering I bought Coca-Cola at a P/E of 20, buying JNJ at the same valuation makes sense. It’s definitely in the same tier of high quality dividend growth stocks.

    Best wishes,
    SFZ

     
    Reply
    1. My Dividend Growth

      Mr. SFZ,

      Thanks for the support! I agree with your comparison to KO, and what’s funny is I want to own KO, but had been waiting for a pullback there myself. They’re both historically great companies continuing to grow those dividends and in the long term, I don’t think we can go wrong getting in at these levels in either one. We just need to continue to build that income stream in awesome companies at fair valuations. Hope it’s been a good weekend for you and all is well finding furniture for the new place! Stay frugal, but don’t get a couch that feels like cardboard 😛

      Take care,
      Ryan

       
      Reply
  5. Dividend Mantra

    Ryan,

    Nice buy!

    JNJ is my largest holding at 100 shares, and for good reason. This is just a fantastic company. I wrote an article on it late last week (that’s being published next week on DTA) and I concluded fair value was right about $100. And there’s worse things you can do than buy equity in a wonderful business for a fair price!

    Best regards.

     
    Reply
    1. My Dividend Growth

      Jason,

      Really appreciate your support and signing off on this purchase, it means a lot! JNJ has been soooo good to you. I’m excited to add a small part of it to my own income stream. I’m really looking forward to your Daily Trade Alert Piece to give me some ideas on when to add to this position. I’m seeing you everywhere now that you’re writing full time; SA, DTA, GURUFOCUS, and you’re popping up on my SIGFIG feed a ton! It’s hard trying to keep up, have you considered adding links or a feed to all the side work you’re doing to your blog? If you’re legally able to do that it might help increase your traffic even more. So happy to see all your hard work and commitment is paying off my friend, keep building that audience!

      Have a great Sunday 🙂
      Ryan

       
      Reply
  6. Pingback: Weekend Reading – July 20, 2014

  7. Asset-Grinder

    JNJ is a corner stone investment. tough to beat the history of the stock as it is truley amazing. Hard to find a bargain on it and its still a good idea to pay fair value and slightly above for a AAA stock!

     
    Reply
    1. My Dividend Growth

      Asset-Grinder,

      Thanks for the support on this purchase, I couldn’t agree more. Eventually I would love to own as much as you do in it, very impressive totals you’ve got over there. It’s hard to believe they are still growing so fast with their size, truly amazing indeed! I appreciate you stopping by and look forward to seeing what you pick up next 🙂

      Have a great week ahead,
      Ryan

       
      Reply
  8. Tatu

    Just found your writing. JNJ and PEP is my largest investment in USA market. Now waiting when JNJ dip under 100USD to buy more. Market is little bit too hot for me now. Both companys have good history. My biggest positions are here in Finland.

    Keep up the good work

     
    Reply
    1. My Dividend Growth

      Tatu,

      It’s great to see a reader from so far away. Thanks for the support and for commenting! You picked two historically great companies for your largest USA market holdings. I can’t wait to join you in owning PEP, I wish I had purchased it when It was in the low 80’s early this year. I’m with you on JNJ, if it goes under $100 I’ll be adding more. Let’s hope the market cools off a bit soon so we can get better values.

      All my best,
      Ryan

       
      Reply
  9. JC @ Passive-Income-Pursuit.com

    I was busy and couldn’t/didn’t track the markets for about a week and look what I missed. JNJ’s price drop. Hopefully it’ll get down below $100 because I need to make this a larger position than it is. Also, thanks for the mention.

     
    Reply
    1. My Dividend Growth

      JC,

      I hate when that happens, sometimes I’ll step away for a few days and miss a price bounce of a great company. I’m with you hoping we see it below $100, I’ll gladly add more there. I would love for JNJ to be one of my biggest holdings in the future. Thank YOU for writing the great piece, I’m a big fan of your valuation articles.

      Have a great weekend!
      Ryan

       
      Reply
  10. Dividend Gremlin

    Nice buy. I have had JNJ on my radar for a while now, but have been waiting to buy. You are 100% right in buying JNJ, even if its for a little premium because that pick is worth every penny. Personally, I’d like to see a little dip below 100, but either way it is probably my next buy in my Roth.

    – Gremlin

     
    Reply
    1. My Dividend Growth

      Dividend Gremiln,

      I appreciate you stopping by and thanks for the support! With the recent drop in prices, it looks like you might have your opportunity buy. Let me know what you end up going with and keep that passive income rolling!

      All my best,
      Ryan

       
      Reply

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