Recent Buys: June 5-10th, 2015
I was gun shy in May, but I’ve been making up for it by investing $5,306.33 in June so far. I added $190.61 to my 12 month forward income by spreading my contributions out over several existing holdings; I still own shares in just 25 businesses with plenty of room to expand. Each company pays me rising annual dividends and the more shares I can get, the more income my portfolio generates. Here’s where my new capital went:
On June 5th, I added 35 shares of Omega Healthcare Investors (OHI) for $34.80 each and a $6.95 commission for a total transaction of $1,224.95. The 6.21% yield provides $75.60 in annual income. My first purchase of this business was at the end of April when I got in at $36.76 a share. Nothing has changed so it was a no brainer to buy even more forward annual dividends for my money. The price may run down even further, and sadly I’ve maxed out my contribution limit for the year in the ROTH IRA where I hold it. If things do tank, I’m considering selling a few positions that don’t need to be in my tax deferred account to free up some funds. I’d likely repurchase them in my taxable account. I have a feeling there will be a few more REIT and Canadian Bank sales this year, and I’ll need some purchasing power. I present an updated fast graph of OHI. (For those unfamiliar with Fast Graphs, when the black current price line moves into the dark green earnings area it indicates the business is undervalued. Here is a basic demo on how to read fast graphs)
On June 8th, I added 8 shares of International Business Machines (IBM) for $165.97 each and $6.95 commission for a total transaction of $1,334.71. The current 3.13% yield provides $41.60 in annual income. I’ve been averaging down on this one for a while. I first bought it in September of 2014 at a lofty $191.47 a share, and then again in November at $163.70 a share. I’ve managed to bring my cost basis down to $174.06 a share or 9.09% lower than my original purchase. I like what’s happening at IBM these days. Anyone interested should check out their recently released: “IBM Strategy and Financial Model 2015” Which has several great charts that show how IBM is progressing and where it’s heading. Here’s an updated fast graph:
On June 9th, I added 19 shares of Baxter International (BAX) for $64.13 each and a $6.95 commission for a total transaction of $1,225.42. The current 3.24% yield provides $39.52 in annual income. That payout will be cut with the upcoming shareholder reward of a spin-off. The new company Baxalta (BXLT) will have a payout ratio of 15% of earnings while Baxter’s payout will be 35%. I’m happy to collect a smaller dividend for better long term results. These will be two brand new businesses after the spin-off, and I see a lot of value being unlocked. I started buying shares of BAX in November of 2013 and kept adding after they announced this spin-off. Even after all the buying, I still have a pretty high cost basis of $69.16 a share. Maybe I should have waited until after the spin-off to buy, but it’s hard to predict anything and I’m eager to see what happens. You can read technical information on the spin-off here. There’s also a slide presentation with more general information.
On June 9th, I added 14 shares of Union Pacific Corporation (UNP) for $99.95 each and a $6.95 commission for a total transaction of $1,406.25. The current 2.20% yield provides $30.80 in annual income. This was my sole purchase in May. It’s now under a $100 a share, and I thought it wouldn’t hurt to double down immediately. If we get a further pullback to the mid or low $90’s, I’ll likely be adding another batch.
I also had a few commission free Loyal3 purchases in Wal-Mart (WMT). I combined $15 in dividends with $100 in new capital to add 1.5757 shares for a yield on cost of 2.69%, which also provides $3.09 in annual income.
My new total annual dividend income is $2,078.69 or an average of $173.22 each month. I served tables up until a few years ago, and now it’s as if I’ve picked up two shifts a month without doing any work and the tips just keep getting bigger. I can’t wait to start earning an editor’s day rate in dividends.
What do you think of the purchases? What are you buying?