Tuesday, May 10, 2022

April 2022 Dividend Stock Purchases

As I'm writing this blog post, it's currently 55 degrees Fahrenheit here in Central Wisconsin. Next week is going to reach highs in the low-80s Fahrenheit, so summer is unofficially just days away and we barely had a spring!

With that aside, I'll turn to the dividend stock purchases (and the one non-dividend stock purchase) that I made in April 2022.



I started April by purchasing five shares of Innovative Industrial Properties (IIPR) at an average cost of $166.59 a share. My reasoning for purchasing the stock was that its AFFO per share is growing like a weed (pun intended), the stock is cheap for its growth prospects, and the starting dividend yield is market-crushing. Given the $35.00 in net annual forward dividends that I added from this purchase, my weighted average net yield fittingly was 4.20% on 4/20.

I followed up my purchase of IIPR by adding a share to my position in Home Depot (HD) at a cost of $316.01. For those interested in my buying rationale, I recently wrote a Motley Fool article on the stock. Since the stock boosted my net annual forward dividends by $7.60, my net dividend yield was 2.40%.

My first non-dividend paying stock purchase was the online retail, cloud computing, streaming, and advertising giant Amazon (AMZN). Where do I start with the beaten-down tech stock? AMZN is the undisputed leader in online retail and cloud computing. 

With global e-commerce sales set to surge from $4.9 trillion in 2021 to $7.4 trillion by 2025, Amazon is best positioned to cash in on this fast-growing market. Not to mention that the global cloud computing market is forecasted to compound at a 17.9% annual rate from $250 billion in 2021 to $791.5 billion in 2028. 

This is why analysts anticipate that AMZN will deliver 40% annual earnings growth over the next five years, despite its massive size. And at my average cost basis of $2,891.05 for my 0.21 shares of AMZN, I paid a 2025 P/E ratio of 20.9. This is a reasonably attractive valuation to pay for a stock that still has plenty of growth left in its tank, even with the recent challenges when it reported first-quarter earnings recently.

That's also why I plan on investing $50 to $100 into AMZN each month going forward. But make no mistake, 95%-plus of my capital will still be dedicated to dividend-paying stocks over growth stocks. And as AMZN's growth decelerates, I believe it will begin paying a dividend to shareholders near the end of this decade.

My next dividend stock purchase was 17 shares of Comcast (CMCSA) at an average cost of $42.06 a share. Readers that are interested in my reasons for buying the stock can visit my April 2022 Dividend Stock Watch List post that's linked above where I discuss IIPR. The $18.36 in net annual forward dividends that I added due to this purchase works out to a 2.57% weighted average net yield.

I also added 12 shares of A.O. Smith (AOS) to my portfolio at an average cost of $60.28 a share. Readers again can get my reasons for this purchase by checking out my April 2022 Dividend Stock Watch List post. Since my dividend stock purchase added $13.44 in net annual forward dividends, my net dividend yield was 1.86%.

My position in Williams-Sonoma (WSM) was increased by one share at a cost of $137.44. My reasons are outlined in a recent Motley Fool article on the stock. This added $3.12 in net annual forward dividends to the portfolio, which is equivalent to a 2.27% weighted average net yield. 

I also added two shares of NextEra Energy (NEE) at an average cost of $73.65 a share. My net annual forward dividends increased by $3.40 due to my purchase, which works out to a 2.31% net dividend yield.

The next dividend stock purchase that I made was when I increased my Starbucks (SBUX) position by two shares at an average cost of $76.78 a share. Interested readers can read my recent Motley Fool article for my buying rationale. The $3.92 in net annual forward dividends that were added to my portfolio from this transaction equate to a 2.55% weighted average net yield. 

I also added one share to my position in BlackRock (BLK) at a cost of $652.26. For my reasoning, check out my recent Motley Fool article on the stock. Given the $19.52 in net annual forward dividends that this purchase added, this works out to a 2.99% net dividend yield.

My last purchase of the month came when I added two more units to my position in Energy Transfer (ET) at an average cost of $11.39 a unit. This boosted my net annual forward distributions by $1.60, which is equivalent to a 7.02% weighted average net yield.

My one stock sale during the month was when I closed my five share position in Warner Bros. Discovery (WBD) that I received when AT&T (T) spun its media assets off. I received $91.86 in capital proceeds.

Concluding Thoughts:

Factoring out the capital proceeds from my sale of WBD, I deployed $4,215.99 in capital for April 2022. The purchases made with this capital added $105.96 to my net annual forward dividend income, which is a 2.51% weighted average net yield.

And I also received $10.49 in dividend increases from my dividend stocks during the month. This helped to propel my net annual forward dividends from just less than $2,580 at the start of the month to over $2,690 heading into May.

Discussion:

How was your April 2022 for capital deployment and dividend stock purchases?

Did you open any new positions like I did with AMZN, AOS, CMCSA, and IIPR during the month?

Thank you for reading. Please feel free to comment below!

1 comment:

  1. Solid buy on Amazon, I believe over the long term the stock will bounce back.

    ReplyDelete