Tuesday, December 29, 2020

December 2020 Dividend Stock Purchases

 As I'm writing this blog post, Christmas Day is in the rearview mirror and New Year's Day is coming up in just a few more days. 

With that in mind, I'll be discussing my dividend stock purchases that were executed during December 2020. 




Before I start off with the activity in my retirement account, I would like to preface this post with an explanation of why my buying activity for the month overall was over $3,000.

As some may be aware, Robinhood recently announced that it would be lowering its margin rates from 5.0% to 2.5%.

I saw an opportunity to add just over $1,800 in margin to my account (aside from the first $1,000 in interest free margin) to buy high quality dividend stocks with yields primarily in the 3-4% range since a margin call would require a 75%+ drop in my Robinhood portfolio and I 1) view that as a highly unlikely scenario and 2) have virtually no debt aside from my margin debt.

Without further ado, I deployed $341.67 in gross capital when including my 7% contribution to my Capital Income Builder (CAIBX) position within my retirement account, my employer's 3% contribution, and dividends/special dividends received during December.

When factoring in sales charges and the $10 annual fee that CAIBX charged in December for the upcoming year, I deployed $320.32 in net capital during December 2020.

This allowed me to build my CAIBX position from 140.581 shares heading into December to 145.695 heading into January 2021, which added $10.94 to my net annual forward dividends, assuming an annualized dividend/share of $2.14.

My capital deployment into CAIBX during the month equates to an average weighted net yield of 3.42%.

Moving to the activity within my Robinhood portfolio, I started the month off by initiating a 10 share position in National Retail Properties (NNN) at a total cost of $397.00 (which I essentially provided my explanation for in an article here on Seeking Alpha a couple months before I initiated my position).

My 10 share purchase of NNN added $20.80 in net annual forward dividends to my portfolio, which equates to an average weighted yield of 5.24%.

I also purchased 5 shares of WEC Energy Group (WEC) during the month at a total cost of $457.41, which when weighted against the $13.55 in net annual forward dividends added equates to an average weighted yield of 2.96% (for more insight into why I went on to initiate a position in WEC, I would refer interested readers to my article last month on the stock).

I added 3 shares to my position in Pfizer (PFE) (due to the fact that I believe in the company's R&D pipeline and commercial drug/vaccine portfolio at this time and the company appears to be trading at a slight discount to fair value), which cost $112.06, working out to an average weighted yield of 4.18% when considering the $4.68 in net annual forward dividends that were added with this purchase.

I also increased my position in CVS Health (CVS) by 1 share at a cost of $67.53 due to the stock's continued strong operating fundamentals (more on that in my upcoming SA article), which equates to a yield of 2.96% factoring in the $2.00 in net annual forward dividends that were added as a result of the purchase.

I added 2 shares of Realty Income (O) to my portfolio at a total cost of $121.92, which works out to a yield of 4.62% when considering the $5.628 in net annual forward dividends that were added with this purchase.

I also increased my position in PepsiCo (PEP) by 1 share at a cost of $144.76, which works out to a yield of 2.83% factoring in the $4.09 in net annual forward dividends that were added as a result of the purchase.

Another high-quality dividend payer that I added 1 share to my position in was Johnson & Johnson (JNJ) at a cost of $153.15, which equates to a 2.64% yield when considering the $4.04 in net annual forward dividends that were added due to this purchase.

I also added 2 shares to my position in GlaxoSmithKline (GSK) at a total cost of $72.80, which works out to a 5.49% yield factoring in the $4.00 in net annual forward dividends that were added with this purchase.

Next, I increased my position in British American Tobacco (BTI) by 2 shares at a total cost of $73.45, which equates to a 7.35% yield when considering the $5.40 in net annual forward dividends that were added as a result of this purchase.

I also increased my position by 1 share in Lockheed Martin (LMT) at a total cost of $351.26, which works out to a 2.96% yield factoring in the $10.40 in net annual forward dividends that were added due to this purchase (for further insight into why I went on to add to my position in LMT, I would refer interested readers to my October 2020 article on the stock).

I added 2 shares to my position in Cisco (CSCO) at a total cost of $89.48, which equates to a 3.22% yield when considering the $2.88 in net annual forward dividends that were added to my portfolio as a result of this purchase.

I also increased my position in Genuine Parts Company (GPC) by 1 share at a total cost of $100.27, which works out to a 3.15% yield when factoring in the $3.16 in net annual forwards that were added due to this purchase (for more of an explanation into why I added to my position in GPC, I would refer interested readers to my article this month on the stock).

I added 1 share to my position in W.P. Carey (WPC) at a total cost of $71.16, which equates to a 5.88% yield when considering the $4.184 in net annual forward dividends that were added as a result of this purchase.

Finally, I initiated an 11 share position in Aflac (AFL) at a total cost of $481.80, which works out to a 3.01% yield when factoring in the $14.52 in net annual forward dividends that were added due to this purchase.

Concluding Thoughts:

Overall, I added $110.27 in net annual forward dividends on the $3,014.37 in capital that was deployed during December, which works out to a 3.66% average weighted yield.

When factoring in the $46.76 in additional Robinhood Gold costs due to the aforementioned ~$1,870 in margin, a $19.20 downward adjustment to my Simon Property Group (SPG) dividends (there was a glitch between when I got my new smartphone and when I wrote my previous post of this series, which didn't account for SPG's dividend cut months ago in my spreadsheet that is synced to my blog's portfolio), and the $7.16 in dividend increases to my portfolio during December, my annual net forward dividends heading into 2021 are at an all-time high of just over $1,363.

Discussion:

How was your capital deployment during the month of December 2020?

Did you open any new positions as I did with NNN and WEC (and from a whole share standpoint with AFL, as I only owned a fraction of a share in my M1 Finance account prior to the purchase of 11 shares of AFL this month)?

I appreciate your readership and look forward to creating content in 2021! Please feel free to leave your comments in the comment section below.

2 comments:

  1. Kody, just wanted to say that I'm really enjoying your blog. Your transparency and the simplicity of your updates make it fun to follow your progress. Keep it up in 2021! Thanks

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  2. Thanks for the comment and I'm glad you're enjoying the blog!

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