As I'm writing this blog post, it's the last day of September. It's hard to believe, but there are only three months left in the year! Fall is here in Central Wisconsin, but you wouldn't know it based on the temperatures in the high-70s Fahrenheit today.
At any rate, it's time for me to discuss my capital deployment activity in September 2021 and the dividend stocks that I purchased for the month.
previous post of this series, it will be rare going forward that I discuss capital deployment within my employer-sponsored retirement account. That's because I stopped working there nearly three months ago to pursue writing on a near full-time basis with The Motley Fool and Seeking Alpha.
The only time I will be deploying capital in the account will be when dividends are paid and automatically reinvested to purchase more shares of the Capital Income Builder (CAIBX) mutual fund, which is what happened in September 2021.
The $70.00 in net dividends that I received during the month was reinvested into 1.018 shares of CAIBX, which should produce $2.17 in net annual forward dividends. This works out to a 3.10% net yield.
I started off September by first adding a share to my position in Altria Group (MO) at a cost of $50.91, which was just days after I wrote an article on the stock on Seeking Alpha discussing the recent 4.7% dividend increase.
MO isn't the flashiest stock, but its 7%+ dividend yield is supported by a sub-80% payout ratio and healthy fundamentals. That's why I added a share to my portfolio at a net yield of 7.07%, boosting my net annual forward dividends by $3.60 in the process.
The next stock that I purchased in September was VICI Properties (VICI), which was a new addition to my portfolio.
As I explained in a recent Motley Fool article on Realty Income (O) and VICI, there are a number of things that I like about the latter, such as its industry-leading weighted average lease term, 100% occupancy rate, and robust AFFO per share growth to support a safe and growing dividend.
That's why I added 21 shares of the stock to my portfolio at an average cost of $31.36 a share. Compared to the $30.24 in net annual forward dividends added from the purchase, this equates to a 4.59% net yield.
The other stock that I added to my portfolio in September was Bristol Myers Squibb (BMY), which is because outside of its top three drugs (Revlimid, Eliquis, and Opdivo) whose patents will all be expiring this decade, the company has a number of promising drugs in various stages of development.
The 10 shares of BMY that I added was at an average cost of $60.98 a share, which works out to a 3.21% net yield factoring in the $19.60 in net annual forward dividends that the purchases put in the portfolio.
I also added a share to my position in Lockheed Martin (LMT) at a cost of $339.82, which was just days before the stock announced a 7.7% increase in its quarterly dividend per share to $2.80.
As I explained in my dividend stock watch list post for September 2021, I planned on adding to my position in LMT because it is off to a great start this year, the balance sheet is strong, and the dividend is well covered.
Since I purchased before the dividend increase, my starting net yield was 3.06%. And with the dividend increase, my yield on cost is now 3.30%.
Since first opening a position in Visa (V) nearly two years ago, I added another share of the stock at a cost of $220.55.
With the global economic reopening playing out, V's low payout ratio, and top-notch balance sheet, I wanted to add to my position.
Compared to the $1.28 in net annual dividends that this purchase added to my portfolio, my net yield on this purchase was 0.58%.
Finally, I added a share to my position in Merck (MRK) at a cost of $71.85 a share.
The reason for adding to my position in MRK is that while its oncology segment led by Keytruda is important to the company, MRK is so much more than just oncology with its vaccines and animal health segments as I explained in a recent Motley Fool article.
Weighed against the $2.60 in net annual forward dividends that my purchase added to my portfolio, my net yield on the purchase was 3.62%.
September 2021 was the third straight month in which I deployed over $2,000 in capital (when including the dividends received that I always selectively reinvest), which is having a remarkable impact on the growth of the portfolio's net annual forward dividends.
I invested $2,021.41 in September 2021, which added $69.89 in net annual forward dividends across the seven positions that I added to or initiated during the month. This works out to a respectable average weighted net yield of 3.46%, which is right around the 3.5% range that I want to be near going forward.
When also considering that dividend increases received during the month added $9.93 to my net annual forward dividends, my net annual forward dividends surged from approximately $1,950 to enter the month to nearly $2,030 heading into October.
And since I'm expecting that I'll deploy $2,700 in capital (including reinvested dividends) in October 2021, I should end up around $2,125 in net annual forward dividends by the end of the month.
How was your September for capital deployment?
Did you add any new positions to your portfolio during the month as I did with VICI and BMY?
As always, thanks for reading and I look forward to your comments in the comment section below!
Awesome month of September and love to see that your investment capital is doing just fine with the transition. Sounds like you're keeping your previous I'm guessing 401k or similar account instead of rolling it over to an IRA. Any specific reason why? Our investment options have always been limited so I've always rolled it over when that's come up. Hope you crush it the last 3 months of 2021! Hard to believe that I'm writing that already.
Thanks for stopping by and the support over the years. I'm considering a rollover of my Simple IRA to be able to pick my own stocks, but I do like that CAIBX has exposure to AVGO, CCI, PM, MSFT, and AMGN. I wish you the best of luck these last three months of the year as well!ReplyDelete