As I'm writing this blog post, it's hard to believe that we're nearly two weeks into 2022. The temperatures remain frigid, with the lows bottoming out in the double-digits Fahrenheit below zero in Central Wisconsin.
With that aside, let's look at my dividend stock purchases that I completed to close out the last month of 2021.
Starting with my retirement account, the net dividends that I received from my Capital Income Builder (CAIBX) mutual fund holding within my retirement account were reinvested. As the quarters progress, this will be the only way that my share count of CAIBX continues to grow since I left the job that sponsored my retirement plan six months ago to write full-time.
When also factoring in the $10 annual fee for 2022 that was deducted from my CAIBX share balance last month, my share balance grew 2.444 shares from 176.015 to 178.459. Assuming net annual dividends of $2.13 per share, this led my net annual forward dividends $5.21 higher. And based on the $166.90 that was reinvested after the $10 annual fee at an average cost of $68.32 per share, this works out to a 3.12% net dividend yield.
Moving to my Robinhood account, I started off the month by purchasing 13 shares of Alliant Energy (LNT) at an average cost of $58.85 per share. My rationale for this purchase was outlined in my December 2021 Dividend Stock Watch List post a while back, which included LNT's dividend growth track record, strong balance sheet, and reasonable valuation. Given the $20.93 in net annual forward dividends that were added due to my purchase, my net dividend yield was 2.74% on this investment. And with a 6.2% dividend raise that will officially be announced this month, my yield on cost will go moderately higher in the near future.
I also added another share to my position in Crown Castle International (CCI) at a cost of $193.20. As I discussed in a Motley Fool article from a couple of months ago, I believe CCI is a stock with secular growth catalysts and strong dividend growth potential at a fair valuation. This dividend stock purchase boosted my net annual forward dividends by $5.88, which equates to a net yield of 3.04%.
Another stock that I added to in December was WEC Energy Group (WEC). I purchased another share of the stock at a share price of $93.75. This was based on the investment thesis that the essential nature of WEC's services and its low dividend payout ratio will make it a dividend stock that will pay investors for life. Based on the new annualized dividend per share of $2.91, this worked out to a net yield of 3.10%.
I also purchased three shares of Hershey (HSY) during the month at an average cost of $189.83 a share, which was my first whole share purchase of the stock. This decision can be explained by HSY's dividend growth track record, solid financial footing, and rational valuation, which I also noted in my December 2021 Dividend Stock Watch List post. Against the $10.81 in net annual forward dividends that were added to my portfolio, this translates into a 1.90% dividend yield.
Another position that I added to in December was the Dividend King Leggett & Platt (LEG). I upped my position in LEG by buying four shares of the stock at an average cost of $39.98 per share. In terms of quality, you can't get much better than LEG. And at a forward P/E ratio of barely 13 ($3.03 average 2022 EPS estimate), this was too much of a bargain to pass up. Considering the $6.72 boost in my net annual forward dividends, this works out to a net yield of 4.20%.
The final dividend stock purchase that I made within my Robinhood portfolio was the nutrition and weight loss company Medifast (MED). I opened a three share position in the stock at an average cost of $204.50 per share. At my purchase price, MED was trading at a forward P/E ratio of just over 12. Stacked against analysts' annual earnings growth estimate of 20% over the next five years, this was a classic growth at a reasonable price stock to buy. And what makes the stock even better is that it has no long-term debt. This should allow MED to build on what has been a short, yet impressive dividend growth track record. Given that my purchase of MED added $17.04 in net annual forward dividends, my net yield was 2.78%.
The first and only dividend stock that I bought in my Webull account was one unit of Enterprise Products Partners (EPD) at a cost of $21.58. A look at my portfolio reveals that I am a huge believer in EPD, which is my largest investment holding in terms of the annual passive income that it provides to me. The short and sweet explanation is that EPD is arguably the best business in its industry. What more proof does one need than the company's 20+ consecutive years of distribution increases? The $1.80 in net annual forward distributions that this purchase added to my portfolio worked out to an 8.34% net yield.
During the month of December, I put $2,583.33 in capital to work when including reinvested dividends. This investment activity is what allowed me to grow my net annual forward dividends by $71.30 during the month. This equates to an average weighted dividend yield of 2.76%, which should bode very well for the future dividend growth of my portfolio.
When also considering the $17.98 in dividend increases that I received during the month, my net annual forward dividends advanced from more than $2,205 entering the month to $2,295 heading into January 2022.
How was your December 2021 in terms of capital deployment?
Did you open any positions in your portfolio as I did with LNT, HSY, and MED?
As usual, thanks for reading and feel free to share your thoughts in the comment section!
Those are some great picks. I have a bit of HSY in my retirement account along with MDLZ. These should be safe, stable names during market turmoil.ReplyDelete
Do you think we'll see a correction this year or are the rate hikes already baked in?
With the Fed expecting at least 4 rate hikes this year, you'd think that most of that has been priced into markets. The S&P is down 8% and the Nasdaq is down 13%. Not to say we couldn't see a bit more downside. Thanks for the comment.ReplyDelete
Love seeing another buy of HSY. I need to take another look at them, but wish I had loaded up more when it was around $90-120 several years back when I first started buying. I can't complain about the results, but man it'd be nice if the position size was larger.ReplyDelete
Thanks for the comment. Unfortunately, HSY has trounced the market over the past month. I was hoping to add more this month, but the valuation seems a bit stretched now.ReplyDelete