December was one of my more exciting months in a long time when it comes to making some buys for my portfolio.
41 transactions in total.
The final tally at the end of the month was that I added $1,304.04 to my investments and gained $360.54 in annual dividends. Taking profits and reinvesting resulted in getting a 27.4% return on my new money.
Took some profits. Closed out on companies I was sick of holding. Got into a few companies I had been waiting to get into. Reintroduced myself to one of my former major holdings. Lets go through these one by one after the chart...
TOOK PROFITS: Took some Apple profits (AAPL) . I was over 125% in equity gain. I do love them and are a solid stock to hold onto, I took the profits to get some shares that give a better dividend return. I will start buying them again in late March.
CLOSED OUT: Closed out on my gas companies. Got rid of Chevron (CVX) and Phillips 66 (PSX). I see them as mired in a world where we are heading away from gas and oil consumption. Covid has reduced commutes and I believe is a new normal. Yes, they had nice dividends, but were in no position to increase them in the foreseeable future. Bye bye. Not feeling a bit of remorse.
I also closed out on Wal Mart (WMT). I prefer owning Target, and I did not care for the way they pay out dividends. Announce 4 payments once a year and have them pay in an odd pattern. So I took their profits also.
NEW BUYS: Comcast (CMCSA). Been waiting far too long to get a position with Comcast.
AIG Insurance (AIG) Another patiently waiting on my watch list.
Lockheed Martin (LMT) Yet another that sat on my watch list forever.
Netapp (NTAP). A tech company that has was a good value IMO.
Seagate Technology (STX). Another tech company I wanted to pull a trigger on.
Smuckers (SJM). I honestly do not know why I did not own this years ago.
All of these companies passed my stock screener test: STOCK SCREENER(or at least got real close). They all have a decent P/E ratio in the low 20's and below. They all have a good track record of incresing their dividends. They all have a dividend payout ratio of 60% and under, so they have room to grow and also room to take a financial hit without affecting the dividend. And they all have a good track record of earnings per share growth (at least before COVID). The pandemic puts that metric on pause.
REINTRODUCTION: Back in early august, I wrote about how I jettisoned one of my biggest holdings, Whitehorse Finance (WHF), a business development company that I owned from their early days. They had always paid out about 10% annually in dividends and I took full advantage of that for a solid 6 years.
During the Pandemic, they took a major hit. I wrote about it here: JULY 2020 BUYS, SELLS AND MAJOR CHANGES - PART 1
Their payout ratio (normally in a safe range) spiked up to 947%. Their P/E also leaped up to 64.5. If they did not right the ship, both the dividend and their stock price would have taken a major hit. I had already experienced that with some REITs in 2019 and was not about to see my largest holding collapse.
Well, they righted the ship. currently, their P/E is at 8.67. And their payout ratio is back down to about 90%.
The cost of my protection from possible failure of WHF was a $450 dividend payout in Q4 and about $1 per share. A small price to pay for the security of not losing $17K had they gone tits up.
OTHER BUYS: I also increased my holdings in Kroger (KR), Western Union (WU), AT&T (T) of course, Robert Half (RHI), and Starbucks (SBUX).
To sum this up: This was one fun month in investing and like where I am at more than ever.
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