More transactions to report…

Funds have been more limited these days.  However, that doesn’t prevent me from making some adjustments in my Portfolio.

With many of the more defensive names in my Portfolio holding up well with the recent market declines, I decided to trim a couple of these positions and use the proceeds to expand a couple of existing positions that have recently pulled back.  The adds were to stocks which I wanted to have a larger weighting.

These new transactions continue an active period over the past 6-8 weeks with regard to changes in my Portfolio.  As you may recall, I had a similar shifting of assets with OHI and ABBV earlier in the month, and a small flurry of other activity in October.

Here are the details for the 4 new transactions…

 

Hormel Foods (HRL)

HRL is a dividend king (currently with 52 consecutive years of dividend increases), residing in the Consumer Staples sector.  The company produces and sells various meat and food products in the U.S. and overseas.  Some of their most well-known brands include SPAM, Jennie-O, Dinty Moore, Wholly Guacamole, Applegate, and various items under the Hormel name, such as chili and pepperoni.

Earlier in the year, HRL was at a 52-week low, trading below $32, but it’s recovered nicely since then, with the price quite recently crossing above $46.  The company felt very fairly valued to me at these levels, so I decided to sell about one quarter of my position so that I could re-allocate the funds.

On 11/21/18, I sold 50 shares at $45.35/sh.  After the commission and SEC fee, the sale proceeds were $2,265.47.

The sale resulted in a long-term capital gain of $528.55.  I chose to sell some of my shares with the highest cost basis, minimizing the capital gain.  My HRL share count now stands at 156.600.

A reduction of $42.00 in annual forward dividend income came in conjunction with the sale.

 

Lowe’s Companies (LOW)

The proceeds I obtained with the HRL sale, went into buying more shares of LOW, another dividend king (56 years).  I would imagine most investors, especially the U.S. and Canadian ones, are familiar with this home improvement retailer.  Along with Home Depot (HD), LOW is a major player in the industry.  The company operates in North America, offering a line of products for maintenance, repair, remodeling, and decorating.

This is a position I want to build up, but shortly after my initial position was taken at ~$84 back in May, the stock went on a nice run up, climbing as high $117 just two months ago.  The market pullback that has occurred in October/November has helped knock the price of LOW down, presenting me with a chance to add at a desirable level.

On 11/21/18, I added 25 shares of LOW at $88.45/sh, for a total of $2,213.25 after commissions.  The additional 25 shares brings my share total to 85.586 shares.

This purchase also results in the addition of $48.00 in annual forward dividend income.

My LOW position is now slightly bigger than my HRL position, with both now having a Portfolio weighting of a little less than 2.5%.

 

W.P. Carey (WPC)

WPC is a net lease REIT, one of the biggest, in fact.  The company has invested in high-quality single-tenant industrial, warehouse, office and retail properties for over 4 decades.  The properties are subject to long-term leases with built-in rent escalators.  Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, tenant industry, property type, and geographic location.

As you may recall, I’ve been reducing the weighting of another REIT (OHI) in my Portfolio.  However, this is mainly to reduce my reliance on its potentially unsafe dividend.  However, it’s also part of a larger plan to reduce my REIT allocation overall, especially considering this is a taxable account.  The partial WPC sale is part of my effort to slowly reduce my REIT exposure, and not a concern over their dividend safety.

On 11/21/18, I sold about 22% of my WPC position, 15 shares at $68.64/sh.  After the commission and SEC fee, the sale proceeds were $1,027.59.

The sale resulted in a long-term capital gain of $88.80.  My WPC share count now stands at 53.524.

A reduction of $61.50 in annual forward dividend income occurred with the sale.

 

Altria (MO)

The proceeds I obtained with the WPC sale were used to secure more shares of MO.  The company is a Consumer Staple, but not a typical one, as it manufactures and sells cigarettes and smokeless tobacco products, in addition to wine.

I initiated a starter position in MO back in June of this year at just under $58.  MO was my smallest position for several months and always near the bottom with regard to weighting.  With the price recently diving from $66 earlier this month to a current level below my initial purchase price, I felt an addition was in order.  The decline started with the FDA proposing to pursue a ban of menthol cigarettes.

On 11/21/18, I added 20 shares of MO at $54.54/sh, for a total of $1,092.80 after commissions.  The additional 20 shares brings my MO share total to 70.633 shares.

This purchase also results in the addition of $64.00 in annual forward dividend income.

 

Summary

I continued with my recent Portfolio adjustments.  This round saw me trim a couple of positions (HRL & WPC) and use the proceeds to add to two existing ones (LOW & MO).

The sale proceeds essentially covered my purchase amounts.  I had a net cash outlay of $12.99 to execute these changes.  Of course, there will be taxes to pay on the long-term capital gains of over $600, but those aren’t too significant and may get cancelled out by realizing some capital losses before year’s end.

The net effect of these four transactions with regard to my forward annual dividend income is a small addition of $8.50.

 

Have you been re-shaping your portfolio recently?  Any thoughts about my transactions here?  If so, please feel free to share in the comments.