Since the beginning of the month, I’ve had several Portfolio transactions take place without having reported on any of them.  Therefore, I may be guilty of having this post be overdue.  🙂

Recall, I had a sale late last month (see Recent Sell – ZION), so I had some cash proceeds I was looking to re-deploy.  However, before I even started buying… I had another sale, which I’ll discuss shortly.  After that sale, the buying finally commenced, so that’s good… I don’t want to be going backwards with respect to dividend income!

All totaled, there were 5 recent transactions, starting with that new sale I mentioned.  The sale eliminated a position, and the four purchases included adding to three existing positions and adding one new position to my Portfolio.

As it turns out, all the buying has yet to use up all the cash from the lone sale, so I’ll continue looking for more purchase opportunities.  Each of the new purchases also came with a higher dividend yield than that of the stock I sold.  So, I was able to replace all the lost dividend income, and then some.

Here are the details for my 5 transactions…

 

Cognizant Technology Solutions (CTSH)

I originally initiated my CTSH position in March of 2017, on the back of years of increasing revenues and earnings for the company.  CTSH initiated a dividend shortly thereafter, too.  The company continued its solid performance for about 1 year after my purchase, even raising that initial dividend in short order.  Things were looking good.

However, it’s been a downtrend ever since.  Early this year CTSH reported disappointing earnings and a challenging outlook for 2019, accelerating a stock decline that started about 9 months prior.  It appears that CTSH is now reorganizing, starting a transition away from its legacy IT services and moving towards its emerging digital business.  While the digital business should help eliminate customer demands for lower prices on an annual basis (which it sees with its legacy IT services), the digital business does come with lower profitability.

The kicker for me was that CTSH did not raise its dividend this year.  While CTSH only has a very short history of dividend payments, once they initiated one I was expecting strong dividend growth in the years to come.  With a business that appears to be in transition, and a stalled dividend, I decided to sell and re-allocate the proceeds.

On 11/4/19, I closed out my entire CTSH position, selling 102.424 shares at $62.06/sh.  After the commission and SEC fee, the sale proceeds were $6,354.30.

The sale resulted in a long-term capital gain of $433.86, and a short-term capital loss of $4.89.

A reduction of $81.94 in annual forward dividend income also occurred with the sale.

 

Starbucks (SBUX)

SBUX has dropped roughly 18% since it peaked in late July.  While SBUX is never cheap, I felt like it was low enough to add some shares to a position I want to grow.  While SBUX does not sport a massive yield, it does deliver some strong dividend growth.  While last month’s dividend raise announcement of nearly 14% was less than in previous years, if the company can continue with dividend growth of that magnitude in the coming years, then I’ll be more than happy.

On 11/8/19, I purchased 10 shares of SBUX at $81.55/sh, for a total of $817.50 after commission.  The stock yields 2.01% at my purchase price (below my Portfolio average).

My SBUX position has now grown to 115.521 shares.

This purchase results in the addition of $16.40 in annual forward dividend income.

 

Exxon Mobil (XOM)

While I can’t say I’m looking to grow my XOM position much more, I thought I’d take advantage of XOM trading in the upper $60s again, and lower my cost basis a bit.

XOM has certainly been range bound in stock price over the past decade, but its higher yield (currently over 5%) allows me to be patient with the stock while I wait for any sustained upward price movement.  XOM is my only stock in the Energy sector.

On 11/13/19, I purchased 10 shares of XOM at $68.79/sh, for a total of $689.90 after commission.  The stock yields 5.06% at my purchase price (nearly double my Portfolio average).

My XOM position has now grown to 118.198 shares.

This purchase results in the addition of $34.80 in annual forward dividend income.

 

Cisco Systems (CSCO)

The one purchase that led to a new Portfolio position was my purchase of CSCO.

Back in mid 2017, I was looking for CSCO to dip back below $30 before I initiated a position.  Of course, I missed my chance and then the stock ran up in price.

Just recently, CSCO delivered a decent earnings report, but with a less-than-rosy sales outlook.  That prompted a decline in the stock price to a level I view as a fair entry point.

This purchase allows me recoup some of the tech weighting in my Portfolio that I lost with the sale of CTSH.

On 11/14/19, I bought 75 shares of CSCO at $44.75/sh, for a total of $3,358.25 after commission.  The stock yields 3.13% at my purchase price (above my Portfolio average).

This purchase adds $105.00 to my annual forward dividend income.

I consider my new CSCO position to be a half position, one that I could expand should its price continue to decline into the upper $30s.

Here’s a look at CSCO’s dividend growth since it initiated a dividend back in 2011.

The dividend growth rate has dropped into the single digit range this year (something to keep an eye on).  We’ll see if this is the start of a new trend.  Otherwise, the 3-Year and 5-Year growth rates look very appealing.

 

3M Co. (MMM)

My final purchase of the group was an addition to the MMM position I initiated on the last day of 2018.

I’ve been looking to grow this position a bit given the decline in stock price over the past year, averaging down my cost basis at the same time.  There have been ample opportunities to do this recently, but I hadn’t made the move… until now.

On 11/18/19, I bought 5 shares of MMM at $169.4099/sh, for a total of $849.05 after commission.  The stock yields 3.40% at my purchase price (again, above my Portfolio average).

This purchase adds $28.80 to my annual forward dividend income.

My MMM position has now grown to 30.602 shares.

The current plan is to continue to build my MMM position over time.  A stock price decline into the upper $150s might be enough to entice another small purchase.

 

Summary

That was 5 transactions over a 2-week period in early November.  I closed out 1 position (CTSH), initiated 1 new position (CSCO), and added to 3 existing ones (SBUX, XOM & MMM).  The one sale resulted in a small capital gain.

The total number of stocks in my Portfolio stays at 46.

The net effect of these 5 transactions was the removal of $639.60 in capital from my Portfolio.  However, thanks to higher yields for the incoming stocks, it was an increase of $103.06 in my annual forward dividend income.  Interesting!

There’s still some cash left to deploy, including the proceeds from that ZION sale last month.  I’d better keep my watchlist updated.

 

Have any of these stocks been on your transactions list lately?  Please share in the comments!