Last week I made three transactions involving two different stocks.  Thus, the Portfolio continues to get shaken up a bit… though they were minor changes in the grand scheme of things.

The transactions started with a straight purchase.  I used some cash to buy additional shares of an existing holding, continuing to build a position I began last December.

That move was followed a couple of days later with swap of sorts.  I sold shares in an existing holding and subsequently poured the proceeds into the same stock I purchased earlier in the week.

So, it ended up being one sale and two purchases, resulting in a net investment and a boost to my forward dividend income.

Let’s find out more about these transactions…

 

Merck & Co. (MRK)

I started the week by taking some of my cash and boosting my position in MRK.  It was my 4th MRK purchase in the past 3 months.

MRK has been trading in the $75-$85 range for nearly the last 12 months.  I like the stock quite a bit at the $75 level.

I established my MRK position back in December at $82.90/sh., so this presented an opportunity to bring down my average cost basis while building my position.

On 3/9/21, I purchased 10 shares of MRK at $74.245/sh, for a total of $742.45.

The stock yielded 3.50% at my purchase price (a healthy 1.16% above my current Portfolio average of 2.34%).

This purchase added $26.00 of annual forward dividend income to my ever-growing total.  My MRK position grew to 40.039 shares with this purchase.

 

Gentex (GNTX)

GNTX is in the Consumer Discretionary sector, and the Auto Parts industry.  The company is most known for its automatic-dimming rearview mirrors.

This month I was expecting the annual dividend raise from GNTX.  However, earlier this month the company held the dividend stable when announcing the details of their next dividend payment.

While the company could certainly choose to raise the dividend in the coming months, it may very well wait until next year, too.

The past couple of years, the dividend growth has been waning, and it seems a raise may not be coming this year at all.  Stock performance has been good though.

Still, with a below-average 1.30% yield, I want to see stronger-than-average dividend growth.  With that dividend growth in question at the moment, and the stock price near highs, I decided to trim my position some.

On 3/11/21, I sold 50 shares at $36.825/sh. (almost 13% of my position).  After the SEC fee, the sale proceeds were $1,841.24.

At that sales price, shares of GNTX yielded 1.30%, over 1% lower than my current average Portfolio yield.

I sold 50 of the 250 shares from when I established my GNTX position on 6/9/2015 at $16.98/sh.  The sale resulted in a long-term capital gain of $991.84.

The sale also resulted in a $24.00 reduction in annual forward dividend income.

After the trim, I still have 339.178 shares of GNTX.  My GNTX position is now the 21st largest in my Portfolio, trailing Starbucks (SBUX) just a bit, but safely ahead of JPMorgan Chase & Co. (JPM).

 

Merck & Co. (MRK)

I hoped to put the GNTX sales proceeds into an existing holding that appeared more attractively valued, would offer the chance for dividend growth this year, and would boost my forward dividend income by offering a higher yield.

All those items were offered by going back to MRK for an additional purchase.

The price paid was a bit higher than my one from a couple of days earlier, but still under that $75 level.

This purchase of MRK was my largest yet, and it continued to whittle down my average per share cost basis.

On 3/11/21, I purchased 25 shares of MRK at $74.65/sh, for a total of $1,866.25.  The stock yielded 3.48% at my purchase price.

This purchase boosted my annual forward dividend income another $65.00.

My MRK position continued to grow and has now settled at 65.039 shares.  My cost basis dropped to $77.41/sh.

MRK is now the 43rd largest stock in my Portfolio (or 10th smallest, depending on how you wish to look at it).  This puts MRK well ahead of Lockheed Martin (LMT), and just behind The Walt Disney Co. (DIS).

Further MRK additions are a possibility if the price hovers in this area, or drops.

 

Summary

Last week I made a trio of buy/sell transactions.  First, I used some cash to buy MRK.  I then followed that up a couple of days later by trimming GNTX, then using the sale proceeds to add to MRK again.

With those moves, my Portfolio got a little less Cyclical, and a little more Defensive.

The 3 transactions saw me make a net investment into my Portfolio of $767.49.  Also, my forward dividend income jumped by $67.00, boosted by the comparatively high dividend yield that MRK offers relative to GNTX.

With the trim I made, I also recorded a long-term capital gain of $991.84.

Since no existing positions were closed out and no new positions were initiated, the number of stocks in my Portfolio remained at 52.

 

I’ve been adding to MRK quite a bit lately.  Have you been building up any particular position as of late?  Please share in the comments!