I’m back with another buy/sell update.  This week I snuck in a pair of transactions… my lone ones for the month of May.

By no means were they earthshaking moves that altered the landscape of my Portfolio.  Instead, they were part of the ongoing minor adjustments that I make over time to continue shaping my Portfolio to my liking.

This time around there was one sale and one buy.  The sale was a trim an Industrial holding that has disappointed me with its recent dividend growth.  The buy bolstered a Healthcare position I established late last year… a position which continues to grow nicely while I feel the stock provides good value.

I took the proceeds from my sale, and added a little cash to fund my one purchase.  So, it was just a minor net investment.  Still, the small amounts add up over time.

Let’s check out the transaction details …

 

3M Co. (MMM)

To be honest, I’ve been looking to trim MMM since early February, shortly after that feeble 0.68% dividend raise.  Dividend raises like that won’t help me reach my goals anytime soon.

It’s not like this small raise was a one time occurrence either.  MMM graced us with a 2.08% dividend raise a little over a year ago.  The trend has been down, that’s for sure.

Still, MMM has a long history of dividend growth (it’s a Dividend King, no less), and I suspect years of better dividend growth lie ahead, once MMM can get it’s business firing on all cylinders again.

At the time of their 0.68% raise announcement, the stock was trading around $175 or so – which I view as fairly valued.  Over the course of the past 3+ months, the stock has managed to climb over the $200 level.

This slight overvaluation presented me with my chance to execute that trim and reallocate the funds to a stock with hopefully better dividend growth prospects.

Also, you may recall, one of my goals this year is to trim the Industrials weighting in my Portfolio, as it’s my most overweight sector.  A MMM trim would serve to help me in that regard.

On 5/25/21, I sold 10 shares of MMM at $201.90/sh.  This was 19% of my position.  After the SEC fee, the sale proceeds were $2,018.99.

At my sale price, shares of MMM yielded 2.93%, which is 0.66% higher than my current average Portfolio yield of 2.27%.

My trim was a portion of my most expensive shares.  I sold 10 of the 25 shares that I initiated my MMM position with on the last day of 2018 at $189.50.

The sale resulted in a long-term capital gain of $123.19, as well as a $59.20 reduction in annual forward dividend income.

I still have a sizable MMM position of 42.519 shares.  This has the stock still ranking as my 30th largest position… behind Comcast (CMCSA), but ahead of Eastman Chemical (EMN).

 

Merck & Co. (MRK)

Healthcare stocks appear to be some of the most attractively valued to me these days.  I’ve added to my MRK position several times over the past few months, and I haven’t stopped yet.

My MRK position was initiated last December, and this is now my 6th addition since then.  This was also my largest MRK purchase thus far.

I used the proceeds from my MMM sale, along with a little over $300 in cash to make my MRK addition.

On 5/25/21, I purchased another 30 shares of MRK @ $77.65/sh., for a total of $2,329.50.  The stock yielded 3.35% at the time of my purchase (or 1.08% above my current Portfolio average).

I’ve purchased more expensive MRK shares, and less expensive ones as well, but this cluster was slightly above my per share cost basis.

The purchase resulted in the addition of $78.00 in annual forward dividend income – more than enough to cover the lost income from the MMM sale.

I now own 100.595 shares of MRK.  The stock moves up to the 33rd largest position in my Portfolio (out of 52 stocks), trailing Walgreens Boots Alliance (WBA), but leading Caterpillar (CAT).

I’d consider adding more MRK shares if they continue to hover in the mid $70s.

 

Summary

I made a pair of Portfolio transactions on 5/25.  This helped me avoid a transaction shutout in May.

A trim of my MMM position kicked things off.  I took advantage of a recent run-up in the stock price to replace some of these Industrial shares which have been displaying slowing dividend growth.

I then used the proceeds to continue to expand my MRK position.  I added 30 shares of the Healthcare giant to bring my total to just over 100 shares.

The two transactions resulted in a net investment of $310.51 into my Portfolio.  Meanwhile, my annual forward dividend income moved up by $18.80, keeping my future income moving the right direction.

As a result of the MMM sale, I recorded a long-term capital gain of $123.19.  The gain was rather minimal, as I chose to unload a portion of my most expensive MMM share lot.

With my sale being only a trim, and my buy involving an existing Portfolio holding, the number of stocks in my Portfolio remained at 52.

 

MMM and MRK have plenty of shareholders in the DGI space.  Do you own either of these stocks?  If so, what are you doing with them?  Buy More/Sell/Hold?  Please share in the comments!