This is going to be a fairly uneventful post, but it’s nonetheless needed if I plan to document all my transactions.

Early this past week, I added a single share of stock to one of my existing Portfolio positions.

It’s the first time I’ve added to this holding in over 18 months.  My position is well shy of wish I where it was, but the shares always seem to be too expensive, so purchases have been limited.

Let’s get to some specifics…

 

Microsoft (MSFT)

Since the start of the year, MSFT has declined nearly $80/share (from ~$336 to ~$256).  This puts the percentage decline close to 24%.

Of course, MSFT appeared overvalued at the higher price (was P/E of ~40) and one could argue the stock is still overvalued despite the decline (now P/E of ~27.5).

I’d still like to buy MSFT at an even lower valuation, but this has proven difficult over the past 3 years.

I’ve been looking to not only grow my MSFT position due to its small size within my Portfolio, but I’m looking to improve my Portfolio’s Information Technology weighting, too.

My last MSFT purchase was also a single share, at $213.50 a few days into 2021.  On a P/E basis, the stock price was more expensive back then at ~31 times earnings.

At that time, I was thinking I might add a share of MSFT every month in an attempt to build out my position, but I didn’t follow through with the stock becoming ever more expensive.

However, I think the time has come when I can add again.  So, I’m starting with this purchase.

On 7/12/22, I bought 1 share of MSFT at $256.00.  This was a 8.93% increase in the size of my position.

The stock yielded a less-than-impressive 0.97% at my purchase price (nearly 1/3 of my current Portfolio average of 2.78%).

My MSFT share total has climbed up to 12.193 shares.  Unfortunately, due to its low yield, MSFT only provides me with annual dividend income of $30.24.  I’d like to get this over $100.

The purchase raised my cost basis to $155.35/share, which was a significant increase of $9/share.

This purchase also increased my Portfolio’s annual forward dividend income, but only by $2.48.

Analysts have MSFT growing earnings about 16% per year over the next 2-3 years.  This should allow the dividend to keep growing at a double-digit pace.  MSFT has been averaging dividend increases in the 9%-13% range over the 1-yr., 3-yr., 5-yr and 10-yr. time periods.

In terms of my Portfolio value for MSFT, it remains the 48th largest holding in my Portfolio of 58 stocks, even after my purchase.  MSFT is a bit smaller than my Amdocs Ltd. (DOX) position, but larger than my Verizon (VZ) position.

With MSFT being an existing holding, the number of stocks in my Portfolio remained at 58.

 

Summary

I purchased one share of MSFT this past Tuesday.  The purchase of just one share increased my MSFT position by roughly 8.9%.

This was my first MSFT addition since January, 2021.  My price per share was higher with this most recent purchase, but the P/E ratio was lower.

The purchase resulted in a net investment of $256 into my Portfolio.  My forward dividend income only increased by $2.48.

I did boost my Portfolio’s Information Technology weighting a bit, and I’ve been trying to do that for some time.

Perhaps I can find a way to add another share in each of the next few months and build out my MSFT position.

 

What stock have you been wanting to add to your portfolio even though it never seems inexpensive?  Please share in the comments!