I’ve got a few transactions to share involving a pair of stocks. This past week I trimmed one of my holdings and added to another.
In the grand scheme of my Portfolio these are rather small transactions, but they continue to shape what it looks like.
The moves started with me selling shares of a holding for the 3rd time in the past 16 months.
I’ve been disappointed with its dividend growth the past couple of years. Couple that with its relatively low yield and that’s not a good combination for me.
I then turned around and added some shares to one of my smaller positions… one that I established this past March and have added to once since then.
Did I sell more than I bought? What happened to my forward dividend income as a result? Let’s find out.
Here are the transaction details…
Gentex (GNTX)
Having failed to raise their dividend for each of the past two years, I continue to reduce my GNTX position and reinvest the dollars into higher-yielding stocks with better dividend growth.
I sold some GNTX in June, but this most recent sale was 50% larger. I ended up paring down my GNTX position by ~19.6%.
On 7/20/22, I sold 60 shares at $29.25/share. The sale proceeds were $1,754.96, after the $0.04 SEC fee.
This sale price was $1.30 per share less than my sale last month.
At my sale price, shares of GNTX yielded 1.64%. This yield is more than 1% below my current Portfolio yield of 2.73%.
I realized a long-term capital gain of $735.68 after selling more of the share lot that I bought for $16.98/share back on 6/9/2015.
The trim resulted in a reduction of $28.80 in annual forward dividend income.
My remaining GNTX position is still significant. I have 246.615 shares left. GNTX has slipped down my Portfolio rankings to become my 32nd largest holding. It’s now in the bottom half. In terms of value within my Portfolio, GNTX ranks just behind Omnicom Group (OMC) and just ahead of Bristol-Myers Squibb (BMY).
Verizon (VZ)
I established my VZ position earlier this year in March. I added to that initial position once, adding 40% more shares about 1 month later.
I’ve been content to hold my position steady since then… until now.
With VZ being one of my smaller positions, I decided to build it out a bit more. I like the current yield that’s well north of 5%, but the dividend growth of 2% keeps me from making VZ one of my more significant positions.
On 7/20/22, I bought 5 shares of VZ at $49.40/share, for a total of $247.00. This was a 9.9% increase in the size of my position.
One day later, on 7/21/22, I added another 5 shares of VZ at $47.40/share, for a total of $237.00. This was another 9.0% bump in position size.
The stock yielded 5.29% at my combined purchase prices (close to double my current Portfolio average).
Unfortunately, I added these shares a day or two prior to news being released about VZ losing retail subscribers in the latest quarter as well as cutting its full-year sales and profits forecast.
So, if wanted, I could now add a few more shares at even lower prices, as VZ dipped below $44 during trading on Friday. This possibility is something I’m mulling over.
I now own 60.552 VZ shares. While the purchases lowered my cost basis to $50.34/share, this is still well above the current price. One more small purchase to drive my cost basis below the $50/share level could be in order.
The two small purchases increased my annual forward dividend income by $25.60. This almost made up for the dividend income lost in the GNTX sale, despite using less than 28% of the sale proceeds to make the VZ purchases.
My primary plan with the majority of the GNTX proceeds is to build out my Medtronic (MDT) position a bit more, but I’d like to do that below $89/share. So, I haven’t made that move yet.
VZ now ranks as my 49th largest Portfolio position out of 58 stocks… so just inside the bottom 10. The stock sits well behind Microsoft (MSFT), but a bit ahead of The Walt Disney Co. (DIS).
Summary
I made another small handful of Portfolio transactions in July. I made 2 purchases and 1 sale involving 2 different stocks.
I continued the process of trimming GNTX due to slow/no dividend growth over recent years. This trim was a bit more significant than my last one… nearly a 20% cut.
Some of the sale proceeds were re-deployed into an existing holding in VZ, via two separate purchases. VZ is a stock that yields close to 3x what GNTX does. Also, even though VZ only offers ~2% dividend growth, it’s more than what GNTX has been providing over the past couple of years.
I hope to put the remainder of the GNTX proceeds into MDT if the price is right.
Accounting for all the transactions, I made a net withdrawal of $1,270.95 from my Portfolio. However, my annual forward dividend income only decreased by $3.20.
Also, I realized a long-term capital gain of $735.68 with the GNTX trim.
With GNTX remaining a part of my Portfolio and VZ already being a Portfolio holding, the number of stocks in my Portfolio remained at 58.
What stocks have been added to your portfolio recently? Do you own any VZ? Do you prefer T? I look forward to your comments!