After a pair of Portfolio purchases kicked off my August transactions, I quickly followed that up with another pair of purchases.  Unfortunately, I’m only getting around to posting about it now.

Just like the first pair of buys I made this month, the next pair included two existing Portfolio holdings.

The first stock has been a part of my Portfolio for more than 8 years.  The last time I added to my position though was over 2.5 years ago.  I was due for an addition.

Strangely enough, the second stock entered my Portfolio about 2.5 years ago, however, it’s one I’ve now added to four times since then.  It’s a position I intend to keep building.

Let’s check out the details for each of the two purchases…

 

Realty Income (O)

I’ve been keeping my eyes on O for the past few months, especially since it started its short stints below the $60 level.  I believe the stock is slightly undervalued at that level.

O has been one of my better-performing Portfolio holdings over the years.  I’ve made some well-timed transactions with my shares and I hope this addition meets that criteria, too.

While O isn’t one of my smaller positions, it sometimes feels like it since it pays dividends monthly, which makes its monthly payment 1/3 of a normal quarterly payout.

This is my second time adding to my REITs in August, as I purchased some shares of National Retail Properties (NNN) recently as well.

On 8/3/23, I bought 13 shares of O at $58.70.  The stock was yielding 5.22% at that price, which approaches double my current Portfolio average of 2.77%.

My O position grew by 14.8%, and the number of shares I own rose to 100.641 shares.  The purchase increased my cost basis by close to $1/share, to $52.80/share.

Now that I own 100 shares, the possibility of selling a call option is on the table.

My Portfolio’s annual forward dividend income increased by $39.86 due to the purchase.  Thus, I can look forward to a dividend from O that’s about $3 more per month than it used to be.

O is currently my 38th largest position out of 60 stocks.  In my value rankings, O is a somewhat smaller position than Altria Group (MO), but slightly larger than Eastman Chemical (EMN).

Adding more shares to my O position is a possibility if its stock price continues to drop.

 

NextEra Energy (NEE)

I’ve been building up my NEE position in 2023.  This is my 4th purchase this year, adding to my initial stake that I claimed in early 2021, but didn’t add to in 2022.

Despite the fact that the stock remains overvalued to me, I’ve been adding shares.  What draws me to the stock is its nice dividend growth, in a sector that usually doesn’t offer much in that regard.  Its earnings growth also sticks out for a Utility stock.

Since the end of 2021, the stock has been in a downward trend, dropping from $93/share to about $68/share.  The stock hit my radar once it dipped below the $73.25 price that I established my position at in Q1 2021.

NEE is no longer in my bottom 10 Portfolio positions, so that’s some progress in building out the position.  Yet, it’s not even my largest REIT… that title goes to Pinnacle West Capital (PNW).

Earnings growth is slated to be in the upper-single digits for the next couple of years.  NEE has also mentioned dividend growth was likely to be in the 10% ballpark over that time as well.

On 8/4/23, I bought 10 shares of NEE at $69.75, for a total of $697.50.  This was my lowest buy price yet for any of my NEE share purchases.  The stock was yielding 2.68% at that price… just slightly below my current Portfolio yield.

My NEE position grew over 21.7% with the purchase.  The number of shares I own climbed to 55.986 shares.

This purchase lowered my cost basis by ~60 cents per share, to $72.46/share.

My Portfolio’s annual forward dividend income increased by $18.70 as a result of the purchase.

NEE is already more than $2/share cheaper than when I made this buy.  I suspect more NEE purchases will occur over the coming weeks and months should the price continue to decline and the valuation become more attractive.

In my Portfolio rankings, NEE is my 13th smallest stock.  It’s a fair distance behind Best Buy (BBY), and barely ahead of FedEx (FDX).  It would take an investment of over $1,100 to make NEE the largest Utility stock in my Portfolio.

 

With both O and NEE being existing holdings, the number of stocks in my Portfolio stays at 60.

 

Summary

I didn’t waste any time in making another pair of purchases in early August to follow up the initial pair.  I did invest nearly twice as much with these most recent purchases though.  Both stocks (O & NEE) got similar investment amounts… in the $700 range.

I added 13 shares of O to push me past the 100 share level, and 10 shares of NEE to continue building that position.  In the case of O, I raised my cost basis, while I lowered my NEE cost basis with that purchase.

The two buys resulted in a total investment of $1,460.60 into my Portfolio.  My forward dividend income rose by a healthy $58.56 as a result of the two buys.

Both O & NEE have dropped in price since I made these buys over 10 days ago.  Thus, they both remain on my stock-picking radar when looking to invest more capital.

 

Have either of these stocks (O or NEE) been in your shopping basket recently?  Do you already have one or both in your portfolio?  Please share in the comments!