I’m back with another Portfolio transaction update (albeit long overdue).  In this case I made a couple of transactions, selling one position and starting another… a stock swap.

The swap was rather straightforward.  I soured on one stock after its frozen dividend growth and deteriorating business prospects cratered the stock price and left its dividend safety in question.   In turn I bought another stock that has had some price struggles in 2023 as well, but has a dividend that is much safer.

The yields of the two stocks were nearly identical, which allowed me to transition from one to the other without much change to my dividend income.

Let’s check out the specifics for these two transactions.

 

Walgreens Boots Alliance (WBA)

I initiated my WBA position back on the last day of Q3 2020 at $35.95.  The stock rose nicely after my purchase.  It was over $52 at the end of 2021.  But how quickly things can change.

WBA has had a rough time of it since the start of 2022.  Its stock price has been nearly cut in half and its dividend growth has slowed significantly.

Its dividend safety looked OK though, until the past 6 months, and now that has tanked as well.  This is what drove me to finally cut my losses and eliminate this position.

What made it difficult to move on was figuring out where to put the investment dollars once I sell such that I could get roughly equal dividend income.

On 10/3/23, I sold all 168.124 shares at $22.55/share.  The sale proceeds were $3,791.17, after the $0.03 SEC fee.

At my sale price, shares of WBA yielded a massive 8.51% which was close to triple my Portfolio yield at the time.

I realized a long-term capital loss of $2,267.96 and a short-term capital loss of $82.53.  The sale resulted in a $322.80 decrease in my annual forward dividend income, too.

This is the 3rd stock elimination of 2023 in my Portfolio, each of which has ended in a capital loss.  The other two stocks were 3M Co. (MMM) & Medical Properties Trust (MPW).

Since my initial WBA purchase on the last day of Sept. 2020 until this final sale, I calculate my annualized return for WBA at -10.02%.

The number of stocks in my Portfolio temporarily dropped to 59 after WBA was removed.

Here’s what I did with the WBA sale proceeds…

 

Enbridge (ENB)

I’ve haven’t owned any Canadian stocks in my Portfolio before, but I’m venturing out now.

ENB offered an equivalent yield, better dividend growth (still slow, however) and a safer dividend than WBA, so it seemed like a decent replacement.

As an added bonus, it becomes an Energy stock for my Portfolio.  I’ve been looking to add a stock in the Energy sector for years now, providing a little representation there, and this gets the job done in that regard.

Like WBA, ENB has been dropping in price in 2023… it’s fallen about 20%.  Part of that drop was recent and due to ENB buying a portion of Dominion Energy’s utility network in the U.S., increasing its natural gas distribution.  The move should provide for a more stable and diversified earnings stream for ENB.  However, this comes with the hope that natural gas remains a transitional energy source while North America looks to reduce its use of fossil fuels.

On 10/3/23, I initiated my ENB position by purchasing 121 shares at $31.40/sh, for a total of $3,799.40.  The stock yielded 8.47% at my purchase price, which just about matches the yield WBA was providing.

The purchase added $321.86 to my annual forward dividend income.  This nearly recouped all of the dividend income lost in my WBA sale.

ENB entered my Portfolio as the 15th smallest position, which is fairly significant for an initial purchase of mine.  It sits noticeably behind Hormel Foods (HRL) in my Portfolio value rankings, but is just ahead of FedEx (FDX).

I’ll be interested to see how owning ENB is handled by my broker.  Will they withhold taxes on the dividends?  I guess I’ll find out in December as that’s when I’m slated to receive my first ENB dividend.

 

As I normally do with a new holding, let’s take a quick look at the dividend growth history dating back to 2000…

 

 

I listed the dollar amounts in Canadian dollars, that way the percentages aren’t impacted by the varying exchange rates used to convert to U.S. dollars.

ENB has had a very strong dividend growth history over the past 2 decades, although that growth has slowed significantly in the past couple of years.  I suspect that slow growth won’t be changing if/when ENB announces a dividend raise in November.

ENB has a dividend dividend safety rating of ‘Safe’ from Simply Safe Dividends (score of 70 out of 99).

The addition of ENB raised the number of my Portfolio holdings back to 60.

 

Summary

I’ve been slacking in terms of making timely Portfolio transactions posts.  Better late than never though.

Early in October, I made a pair to Portfolio transactions.  With the first transaction, I said goodbye to a poorly performing holding (WBA).  With the second, I said hello to a new Portfolio position (ENB)… an Energy stock no less!

All my WBA sale proceeds were invested into ENB.  The two stocks essentially had identical yields, so the change in dividend income was minimal.

All totaled, the 2 transactions resulted in a net investment of $8.23 into my Portfolio.  My annual forward dividend income declined a smidge, by $0.94.

With the WBA sale, I recorded a long-term capital loss of $2,267.96 and a short-term capital loss of $82.53.  Realizing a loss is never fun, but I’ll use the loss to offset some capital gains come tax time.

While WBA exited my Portfolio, ENB entered.  So, the number of stocks in my Portfolio remained at 60.

 

Do you own WBA?  If so, what are you planning to do with the stock?  Are you an ENB owner?  If so, tell me how your investment in ENB has gone.  I look forward to your comments!