Hi all. I’ve got another Portfolio transaction to cover. Just one this time!
Usually, I find myself executing more than one transaction at a time, but in this case, it was just the lone move.
The modest purchase took place late this past week. With it, I continued to build out a relatively small position.
Here are the purchase details…
NextEra Energy (NEE)
When I first initiated my position in NEE three years ago, I bought in hoping to see continued earnings and dividend growth. Thankfully, both of those have occurred.
The stock looked overvalued back then, but it had been trading at lofty valuations for the better part of two years (outside of the early pandemic market dip).
Since my initial buy, the stock valuation has been coming down, especially over the past year, so I started adding to my position at that time.
Over the past year, I’ve added to my NEE position 8 times, including this purchase. My position is growing nicely, even though it still doesn’t hold a 1% weighting in my Portfolio (a minimum level I’d eventually like to see).
NEE has been on my watchlist recently and I was looking to add should the price drop below my previous lowest-priced add of the stock at $56.90. I succeeded in that.
On 2/22/24, I bought 8 shares of NEE at $56.50, for a total of $452.00. The stock was yielding 3.65% at that price (after a 10.16% dividend raise just 6 days earlier). This yield is nearly one percentage point above my current Portfolio yield of 2.69%.
My NEE position grew by 8.71% with this addition, increasing the number of shares I own to 99.862 shares. I expect to top 100 shares when I reinvest my next NEE dividend in March.
The purchase lowered my cost basis almost $1/share, to $67.11/share. It’s going to take a decent stock price recovery before I’m in the green with this position.
My Portfolio’s annual forward dividend income increased by $16.48 with the purchase. My annual NEE dividend income rose to $205.72.
NEE was already my largest Utility holding, but the new buy created a slightly larger gap between it and Pinnacle West Capital (PNW).
With the purchase, NEE was able to climb a couple of spots in my value rankings and is now my 19th smallest position… still in the bottom third of the Portfolio. The stock position is slightly smaller than my Accenture (ACN) one, but a tad bigger than that of Realty Income (O).
With NEE being an existing holding, the number of stocks in my Portfolio remained unchanged at 59.
Summary
After making a couple of Portfolio transactions early in the month, I’ve added one additional move while we remain in February.
I bought 8 shares of NEE, solidifying its position as my largest Utility stock. As a result of the buy, NEE was also able to jump a couple of spots in my value rankings.
With this purchase, my NEE position is now just shy of 100 shares, and I was able to lower the cost basis of my NEE position, too.
This buy resulted in an investment of $452 into my Portfolio. and raised my forward dividend income by $16.48.
NEE earnings growth should continue in the upper single digits over the next few years, with 10% dividend growth also on tap after the company recently updated its dividend policy.
I’ll continue to try and add NEE shares as I can. I hope to purchase more below the $56.50 price I just got, but should it never get there, adding below $60 would be acceptable to me.
What’s your largest Utility holding? What weighting does it hold in your portfolio? Please share in the comments!