Shortly after the calendar turned to June, I added shares to a couple of stocks I already own, continuing to build my Portfolio. The month is off to a fast start!
One stock I bought lives in the Consumer Staples sector, while the other is part of the Financials sector. My Portfolio is a bit overweight in each of those two sectors, more so in Financials. Thus, I didn’t do my Portfolio any favors with regard to sector weighting.
Over the past several months, I’ve been focused on adding to many of my smaller holdings. I did the same with one of these two purchases, but the other buy was for a stock in my Top 10. Adding to my largest holdings isn’t something I normally do, but in this case I did.
I can tell you that I invested more than $1K total in the two stocks, and that my investment in one of the two stocks was more than double my investment in the other. You’ll have to read on to find out which stock garnered the most investment capital.
The yield for the overall investment came up short of reaching my current Portfolio yield, but not by much. The two buys added a double-digit amount to my forward dividend income.
Here are the details for my most recent Portfolio transactions…
McCormick & Co. (MKC)
At the time of my latest purchase, MKC was my smallest holding, competing with The Walt Disney Co. (DIS) in an attempt to avoid the dubious honor.
MKC has seemingly traded at a premium since the middle of 2018. However, its slow trend downward since late 2020 has brought the stock into fair value territory for me. Thus, it felt like a decent time to add some shares, especially since it’s a position I want to grow and it’s a position that needs to be bigger in order for its performance to have an effect on my Portfolio overall.
My previous two additions in late 2023 were at slightly lower prices, but the stock’s valuation at that time was a bit higher than now due to lower earnings back then.
This position has been a slow build. This latest buy was my 4th add since establishing my position back in Sept. 2022.
On 6/4/24, I bought 5 shares of MKC at $68.896/share, for a total of $344.48. The stock yielded 2.44% at my purchase price, which is 0.26 percentage points lower than my overall Portfolio yield of 2.70%.
The purchase resulted in my share total increasing by 11.84%, and my MKC position has grown to become 47.236 shares. The purchase added a modest $8.40 to my annual forward dividend income.
With the addition, my MKC cost basis fell by a paltry $0.54/share to settle at $73.47/share. This is one of my few Portfolio positions (less than 10) in which I am underwater.
Since the addition was small, MKC only moved up one spot in my value rankings, surpassing the aforementioned DIS. Next up on the list of stocks for MKC to try and pass is FedEx (FDX).
I plan to keep adding more MKC shares. Initially, I’ll look for a price below where I just added, but a price south of $66.80 would be my lowest yet.
BlackRock (BLK)
BLK is already in the Top 10 of my Portfolio stocks, and I don’t usually add to my Top 10 stocks as they are already relatively large positions. Yet, something was calling to me to add here.
Maybe it was absence of transaction activity with the stock. The last time I bought BLK was back in October of 2018… over 5 1/2 years ago.
With such a big share price, even though I reinvest the dividends and BLK has a decent yield, my share count doesn’t grow too quickly. Adding would juice my share count a bit, for sure.
It’s certainly not the current valuation that was drawing me to BLK, as that looks fair at best. In fact, this would be my most expensive purchase of BLK shares in terms of valuation. This addition wasn’t big though, so I wasn’t worried so much about valuation.
What I do like is the analyst’s near-term forecast for earnings over the next two calendar years. Consensus has settled around the 14%-15% area. That kind of growth should allow the share price to move up, and keep the strong dividend growth (over 3-yr, 5-yr & 10-yr periods) from fading.
Whatever it was, the buy got executed, and now my BLK position is just a wee bit larger.
On 6/6/24, I bought just a single share of BLK at the lucky price of $777. The stock yielded 2.63% at my purchase price… only 0.07 percentage points beneath my overall Portfolio yield.
The single-share purchase boosted my BLK share total by 3.72%. I now own 27.881 shares of the company. The purchase added a solid $20.40 to my annual forward dividend income.
As a bonus, I bought my share the day before the ex-dividend date, so I should see some extra income with the dividend being paid later this month.
Sadly, my BLK cost basis climbed by a significant $14.14/share, and now sits at $397.03/share.
Despite the addition, BLK didn’t move within my Top 10. It was my 9th largest position before my purchase, and it remained so afterward. The stock is currently situated between Lowe’s Companies (LOW) and Fastenal (FAST) in my value rankings.
With BLK now an even larger position in my Portfolio, I don’t see adding to BLK anytime soon… unless of course it goes on sale. I’d call it a sale price around $650.
Summary
A couple of Portfolio transactions are already in the books for me this June.
Both transactions were purchases, with one of the stocks getting more than 2x the investment compared to the other. I made a minor add to my smallest holding (MKC) and a larger addition to one of my Top 10 stocks (BLK). Both stocks seem fairly valued to me at current levels.
The two buys totaled an investment of $1,121.48 into my Portfolio. My annual forward dividend income rose by a decent $28.80 as well.
My cost basis in MKC dropped just slightly, but my one in BLK jumped a decent amount.
With both MKC & BLK already being a part of my Portfolio, the number of stocks in my Portfolio remained at 57.
Do you have any portfolio stocks that you haven’t purchased in years, but wish to add to now? What’s stopping you from making the addition? I look forward to your comments!