Hello!  I’ve returned with another post to outline my first Portfolio transactions of February.  This is fairly impressive considering I didn’t get around to posting about January’s moves until last week.

This time around I only have a pair of transactions to account for (as opposed to six from last time).  Thus, this will end up being an easier read.

The two moves involved a sale, followed by a purchase.  The sale eliminated another Utility stock from my Portfolio.  Recall that I purged OGE Energy (OGE) from my Portfolio last month.  I then took the sale proceeds, and a little cash, and bolstered the position I had in one of my Energy stocks.

With the two moves I was able to reduce my somewhat overweight Utilities sector position and enhance my somewhat underweight Energy sector position.  A little more balance is a good thing.

The result of the transactions was a small net investment into my Portfolio, and a solid increase in my forward dividend income given the size of the net investment.

So, let’s see those details for my latest Portfolio transactions…

 

Pinnacle West Capital (PNW)

At the onset of the pandemic, PNW’s stock price took a nosedive, like many other stocks.  However, PNW hasn’t really recovered.  Some unfavorable rate-related news from regulators in late 2021 didn’t help the stock either.

However, I made some timely purchases of PNW in 2021 and 2022, and I’ve since benefited from some capital appreciation.  The gains have led to a current stock price for PNW that looks to have resulted in overvaluation.  Dividend growth for PNW has been limited, too, as PNW’s earnings payout ratio has climbed to a point where it’s edging high for utilities.  So, I decided to move on from PNW and look for a better alternative.  I didn’t mind lightening up in my Utilities sector either since I was leaning overweight there.

On 2/3/25, I sold all 67.854 shares at $85.50/share.  The sale proceeds were $5,801.36 after the $0.16 SEC fee.

At my sale price, shares of PNW yielded 4.19%, which dipped below PNW’s 5-year average yield of 4.39%.  Still, this yield was over 1.5 percentage points above my current Portfolio yield.

With this sale, I realized a long-term capital gain of $1,169.13 and a short-term capital gain of $13.65.  The sale also resulted in a significant $242.92 reduction in annual forward dividend income.

Since my initial PNW purchase back in February 2021 until this final sale, I calculate my annualized return for PNW to be 13.81%.  This was very similar to the return I realized for OGE Energy (OGE) when I sold out of that stock last month.  Once again, that’s a nice annual return for a Utility stock.

I’d buy PNW again, but would need to see a better valuation before doing so.  I’d like to see the return of better dividend growth as well.

So, what did I do with the PNW sale proceeds?  Well, I grew a fairly new position of mine in the Energy sector…

 

Chevron (CVX)

I established my CVX position in September of last year.  The stock was trading in the low $140s then.  The stock has been up and down since, but mostly traded above my purchase price.

While certainly not as inexpensive as a few months ago, I still found CVX to be trading at a reasonable valuation earlier this month.  Also, given that my Portfolio is a bit light in its Energy sector weighting, adding some CVX felt like a good move for me.

On 2/3/25, I bought 40 shares of CVX at $149.25/share, for a total of $5,970.00.  The stock yielded 4.58% at my purchase price, which tops my current Portfolio yield by about 2 percentage points.  This yield is also 0.39 percentage points greater than the yield for PNW.

My CVX share total rose significantly, more than doubling with this purchase.  It now stands at 65.257 shares.  My annual forward dividend income rose by $273.60 with the buy.  This more than made up for the dividend income I lost in the PNW sale.

Additionally, this purchase resulted in my cost basis rising by a noticeable $4.82/share, to $146.20/share.

CVX leaped up 27 spots in my Portfolio rankings due to my addition.  It went from my 2nd smallest holding to my 27th largest position, sneaking into the top half of my Portfolio.  In my Portfolio rankings, CVX currently sits between Nike (NKE) and Quest Diagnostics (DGX).

CVX is now my largest Energy stock, too, surpassing Enbridge (ENB).  For now, I’m good with the size of my CVX position, but I could see adding more should I be able to acquire the shares below $140.

 

Summary

I made my first transactions for the month of February in its first week.  I basically moved some money out of the Utilities sector and into the Energy sector.

The sale I made resulted in Pinnacle West Capital (PNW) being eliminated from my Portfolio.  I used the sale proceeds to grow my Chevron (CVX) position, making it a much more substantial part of my Portfolio.

The transactions resulted in a slight net investment into my Portfolio of $168.64.  I also realized a boost to my forward dividend income of $30.68.

With the PNW sale, I recorded a long-term capital gain of $1,169.13 and a short-term capital gain of $13.65.  I wrapped up my PNW investment with an annualized return of 13.81% over the nearly 4 years I was invested.

With PNW being eliminated from my Portfolio, the number of holdings in my Portfolio was reduced by one to 57.

 

Do you own PNW or CVX?  What do you think of their current valuations?  Would you have made the same stock switch, or might you prefer a different stock be involved?  I look forward to your comments!