Hi, all!  I’ve got a Portfolio transactions update for you.  I’m playing a little catch-up this week and wanted to get this post out before these transactions became too stale.

My transactions started with a sell and a buy of the same Portfolio stock just a few days apart.  I’ll explain why I did this shortly.

I then exited a position that I started trimming a couple of months ago.  I’ve now got one less Healthcare stock to deal with!

Lastly, I entered into a new position.  It’s one that I’ve been contemplating for a while as I wanted to bolster my weighting in the Communication Services sector.  This stock’s recent price dip offered me a decent entry point.

When I was done with all the moves, I’d made a net withdrawal from my Portfolio, and I was down a good chunk of forward dividend income.

Let’s get the details on what transpired with these transactions…

 

Hershey Co. (HSY)

The stock price for HSY had been in a steady decline for about 5 months before a rebound started in the first week of February.  In a little over a month, the price then climbed over 30%.  The climb up was pretty swift for a Consumer Staples stock.

At the tail end of the climb, HSY had eclipsed the price of my most expensive shares.  I figured the price might pull back given its swift run-up, and that if I sold my most expensive shares I might get the opportunity to buy them back at a lower price.  I’d get to lower my cost basis, too.  And what if the stock price continued to rise?  Then I’d look to hold my reduced position for a while and wait for a chance to buy the shares back in the future, still at a lower cost (hopefully).

Well, it didn’t take long for the stock price to drop… it was less than a week and a 4% decline had ensued.  With a chance to get my shares back, I didn’t hesitate, and the ‘arbitrage’ was over.

Had I been a bit more patient, I could have done even better, as the price dropped even further in the following days after I bought the shares back.  However, I didn’t need to optimize the transaction.  I was just happy that it turned out as I had planned, regardless of the magnitude of the gain.

On 3/7/25, I sold my most expensive 20 shares of HSY at $188.85/share, for a total of $3,776.89, after the $0.11 SEC commission.  The stock yielded 2.90% at my sale price, which is slightly higher than my current Portfolio yield of 2.70%.

Then, on 3/11/25, I turned around and bought those 20 HSY shares back at $180.50/share, for a total of $3,610.00.  The stock yielded 3.04% at my purchase price.

My share total ended right back where it started… at 37.735 shares.  My forward dividend income didn’t change either.

What did change was my cost basis.  That dropped by $4.10/share, to $177.02/share.

The sale resulted in a small long-term capital gain of $12.49, too.  I sold the 20 shares I originally bought in January, 2024, so my holding period exceeded 1 year by just a couple of months.

After the sell and buy, my HSY position settled in as the 43rd largest holding in my Portfolio, behind Eastman Chemical (EMN), but ahead of Amdocs Ltd. (DOX).

With HSY shares now trading below $165 (which is a good amount below where I bought them back), I may look to add to my position again and lower my cost basis further.

 

CVS Health (CVS)

I trimmed my CVS position back in January.  At that time (just like HSY had recently done), the stock had run-up, so I sold some shares, at $53.40.  However, in this case I wasn’t looking to buy the shares back.  Instead, I just wanted to exit part of my position and invest that money elsewhere.  I said I hold the remaining shares and see how things go.

Well, the remaining shares continued to climb in price.  Less than 2 months later, the stock has risen nearly $12 per share, to over $65.  This was high enough to net me a small profit on my remaining shares should I sell them.  So, I took the opportunity to exit my position and move on.

On 3/11/25, I sold all 129.234 shares at $65.15/share.  The sale proceeds were $8,419.37 after the $0.23 SEC fee.

At my sale price, shares of CVS yielded 4.08%.  This was more than one and a quarter percentage points higher than my current Portfolio yield.

With this sale, I realized a long-term capital gain of $100.32 and a short-term capital gain of $52.14.  The sale also resulted in a big $343.76 decrease in my annual forward dividend income.  Ouch.

Since my initial purchase back in January 2017 until this final sale, I calculate my annualized return for CVS to be -0.23%.  That’s ugly considering I held the stock for 8 years.  You can probably figure out why I gave up on CVS.

I had an idea for how I’d replace the lost dividend income from the CVS sale.  I was going to invest in a couple of new holdings, but only one of the needed trades got executed shortly thereafter, and that involved this following stock…

 

Alphabet Inc. (GOOG)

This company doesn’t need much of an introduction.  Even though it was only founded in 1998, it’s already grown to be a $2 trillion entity.  Most people know Alphabet for its Google services.  It makes money primarily via its digital advertising on its Google Search and YouTube platforms.  Google Play (where it sells apps and digital content) and Google Cloud (where it provides computing power and data storage) are other businesses under the Alphabet umbrella.

GOOG is basically a Tech player, even though it resides in the Communication Services sector.

My Portfolio was underweight in Communication Services, and this purchase pulled the sector into my preferred weighting range, but not by much.  Still, it’s progress in the direction I want to go.

While GOOG sports a sub-0.5% yield, I expect that to grow over time, as GOOG has lots of cash and the company started its dividend journey with a very low payout ratio.

On 3/11/25, I initiated my GOOG position by purchasing 25 shares at $164.50/share, for a total of $4,112.50.  The stock yielded 0.49% at my purchase price.  This yield is more than 2 percentage points lower than my current Portfolio yield, but the stock does add a nice growth element to my otherwise value-oriented set of Portfolio holdings.

The purchase only added a tiny $20 to my annual forward dividend income.  I bought just after the ex-dividend date (coincidence), so my first GOOG dividend won’t arrive until June.

GOOG entered my Portfolio with a weighting just above my minimum 0.5% threshold.  So that’s nice.  However, like all my stocks, I wish to have its weighting above 1% eventually.  For GOOG, I believe the weighting will get even higher than 1%.  This will not only be the result of share additions over time, but because I expect capital appreciation in the years ahead.

Once I initiated my GOOG position, the stock entered my Portfolio as the 4th smallest position.  It trailed behind NNN REIT (NNN) in my Portfolio rankings, but ahead of FedEx (FDX).

 

At this point, with a new holding, I’d normally take a quick look at its dividend growth history dating back to 2000.

However, the dividend history for GOOG only began last year – its first ever dividend payment came in June, 2024.  Thus, I didn’t feel the need to share a table with minimal entries.

The current earnings payout ratio for GOOG is just 10%, with its free cash flow payout ratio being slightly higher at 14%.  There’s plenty of room to raise the dividend over the years to come.

Simply Safe Dividends started GOOG with a ‘Safe’ dividend safety score (80 out of 99), which is at the top of its ‘Safe’ range.  This suggests that a dividend cut is unlikely.

I expect that GOOG will most likely announce its first-ever dividend raise in April, so I’m looking forward to what that might bring.

I wouldn’t be surprised to see GOOG raise its dividend annually at a 10% clip – although I’d love to see more.  Next month will be our first chance to see if a low double-digit raise percentage has any merit.

 

Summary

My March Portfolio activity didn’t slow down in the 2nd week of the month.  I made four more Portfolio transactions.

The first pair of moves involved just single stock, HSY.  I sold 20 shares that had run-up in a short amount of time, then bought them all back a few days later at a lower price.  I essentially netted myself a little more than $166 dollars in the process.

I then eliminated my CVS position, which hadn’t been providing a return for me despite holding it for years.  Lightening up in the Healthcare sector, where I was overweight, I viewed as a good thing.

Lastly, I introduced a new stock to my Portfolio – GOOG.  I expect this stock should bring some growth to my Portfolio, especially dividend growth.  This addition to my Communication Services holdings brought the sector into my preferred weighting range, too.

All the transactions resulted in a net withdrawal from my Portfolio of $4,473.76.  My forward dividend income plummeted by $323.76, too.  I’ll look to use the remainder of the sales proceeds from exiting CVS to recoup some/all of that lost dividend income.

Combining the two sales, I realized a long-term capital gain of $112.81 and a short-term capital gain of $52.14.  The annualized return for my CVS investment over ~8 years was -0.23%

Since CVS was purged from my Portfolio, but GOOG was added, the number of holdings in my Portfolio still stands at 58.

 

Have you added any of the Magnificent 7 stocks to your Portfolio recently?  Have you elected to eliminate any stocks from your Portfolio in 2025?  I look forward to your comments!