As I mentioned in my most recent Portfolio Thoughts post, I’m behind on reporting about some of my Portfolio transactions from March.  So, I’m here today with the first of two posts to work towards getting caught up.

All these moves were made on the same day nearly 3 weeks ago.

My transactions started with the elimination of another Healthcare stock from my Portfolio.  Recall that I cut loose CVS Health (CVS) recently, too.  So, I guess one can say… another one bites the dust.

I followed that up by purchasing my second closed-end fund for my Portfolio – in two separate chunks.  The fund consists primarily of Healthcare stocks, so my sector weighting didn’t change too much.

Lastly, I initiated a new position in a stock from the Information Technology sector.  As you probably know, I’m always trying to add there.  The recent Tech stock weakness brought the price down on this stock enough to get me involved.

Once all the transactions were complete, I’d made a net investment of more than $5K in my Portfolio, and added over $380 of forward dividend income.

Here are the details on these transactions from mid last month…

 

Bristol-Myers Squibb (BMY)

I owned BMY for nearly 4 years and its stock price hasn’t really moved higher.  Neither has its earnings.  While the earnings look to rebound this year, they still won’t reach the levels from 2021, 2022 or 2023.

While the yield for BMY is nice, rather than continue to hold BMY and hope for a turnaround, I decided to sell.  I had a plan for diversifying and increasing my yield, as I’ll share shortly.

On 3/13/25, I sold all 108.234 shares at $60.30/share.  The sale proceeds were $6,526.33 after the $0.18 SEC fee.

At my sale price, shares of BMY yielded 4.11%.  This was easily more than a percentage point higher than my Portfolio yield at the time.

With this sale, I realized a long-term capital loss of $394.20 and a short-term capital gain of $46.48.  The sale also resulted in a hefty $268.42 decrease in my annual forward dividend income.  No bueno!

Since my initial purchase back in June 2021 until this final sale, I calculate my annualized return for BMY to be 2.01%.  Not horrible, but certainly less than what I expected when I established my position.

Let’s see how I used my BMY sale proceeds and recouped the lost dividend income…

 

BlackRock Health Sciences Trust (BME)

BME is a closed-end fund (CEF), investing in companies engaged in the health sciences and related industries.  The fund was launched in 2005.

The fund’s objective is to provide total return through a combination of current income & gains, and long-term capital appreciation.  The fund utilizes an option writing (selling) strategy to boost its dividend yield.

BME invests almost exclusively in the Healthcare sector.  It invests in Pharma, Biotech & Life Sciences (~57.7%) and Healthcare Equipment & Services (~41.7%).  Almost 93% of the fund is invested in U.S. equities.  Also, over 92% of the investment is in large-cap companies, with nearly 6% in mid-cap and less than 2% in small-cap.

Distributions are made monthly.

With my retirement on the horizon, transitioning a piece of my Portfolio to this high-distribution fund will enhance the income I use for living expenses.

Exiting BMY and investing in BME provided a decent income boost for my Portfolio, and helped diversify my Healthcare sector holdings.

On 3/13/25, I initiated my BME position by purchasing 110 shares at $38.59/share, for a total of $4,244.90.  The stock yielded 8.15% at my purchase price.  The purchase added $345.97 to my annual forward income.

Later that day, I bought another 90 shares at $38.51/share, for a total of $3,465.90.  The stock yielded 8.17% at this purchase price.  This 2nd purchase added another $283.07 to my annual forward income.

So, all totaled, I bought 200 shares for $7,710.80.  My effective yield was roughly 8.16%, or 5.40 percentage points above my current Portfolio yield of 2.76%.  The combined forward income boost was $629.04.

My first monthly distribution payment from BME ($52.42) was delivered at the end of March, as I bought my shares just before the ex-dividend date.

 

BME has a net asset value (NAV) volatility that is low for equity CEFs (Volatility is measured as the standard deviation of monthly NAV returns over the last decade.)

The fund does not use leverage to help magnify investment gains, as its leverage ratio is 0%… classified as very low for equity CEFs.

Currently, BME has a yield that is more than 2 percentage points higher than its 5-year average of 5.99%.  However, that is primarily due to the fund raising its distribution significantly late in 2024.  The fund also trades at a 7% discount to its NAV.  Its 5-year average is 0% (no premium or discount).  This suggests that BME may currently be undervalued.

Compared to other equity CEFs, BME has an average 10-year total return record, roughly 4.9%.  However, it has lagged other CEFs in the shorter term.

The volatility of BME over the past 10 years is very low… lower than 84% of equity CEFs.  The fund’s expense ratio of 1.10% is also on the low side for equity CEFs.

BME has been assigned a ‘Borderline Safe’ dividend safety score (60 out of 99) from Simply Safe Dividends.

Currently, BME is my 39th largest Portfolio holding (which is comprised of 57 stocks and 2 CEFs).  It’s just smaller than my Enbridge (ENB) position, and comfortably ahead of one of my other new holdings, Intuit (INTU).

 

At this point, for new Portfolio holdings, I normally take a quick look at the dividend growth history dating back to 2000.

However, given that CEFs don’t raise their distributions on a regular basis, I figured I’d forego the table.  I will say that their last raise (23.05%) was in November 2024, as noted earlier.  Previous to that was a raise in October 2021 (6.5%).  Prior to that, it was a 21.21% hike in August 2015.  I will say that raises from BME appear to be more frequent than ones provided by my other CEF, DNP Select Income Fund (DNP).

 

Salesforce (CRM)

CRM is a mega-cap Information Technology company involved in the application software industry.  It was only founded in 1999, yet it already boasts a $260 billion market capitalization.

The company is best known for its customer relationship management (CRM) platform, which helps businesses track sales, manage customer support, and run marketing campaigns.  The platform enables companies to store customer data, forecast opportunities, and deliver personalized experiences.  You may know CRM for some of the tools it offers, like Tableau (analytics), Slack (team collaboration), and MuleSoft (connecting systems).  CRM has become a key partner for companies of all sizes by focusing on improving their customer relationships and streamlining their business operations.

My Portfolio is always notoriously underweight in the Information Technology sector, so adding CRM moves my Tech sector holdings closer to my preferred weighting range.

Like Alphabet (GOOG), which I purchased recently, CRM has a small yield… about 0.6%.  However, my yield-on-cost should rise over time.  The stock has a low earnings payout ratio, which should lead to some solid dividend growth, assuming the company continues to grow.

On 3/13/25, I initiated my CRM position by purchasing 15 shares at $272.00/share, for a total of $4,080.00.  The stock yielded 0.59% at my purchase price.  This yield is more than 2 percentage points lower than my current Portfolio yield.  However, by accepting the lower yield, I do expect some decent capital appreciation and above-average dividend growth.  We’ll see.

The purchase added a very modest $24 to my annual forward dividend income.  My first CRM dividend will arrive in April.

CRM currently has a Portfolio weighting around my absolute minimum 0.5%.  I expect to grow this to no less than 1% over time, or else eliminate the position.  The growth in the size of my position will most likely be the result of a combination of share additions over time and capital appreciation.  If it ends up being solely due to the latter, that’s great!

When I established my CRM position, the stock was my 4th smallest position.  Today, it’s slipped to my 3rd smallest.  Its position is barely smaller than FedEx (FDX), and marginally larger than that of Flowers Foods (FLO).

 

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 CRM only began last year – its first ever dividend payment was in April, 2024.  Thus, I didn’t see the need for a big table with basically one entry.

The current earnings payout ratio for CRM is just 16%, with its free cash flow payout ratio being even lower at 12%.  There’s room to raise in the years to come, no question about that.

Simply Safe Dividends started CRM 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.

This past week, CRM announced its very first dividend raise.  It was only a 5% boost, translating into an extra $1.20 of forward dividend income.  Frankly, I was expecting more, but I’ll take what I can get.  I’m hoping that CRM can raise its dividend annually at a 10% rate, at least for the next few years.

 

Summary

March trading activity within my dividend Portfolio remained elevated.  I made another four Portfolio transactions, consisting of one sale and three buys, involving three stocks/funds.

First, I eliminated BMY from my Portfolio.  The stock just didn’t meet my performance expectations.  So, I sold all my shares and invested elsewhere, diversifying my holdings and adding some additional income in the process.  Here’s how…

I followed up the sale with two buys of the second close-end fund I’ve introduced to my Portfolio.  I initiated a position in BME.  This kept my investment in the Healthcare sector, and juiced my Portfolio yield at the same time.

Lastly, I added CRM in the Information Technology sector, a sector where I’m always looking to add capital and increase my weighting.  While the yield for CRM is small, its dividend growth should be good and the stock should bring an additional growth element to my value-based Portfolio.

All the transactions resulted in a net investment into my Portfolio of $5,264.47.  My forward dividend income jumped by $384.62 as a result.  This is an effective yield of 7.31%.

With the lone sale of BMY, I realized long-term capital loss of $394.20 and a short-term capital gain of $46.48.  The annualized return for my BMY investment over nearly 4 years was 2.01%.

Since BMY was eliminated from my Portfolio, but BME and CRM were added, the number of holdings in my Portfolio grew by one, and now stands at 59.

 

Is BMY a holding of yours?  If so, what are you doing with the stock?  Do you own any CEFs (such as BME) in your portfolio?  Have you added any mega-cap tech stocks (like CRM) to your portfolio in 2025?  I look forward to your comments!