January 2021 Dividend Stock Purchases
Dividend Investing, Dividend Growth Investing, Long-Term Horizon
Seeking Alpha Analyst Since 2013
Hi, my name is Kody. I run Kody's Dividends. As you might guess, this is a blog primarily documenting my journey towards financial independence using dividend growth investing as the means to transform the dream of financial independence into a reality.
I am forever indebted to this community because it helped me transition from simply being an investor to being an analyst for The Motley Fool back in June 2021 under my real name of Kody Kester. As a display of my gratitude, I will still be writing one article a month for SA starting in July 2022.
Summary
- While my capital deployment of just under $900 for the month was lower than what I desired, I was able to advance my net annual forward dividends to another record.
- My 3.68% average weighted net yield added $32.41 in net annual forward dividends and dividend announcements added $2.71 during the month.
- This helped my net annual forward dividends surge from just over $1,363 heading into this month to just under $1,399 to end the month.
- Now that I have all of my credit card debt paid off in time to avoid paying interest, I expect that in the next 3 months, I will deploy well over $5,000 in capital to my dividend portfolio.
The weather here in Central Wisconsin continues to be pleasantly warm, especially for late January as I'm writing this blog post.
The next few days are expected to reach the low 20s Fahrenheit for highs and we have yet to dip below zero factoring in wind chill to this point.
With that aside, I will be discussing my dividend stock purchases during January 2021.
Starting with my retirement account, I deployed $253.77 in gross capital when including my 7% contribution to my Capital Income Builder (CAIBX) position within my retirement account and my employer's 3% matching contribution.
When adjusting for the 3.5% sales charge that CAIBX charged to my account in January, I deployed $244.88 in net capital during January 2021.
As a result of my capital contributions within my retirement account, my CAIBX position increased 3.819 shares from 145.695 to start January to 149.514 at the end of January, which boosted my net annual forwards by $8.17.
Therefore, my average weighted net yield on my CAIBX investments in January worked out to 3.34%.
My first purchase within my taxable accounts was when I added 1 share to my National Retail Properties (NNN) position at a cost of $39.25, which was because NNN is a high quality business trading at fair value despite the surge in price since my previous article on Seeking Alpha a few months ago.
When considering the $2.08 in net annual forward dividends that were added as a result of my purchase, I deployed my capital at a 5.30% net yield.
My next purchase within my taxable accounts was when I added 1 share to my STORE Capital (STOR) position at a cost of $31.00, which I executed because I believe that despite the price runup since my previous article on Seeking Alpha last year, STOR remains fairly valued at this time.
When factoring in the $1.44 in additional net annual forward dividends due to my purchase, I deployed my capital at a 4.65% net yield.
My final purchase during the month of January was when I initiated a 7 share position in American Electric Power (AEP) at an average cost of $80.95 a share.
My reasoning for initiating a position in AEP is that although AEP hasn't fallen quite as much as I indicated I would have liked it to before initiating a position in it is the overall resiliency of the business as outlined in my Seeking Alpha article from last November.
When considering the $20.72 in net annual forward dividends that were added as a result of my purchase, I deployed my capital at an average weighted net yield of 3.66%.
Concluding Thoughts:
Overall, I deployed $881.48 in capital during the month of January 2021, which equates to an average weighted net yield of 3.68% against the $32.41 in net annual forward dividends added as a result of my purchases.
When I also factor in the $2.71 increase in my net annual forward dividends as a result of dividend announcements in January 2021, my net annual forward dividends advanced from just over $1,363 heading into this month to just under $1,399 at the end of this month.
Since I now have $0 in credit card debt and I anticipate no material capital expenditures aside from my usual living expenses in the next 3 months, I am forecasting that I will deploy over $5,000 in capital between now and April.
Discussion:
How was your capital deployment in the month of January 2021?
Did you initiate any new positions in your portfolio as I did with AEP?
As always, I value your readership and look forward to your comments in the comment section below!
Analyst's Disclosure: I am/we are long CAIBX, NNN, STOR, AEP.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.