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Building Income - Selling Apple

Jan. 11, 2021 9:56 AM ETApple Inc. (AAPL)ABBV, GD, LMT, MO, OGE, PNW, VZ, XEL, XOM8 Comments
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Selling Apple (AAPL)

On December 22 I sold 140 shares of AAPL, roughly 10% of what I owned. I sold to balance out my being a little too enthusiastic with tax loss sales earlier in 2020 - I could take profits or carry over a large loss. I decided to take profits.

I chose AAPL as my stock to sell for a combination of 3 reasons. 1) It was my largest position, about 15% of my portfolio 2) It only had a .62% yield and 3) (I suspect this is the most important) its dividend increases in 2019 and 2020 were disappointing to me, particularly for a company with its cash flows.

I won't rehash all of that again. For more details - and links to other articles - see my post from December 24: Trimming Apple and Some Buys.

After buying Lockheed-Martin (LMT) on Monday, January 11, I decided to calculate the impact of the AAPL sale on my dividend income. I thought the result was worth a post.

The Transactions

These are my transactions from December 22 through January 11. Dividends came in during this period and were used for buys but they were only about 20% of what I received for AAPL.

  • 12/22/20 - Sold 140 shares Apple (AAPL) at $132.00
  • 12/22/20 - Bought 35 shares General Dynamics (GD) at $146.50
  • 12/23/20 - Bought 120 shares Altria Group (MO) at $42.78
  • 12/24/20 - Bought 65 shares Pinnacle West (PNW) at $77.00
  • 1/4/21 - Bought 22 shares AbbVie (ABBV) at $106.15
  • 1/4/21 - Bought 20 shares Oklahoma Gas and Electric (OGE) at $31.80
  • 1/4/21 - Bought 40 shares Verizon Wireless (VZ) at $58.98
  • 1/4/21 - Bought 10 shares Excel Energy (XEL) at $66.37
  • 1/4/21 - Bought 24 shares Exxon-Mobil (XOM) at $41.64
  • 1/11/21 - Bought 5 shares LMT at $335.00.

You'll notice some smaller buys in early January. This was because all of the January 4 transactions were in my Roth which both has smaller purchase sizes - I consider about $3500 a full buy in it - due to the overall account size and because my previous OGE, XEL and XOM buys were all after selling RICs I was down on. So I nibbled on them to get to a normal size. Of course now VZ and ABBV are smaller than usual but I'll take care of that as I continue selling Regulated Investment Companies.

Dividend Impact

I think the easiest way to show this is with a table.

Company Shares Sold Shares Bought Annual Dividend per share Income Lost Income Gained
AAPL 140 $.82 $114.80
ABBV 22 $5.20 $114.40
GD 35 $4.40 $154.00
LMT 5 $10.40 $52.00
MO 120 $3.44 $412.80
OGE 20 1.61 $32.20
PNW 65 $3.32 $215.80
VZ 40 $2.51 $100.40
XEL 10 $1.72 $17.20
XOM 24 $3.48 $83.52
Total $114.80 $1,182.32
Net Impact on Income $1,067.52

Some of the cash for the buys came from accrued dividends, maybe 20% of the total. I'm not going to adjust for this but even taking it into account, selling AAPL to buy higher yielding companies had a significant impact on my dividend income.

The average yield of my purchases was 4.94%. I was a little surprised by this. Yes, MO and XOM are very high right now but GD, LMT and XEL were bought near or below 3%.


I'm not going to say that I made a bunch of great buys. I like them but who knows? But I gained nearly 3% in additional annual income and I made progress toward my goal of having enough income to live on - and live well - by January 1, 2023. 

I have no intention of making this a regular strategy. My motivation was the tax situation I created with my earlier transactions, something I will try to avoid in the future. But I'd be lying if I said I was disappointed with the end result. 

Happy Investing Everyone!


Analyst's Disclosure: I am/we are long Everything listed at the end of the post.

I am not a professional investor and do not offer investing advice. I have a college degree in Animal Science and used to train horses for a living. Would you really want to tell a loved one you invested based on something an ex-horse trainer/animal scientist wrote? I didn't think so. Please perform your own due diligence when making investing decisions.

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.

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