Tuesday, February 14, 2017

Two More Recent Buys

For a moment I got to step into the future of what life may be like in a 2-3 years when my childcare costs begin to disappear. I spent the second half of my mom's generous present and made two more buys:

1. 4 shares of DUK@ $311.32 or $77.83 per share.

2. 4 shares of ABBV@ $243 or $60.75 per share.

I was excited to add some diversification to my portfolio. I have not had not bought any utilities and I feel like it will add some stability and yield. I chose Duke Energy because it has a 10 year history of raising dividends and a solid yield of 4.38%. The payout ratio of 72.9% leads me to believe there is still room to grow its dividend. Duke Energy is the second largest utility in the United States and currently sports a 4 star rating from MorningStar. This coupled with the fact that it is 11 percent of it's 52 week high, leads me to believe there is some room for growth. The debt to asset ratio of 1.1 is not bad for a utility. Electricity doesn't seem to be going anytime soon so I'm happy with this buy. I don't think I'm going to go nuts with utilities in the near future. But in a market where there isn't a lot of value I will take it.

As for my ABBV buy it was all about the discount. The pharmacy industry has been down and I've been nibbling. I've grabbed a share of both AMGN and JNJ not that long ago. What I got with ABBV was a little more bang for the buck in terms of yield. I read that Abbvie has 10 late stage clinical trials and many of them have the potential to be major earners. The payout ratio of 46.6%  for a dividend yield of 4.2% was exciting. The dividend has been growing quickly over the past three years as well with a growth rate of 12.8%. Hopefully this trend will continue.

It was nice to go on that mini spending spree. Now it's time to go back to grinding it out each month. But they say slow and steady wins the race.


12 comments:

  1. Good buys I just bought Duke today post will be up soon

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  2. Nice buys, what are your commissions when you buy? Mine are high so I can't buy very often.

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  3. Thanks for the comment. I've been using the Robinhood app. So I have been commission free. Otherwise I couldn't be buying as often.

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  4. Like both companies also and been adding, I started with Robinhood also and I'm moving to Merrill Edge, I been hearing too many horror stories around RH in the past few months people been on hold for 3 hours, email response is at least a week later. Once you get to over $50k, you get 30 free trades there a month also. Another option is Interactive Brokers which can be around $0.35/trade.

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    1. Thanks for sharing. I think I will move my holdings at some point as well. But right now my portfolio is small and free trades are working. I kind of figured that customer service would be the price of free trades. I am curious though... Have you been able to transfer your holdings out of RH or did you have to sell?

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  5. Nice pick ups. ABBV is one of my larger positions and I also started looking at DUK not long ago. I recently went with two other utilities, D and SO. Thanks for sharing. Nice yield too!

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    1. Keith, thanks for the feedback as always. You definitely influenced me to start looking at utilities. I really enjoy your blog. It has definitely one of the blogs that has helped my learning curve.Thanks for doing what you do.
      DS

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  6. Congrats on the purchases! I don't own either stock individually but I hold DUK indirectly via a mutual fund since it's high-yield. The only utility I own directly now is LNT.
    Best wishes,
    -DL

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    1. DL,
      You have a great mix of stocks and funds. I love your approach. I'm letting Betterment manage my funds for the time being. Once I accumulate more wealth I think I may look at investing directly with Vanguard.

      DS

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  7. I am a huge fan of Duke Energy. I have been eyeing this one for awhile and I am getting close to pulling the trigger. Great buy and I'm sure it will treat you well, especially based on it's dividend history.

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    1. MSM thanks for stopping by. I really liked DUK as well. Almost grabbed a little more.

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