Two Buys, Two New Positions Initiated

Stock buy shopping runI knew I’d be in the market to pick up some more stocks once my tax situation was ironed out. Thanks to aggressive quarterly payments made last year, I ended up getting a refund for the first time in probably 15 years or more.

That refund, combined with some additional income earned beyond what I anticipated a few weeks ago, has put me into a position to go shopping again. I feel a little bit like the kid who got the $100 Toys “R” Us gift card for Christmas and bolted through the front door the next day, ready to blow it all!

Actually I didn’t blow it all, but I have made two recent stock buys that incidentally are both new positions.

This past Monday on March 2, I picked up 35 shares of Southern Company (SO) for $44.73 a share plus the $7 trade commission. The total cost of this transaction was $1,572.55 and it added $73.48 to my 12-month forward dividends.

I purchased SO with a dividend yield pushing 4.7% for a few reasons. First, this electric utilities company has been paying dividends regularly for decades on end and I don’t anticipate that being interrupted anytime soon. Second, I’m very light in the utility sector and wanted to beef it up a little while the sector is getting pulled down as a whole. And finally, after several low yielding purchases earlier this year, I felt it was time to balance the buys out with a slightly higher yielding stock.

Looking ahead, I wouldn’t mind doubling my SO initial position at around $41-$42 a share if it gets that low. In the same sector I am also watching Avista Corp (AVA), which I own 6 shares of and want to build out alongside SO.

This morning the markets took a dive following the employment numbers and further advancing of the U.S. dollar. Several companies I’ve been watching slid, but one in particular I wanted to grab up with its ex-dividend date approaching on March 11 following a slow and steady decline from its 52-week high.

Today I bought 18 shares of Walmart (WMT) for $82.50 a share plus the $7 trade commission. This buy cost me $1,492 and added $35.28 to my 12-month forward dividends.

Walmart is a dividend growth stock I’ve been watching since day one and never pulled the trigger on because something else always interested me more when funds were available, such as Target during its slide a year ago. With Walmart dropping nearly 10 percent off its high around $90 a share and working on 42 years of dividend raises, I felt it was time to get my feet wet despite the relatively low 2.38% yield.

I am aware that Walmart’s most recent dividend raise was a weak two percent from $1.92 a share to $1.96, and I don’t mind one bit. This retailer isn’t going anywhere anytime soon and neither is their dividend. Should the market get rocky in the years ahead I want to make sure I have a solid stable of the steady payers.

From a financial planning perspective, Walmart pays its dividend on the January/April/July/October schedule, my weakest at the moment. I want to eventually achieve better balance among the months for dividend payments so purchases like Walmart fit perfectly into that plan.

Between these two buys I have added nearly $109 to my annual dividends that currently stand at $8,899. That’s about half of what I lost from the massive Ensco (ESV) dividend cut, a topic best saved for another post.

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