Dividend Growth Stocks

Money in the Trough – Averaging Down

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Over the last few days, I received some new dividend income increases by way of a couple purchases. No limit orders, just good old fashioned averaging down, buy it now and move on.

Now that I’m using Interactive Brokers for my taxable brokerage account, I’m able to make smaller purchases as my trading costs have been greatly reduced. You can check out my Interactive Brokers review here if you’re thinking of adding a new taxable account.

I’ll keep these brief as there are a few.

Averaging Down
I purchased Union Pacific (Ticker Symbol: UNP):
Purchase Date: 8/5/15
Company: Union Pacific – (UNP)
Buy price: $95.17
Shares bought: 8
Yield: 2.33%

This $761.36 Union Pacific purchase adds $17.59 of annual dividend income to the portfolio! I already have 15 shares of UNP and this purchase brings me up to 23 shares. Union Pacific has been punished recently as a result of bad quarter and then further raked over the coals with all this coal hoopla. A portion (roughly 15%) of UNP business is moving coal, and volume was down last quarter. New coal legislation seeks to limit power-plant carbon dioxide emissions by 2030. My take on this is simple, coal isn’t going anywhere, volume will increase and I suspect we’ll start hearing more about carbon dioxide capture, utilization and storage (CCUS) being implemented.

 

Averaging Down Some More
I purchased Exxon Mobil (Ticker Symbol: XOM):
Purchase Date: 7/31/15
Company: Exxon Mobil – (XOM)
Buy price: $79.17
Shares bought: 5
Yield: 3.69%

This $395.85 Exxon Mobil purchase adds $14.60 of annual dividend income to the portfolio! I already have 25 shares of XOM and this purchase brings me up to 30. As we all know, crude oil prices are still declining and poor earnings by the majors are finally being reported. Oil is down, but certainly not out. My take is we’ll probably see falling prices for a bit longer but oil in the $40s isn’t the new norm. We are only one natural disaster or sadly, one war away from a big crude spike.

 

Averaging Down Again
I purchased 3M (Ticker Symbol: MMM):
Purchase Date: 7/27/15
Company: 3M – (MMM)
Buy price: $148.60
Shares bought: 2
Yield: 2.75%

This $297.21 3M purchase will add $8.17 of annual dividend income to the portfolio! This was one of the purchases I made while testing out IB. I already have a 9 shares of MMM and this purchase brings me up to 11 shares. I’m a big fan of 3M, and will continue to average down when applicable.

 

New Company To The Portfolio
I purchased Kinder Morgan (Ticker Symbol: KMI):
Purchase Date: 7/31/15
Company: Kinder Morgan – (KMI)
Buy price: $34.78
Shares bought: 8
Yield: 5.64%

This $278.24 Kinder Morgan purchase will add $15.68 of annual dividend income! This small purchase was made as kind of a test. I like Kinder Morgan’s business. They move a gigantic portion of our natural gas, and are the fourth largest energy company in the USA. However, they have a pants load of debt. So I thought I would buy a couple of shares, watch and do more research on them. Looks like I decided to start my test a little early though 🙁

So, all of these purchases summed up to $1,732.66 and added $56.04 in additional annual dividend income. Not bad. The total trading costs for these four purchases was $4.  One buck a trade is awesome!

These four purchases lowers my overall weighted dividend portfolio yield to 3.63% and the total number of positions in the dividend portfolio grows to 25.

 

Have you been averaging down on your oil positions?

I'm a dividend growth investor who is aiming to retire early in 6 years at the age of 45. My goal is to live off the income my dividend portfolio and rental property produce exclusively and leave the corporate rat race. I hope you will join me in this journey!

2 Comments

  1. All great buys! I am making a lot of the same moves. I purchased KMI a couple of days ago and I’m probably going to average down on my UNP and XOM positions at some point this month. Keep it going!

    Ken

    • Blake

      Hi Ken,

      For me, the trick is to remember all of these investments are long term plays and short term price movements don’t matter!

      Thanks for stopping by & commenting!

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