Two Purchases for January 2016 (Amgen and 3M)
During the month, I made another purchase of Amgen (AMGN). It seemed to be a good time to buy and it starts me on the way to expanding the number of holdings in the healthcare sector. I discuss my original September purchase in this article, and my January purchase was made for the same basic reasons, though at a slightly higher price.
On 01/11/16, I purchased AMGN at $144.50 and 2.77% yield. AMGN was brought up to 2.79% NAV weight and 1.89% dividend weight. I want to cap this stock’s allocation at about 3%, so I don’t have room to add much more. Should the price drop significantly, I will consider one more purchase.
My second purchase for the month, and one I have wanted for some time, was 3M Company (MMM). On 1/20/16, I made an initial purchase of MMM at $137 and a 3% current yield. This is a yield level not often seen with this stock. It now has about a 2% NAV weight and 1.5% dividend income weight. Ideally, I want to build this holding to represent a 6-8% NAV weight, so this purchase equates to a 1/3 position.
MMM at $137 seems to be a fair value in my view. It is a dividend beast and buying at fair value is good enough for me. The purchase was made for the sake of dividend dependability with some growth thrown in for good measure.
S&P rated MMM a hold with a target price of $160. Quality is A+ and the credit rating is AA-. Morningstar rated it a 4 star buy with a fair value of $160. I don’t expect great things from this company by way of capital appreciation, nor will I be in a great hurry to add more. Acquiring more of this stock at any kind of bargain price may well require a significant market correction. If that happens, I’ll be waiting with open arms. I’m about the income and MMM makes me feel warm and fuzzy.
Year over year dividend comparison for January 2016
- Dividend income for January was a mere 3.52% above last year’s monthly total.
- Not a very impressive increase, I know. Of the stocks that pay out in January, not many offered up much in the way of increases last year. I also noted that one of my larger income producers (and one of the few that I bought in 2015) (VTR) paid out in January of last year, but the most recent payout came in December 2015 rather than January of this year. This made my paltry increases look even more paltry.
Stock Sales For January 2016
Dividend Increases for January 2016 ( I love pay raises)
- AT&T (T) bumped up their dividend by 2.1%, ex-div 1/6/16. Pretty standard fare for AT&T. Nice yield with slow growth. No complaints.
- Realty Income (O) added a 3.92% increase, ex-div 1/29/16. Another slow div grower with a nice yield. Again, can’t complain.
2016 YTD forward dividend income (through January)
- Stock purchases have added 2.06% to our dividend income
- Dividend increases have added .27% to our dividend income
- Overall, our YTD forward dividend income increase is 2.33%.
Best wishes and happy investing!