It looks like the volatility in the market is back. Concerns over durability of trade talks between China and and the US, together with dimming outlook for the global economy sent the markets down during the last week. We will see if this is the beginning of a serious trouble or just another temporary dip. I decided to keep my strategy simple and keep investing when I have some capital, despite the frightening headlines in media.
Financial sector was one of the biggest losers last week and I was thinking for a while now to purchase some shares of a company in this sector. Several names were in my radar – Prudential Financial (PRU), Toronto Dominion (TD), Bank of Nova Scotia (BNS), BlackRock (BLK). I decided to go with the latter one, despite it having the lowest dividend yield from the list. What I liked about this company was the streak of dividend raises, fairly modest payout ratio and small debt to equity ratio.
Brief description about the company:
BlackRock, Inc. (BlackRock), incorporated on February 13, 2006, is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. The Company’s products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles.
I guess most of us heard about iShares ETFs, so it feels good to own a piece of company which is behind it.
On the 7th of December, I bought 3 shares of BLK for $400/share + $7 commissions for a total of $1207.00:
Some facts about the company at my purchase price:
- Dividend yield: 3.13%;
- Payout ratio: 45.10%;
- Dividend raise streak: 9 years;
- P/E (TTM): 11.46;
- Debt to Equity ratio: 0.16.
It turns out that I could have got it for a better price if I waited more, as the price decreased to ~$393 at the end of the day. On the other hand, it was at $408 at one point during the day as well, so I got it somewhere in the middle and $400 was my target price for this company for a couple of months now.
This purchase will increase my projected annual dividend income (PADI) by $31.92 ($12.52 * 3 – 15% tax).
It also highlights another milestone for my portfolio. My stocks portfolio has finally surpassed €10k, just barely. After the small fall yesterday, my stocks portfolio stands at €10070.52 so it’s not certain that it will stay above this mark in the future but I treat it as a big accomplishment 🙂
What do you think about this purchase? Do you have BlackRock in your portfolio? Do you think I should have waited more for the price to decline? I would love to read your thoughts!