Recent Small Buys – March 2020

I recently shared a watchlist of REITs I was following. However, while I was preparing the watchlist and looking into the REITs, they increased in price and I was not comfortable to add at these valuations. In the meanwhile, I did what I usually do when I don’t know what to buy – increasing the smallest portfolio positions.

Just like in the previous months, I added to the same two companies. I almost don’t need to edit the purchases post of the previous month, as it’s so similar 😀

1. Johnson & Johnson (JNJ)

First up is a healthcare giant which is one of the foundation stocks in many portfolios of dividend growth investors.

Shortly about the company from Morningstar:

Johnson & Johnson is the world’s largest and most diverse healthcare company. Three divisions make up the firm: pharmaceutical, medical devices and diagnostics, and consumer. The drug and device groups represent close to 80% of sales and drive the majority of cash flows for the firm. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The device segment focuses on orthopedics, surgery tools, vision care, and a few smaller areas. The last segment of consumer focuses on baby care, beauty, oral care, over-the-counter drugs, and women’s health. Geographically, just over half of total revenue is generated in the United States.

On the 27th of March, I bought 1 share of Johnson & Johnson for $122.70:

These are the company fundamentals based on my purchase price:

  • P/E (TTM): 18.1
  • Forward P/E: 14.89
  • Dividend Yield: 3.10%
  • Payout Ratio: 56%
  • Net Debt/EBITDA: 0.31

This purchase added $3.23 to net forward annual dividend income. I now own 4 shares of Johnson & Johnson and am planning to add more in the future.

This is how my purchase history of JNJ looks like so far:

2. Altria Group (MO)

Once again, I added a few shares of Altria to my portfolio.

Shortly about the company from Morningstar:

Altria comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Ste. Michelle Wine Estates, Nu Mark, and Philip Morris Capital. It holds a 10.2% interest in the world’s largest brewer, Anheuser-Busch InBev. Through its tobacco subsidiaries, Altria holds the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. The company’s Marlboro brand is the leading cigarette brand in the U.S. with a 40% share.

On the 27th of March, I bought 3 shares of Altria Group at $35.20/share for a total of $105.60:

This is how the main ratios of the company looked on my purchase price:

  • P/E (TTM): N/A (Earnings per Share were negative due to a writedown)
  • Forward P/E: 8.27
  • Dividend Yield: 9.54%
  • Payout Ratio: N/A (Earnings per Share were negative)
  • Net Debt/EBITDA: 2.35

This purchase adds $8.56 to my net forward annual dividend income.

I now hold 9 shares of Altria Group. I’m planning to increase the position to put it up to line with my other investments as well.

This is how my purchase history of MO looks like so far:

Summary

In total, those small buys added $11.79 to my forward annual dividend income. I think I will add to both of the companies going forward if nothing changes dramatically. Altria Group is still one of the smallest positions in my portfolio. I will probably keep it at the lower end of my portfolio but would like to add some more. Johnson & Johnson already surpassed a few positions in the portfolio but I would like it to be among the top positions in the long run.

I actually made one more buy at the very end of March. However, it’s a different kind of investment and I would like to share it in a separate post.

Have you been buying anything lately? Are you waiting for the market to bottom? Let me know your thoughts in comments and thanks for reading! 🙂

8 thoughts on “Recent Small Buys – March 2020

    1. I have a gut feeling that this is not the bottom as well. On the other hand, I don’t think I can catch the bottom, so I am just planning to keep investing 🙂

  1. Nice pick ups. Own both looking to buy more too. These days there is no shortage of stocks to choose from as many are trading at much cheaper prices but some still not trading at cheap values. Keep on stacking.

    1. Thanks DivHut! That’s what I’m doing. We definitely cannot complain about the lack of choices in the market lately 🙂

  2. Nice pickups, BI. I favor JNJ more at this point given fewer troubles (before coronavirus) and that rock solid credit rating.
    That said, it was a nice average down on MO, with the latest purchase price so far below your others.
    Keep bumping up the forward dividend income as you can.

    1. Thanks ED! The same here – I preder JNJ more. But I need to make some balance and have some high dividend yielders as well, couldn’t resist the price drop in MO 🙂

  3. Hi BI.
    I have MO in my portfolio, not very satisfied yet and I am thinking about JNJ for a long time, very good purchase. I hope I can take it at a similar price.

    1. Hey Druss,
      JNJ is one of the most favourite stocks among dividend investors. I would like to keep building this position. But I guess we’ll need to wait for the price to go down again.

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