Recent Stock Purchase II June 2018

The last time I made two buy tranches in any one month was back in February of this year. I guess seeing the market continue on its volatile trajectory prompted me to make additional buys before June officially expires. On another note, my broker Sharebuilder, formerly ING, formerly CapitalOne Investing, has been acquired by E-Trade and before the assets are moved over later this year it was announced that all dividend reinvestment will be suspended along with ShareBuilder Investment Plans in July. Starting next month my portfolio, for the first time, will be generating actual cash instead of automatic dividend reinvestment. I can live with that for a month or two till the transition is made but it will definitely have some impact on my compounding returns. Oh well, not the worst thing in the world. One thing that I am not happy about is losing my ShareBuilder Investment Plan commission rate of $2 a trade. This was a legacy commission rate given to all Costco/Sharebuilder members and was a great way nibble on positions at minimal cost. The plan going forward will be to maintain status quo and be transitioned to E-Trade. Whether or not I will remain with them remains to be seen. Of course, any broker suggestions would be welcome in the comments section. With that being said, let’s take a look at my second round of June buys:

 

I have added to my taxable account 9 shares at $53.62 for a total investment of $482.58 in Cardinal Health, Inc. (CAH). With this recent purchase my taxable account holdings in CAH now totals 51.7437 shares with a market value of $2,760.01.

 

I have added to my taxable account 5 shares at $99.89 for a total investment of $499.45 in Kimberly-Clark Corporation (KMB). With this recent purchase my taxable account holdings in KMB now totals 57.2068 shares with a market value of $5,942.64. I also hold 7.5504 shares with a market value of $784.34 in my ROTH account.

 

I’m sure these two recent buys will be more popular that my last buy of GIS. What do you think about my recent buys? Are CAH or KMB on your radar too? Please let me know below.

 

Disclosure: Long CAH, KMB, GIS

32 thoughts on “Recent Stock Purchase II June 2018

    • Hi Stockles,

      You guessed it. Classic fundamentals are my go to metrics along with dividend histories too. It’s part art part science to say the least.

  1. Nice purchases, divhut! Especially KMB is a stock which is still on my high conviction list. I like the fact you split the $1.000 in two purchases. Just recently, I decided to buy more stocks of one company when I have some cash to invest. Building a position goes faster and the transnation fees are lower (1 transaction instead of 2). But, by doing this you could miss other nice opportunities.

    • Hi dividendcompounder,

      Seems like a lot of people like the KMB buy especially at prices around $100. Sometimes you see a quality name drop in price and you feel compelled to take advantage of the better pricing, value and yield. With CAH it was more about averaging down my purchase price. Thank you for stopping by and commenting.

  2. Hi DH –
    Good recap. I have looked at these names before but have not considered buying recently.

    On the brokage front, I’ve been using Robinhood for about 2 years now. It’s free but basic. Another newer brokerage I’m reviewing further is M1 Finance. Also free right now, M1 seems to have some additional functionality vs. Robinhood. – Mike
    Mike at Balanced Dividends recently posted…Balanced Dividends (Shopping) Update: T and Me (Part 2)My Profile

    • Hi BD,

      Both KMB and CAH have been faltering as of late. I felt compelled to nibble a bit on each position and take advantage of better prices and yields. M1 looks like an interesting broker that would serve me closely to what I have now but it just doesn’t have that long of a history to compel me to make that switch. Thank you for your suggestions.

    • Hi DD,

      Looks like you picked some good companies to add. Love CLX a lot for the long haul and KMB too for that matter. CLX and CL too, are both companies that you never hear about yet continue to appreciate while growing their dividends decade in and decade out. Nice!

  3. Keith,
    These are both solid moves in my mind. I am a bit biased, and think KMB is the best of your recent 3 moves as I am long there. GIS and CAH are nice, and since you aim to hold for a long run they will do just fine. So you were right, people will probably like these moves better than GIS, but they will still all shower you with cash.
    – Gremlin

    • Hi DG,

      Every stock I buy I plan to hold for the long haul which is why GIS and CAH are still with me despite looking quite ugly in recent weeks and months. I agree that KMB is most likely the strongest of my three buys especially in the near term. In the meantime, I’ll hold, collect those dividends, reinvest and watch that passive income continue to grow.

  4. DH,

    $2 is certainly a great trade price. For a long time I have wondered how you could buy small positions profitably. What is your plan now? E-trade charges about $6. per trade and I don’t see how you can come out ahead? Very Interested in your comment.

    • Hi K,

      Many of my trades were $2 and some were free. The tell would be the amount I buy. If I bought $800 or more in stock I paid $2 commission. If I bought under $800 my trades were free. Going forward I plan to stick with the move to E-Trade and shop around to see if I can get better rates elsewhere. With E-Trade I’ll have to buy larger amounts to keep my commission rates reasonable.

    • Hi Passivecanadianincome,

      GIS is still hanging in there. Of course, time will tell if it will become a great turnaround story or not. Regarding my broker, I never did mind any of the acquisitions because my rates/plans were always grandfathered. Now, it seems that the move to E-Trade will have me playing by the E-Trade rule book (fees) which does not excite me. In the coming months I’ll know what I’m doing much better.

  5. Nice, back to back buys. Adding some good dividend income this month. I like both buys. CAH has been hit hard lately but seems to be starting to rebound. KMB is always quality and is on sale now. I was debating starting a position with them but no capital. So they will sit on my watch list until I see another opportunity.

    • Hi DD,

      As I mentioned, it’s been a while since I made two separate buys in a month but sometimes you see certain stocks trading at much better prices, values and yields that you have to take action. Both KMB and CAH are planned to be long term holds. I wonder if there might be some merger talk in the space to better take on AMZN. Maybe an MCK/ABC/CAH alliance of sorts? Who knows. Thank you for commenting.

  6. I’ve been thinking about adding KMB to my portfolio too just to get another staple in there. The valuation seems good enough and the yield is enticing but the growth rate is a bit low. It’s still a solid growth rate especially since the yield is good. I’ll have to take a closer look at KMB once I get some time. Great to see you always adding some to your portfolio that’s one thing I can’t wait to start doing again.
    JC recently posted…Option Recap – May 2018My Profile

    • Hi JC,

      KMB is not a get rich quick stock, that’s for sure. While its dividend growth rate might slow going forward you are still getting a solid, sustainable juicy yield while you wait. Of course, the key is picking up some shares when the prices are low enough to warrant an out sized yield.

  7. I bought KMB back in May and have contemplated adding a little more at these prices, and despite looking at CAH a few times I haven’t made the decision to add them to my portfolio.

    In terms of broker, I used to be with Scottrade which became part of TD Ameritrade. I wasn’t a big fan of their interface so I moved over to Fidelity and received 300 free trades. I know quite a few former Scottrade customers moved to Schwab as they were offering free trades for the number of years you were with Scottrade–I’m still exploring that to see if that offer is still available. They may offer something similar here, so might be worth checking out.

    • Hi DD,

      CAH still might be an interesting pick if you have a long term horizon. No doubt AMZN fears are taking the stock and whole sector down. Thanks for sharing your suggestion about brokers too. I think I may just stay with the move for now and go to E-Trade. I can always change brokers in the future. The Schwab deal is still in effect. I called them up last week and was told the offer is still valid. Here is the link https://www.schwab.com/public/schwab/nn/tradeoffer.html

  8. DH,

    I like that KMB purchase and this stock a new position I’ve initiated this year. I’ve added to it a couple of times since as the value remains compelling. With respect to CAH, I’ve avoided the stock for now, but may consider adding it to my portfolio as it looks attractive in the high $40s or lower despite the razor thin margins that have made me shy away in the past. The FCF yield on recent market CAP of $15.2B nearly makes me salivate.

    • Hi PIV,

      KMB seems like a solid choice at around the $100 level. CAH, of course, is a different story. Seeing it beaten down so much does make it look more attractive but its business model might continue to come under more stress as those razor thin margins continue to compress. In general, I’m not against a good business with razor thin margins. I’ve heard the razor thin margin argument before with regard to KR and ADM to name a couple. Both seem to know how to operate in that environment pretty well.

  9. Hey DivHut,

    I was in a similar situation as you. As you know, I also had Capital One Investing. I didn’t want my funds to be transferred to E-trade because of the loss of the Advantage Plan which I was one. So, I transferred all my funds to M1 Finance. I’m actually in the process of transferring funds right now. Basically, all the whole shares have transferred, but the fractional shares were liquidated and I’m waiting for them to be transferred as well. The fractional shares total about $800 so I’m not too worried about them, but can’t wait to be done with the whole process.

    I will do a complete review of M1 Finance sometime in July. I’m waiting for the transfer process to be complete, but I like what I see so far.

    Interestingly, I did a test run with M1 Finance earlier with this year with two stocks, MCD and KMB. So, of course I’m going to be a bit biased in support of your KMB purchase. I should be receiving dividends in June, so I’m waiting to see how I can tell if I received dividends and what the amount is. It’s not the easiest thing to do in M1 Finance, but once I figure it out, I’m sure I’ll get used to it.

    I follow the DGI strategy and am invested for the long term. In my opinion, M1 Finance gives you all the benefits of Capital One Investing and more. Plus, it’s completely free. My only concern with M1 Finance is that I don’t know how sustainable it is, but I suppose that’s the same thing with Robinhood that I also have, but don’t use as much because of the lack of a DRIP, etc.

    Good luck with whatever you decide.
    Dividend Portfolio recently posted…Credit Score DownMy Profile

    • Hi DP,

      Thanks for sharing your opinion about switching brokers. Frankly, I never heard of M1 Finance till I read about it on your blog. Sustainability is a concern. I remember how fondly people spoke of Loyal 3 back in the day only to see them fold. For now, the plan is to remain status quo and go ahead with the E-Trade move. In time, if I’m really dissatisfied I can always look elsewhere. In the meantime, I’ll keep posting my buys and slowly add to my beaten down stocks and keep it business as usual.

    • Hi DS,

      I think both should do well over the long haul. As you know many staples have been hammered in 2018 and CAH is constantly under the AMZN threat which could potentially give us good buying opportunities for some time. We’ll see.

  10. Hey DivHut,
    I added some CAH shortly after the news of the Amazon acquisition of PillPack led to a price tumble of CAH into the upper $40s. CAH has really been hammered down over the past year. These next couple of earnings reports for CAH ought to be interesting.
    Engineering Dividends recently posted…Recent Buy – CAH (#2)My Profile

    • Hi ED,

      Looks like you picked a great time to add some CAH on the AMZN dip. I agree that it will be interesting to see how CAH performs going forward. We may look back at this time and wish we’d bought more CAH as the AMZN threat seems to be overblown. Of course, time will tell.

  11. Hi Divhut,

    Haven’t been on your site in a while (been busy with a baby recently) but great purchases as always! I was also eyeing KMB as well and plan to add eventually. The consumer staples have been taking a beating lately and caught my attention! Keep up the good work!

    • Hi DL,

      I totally understand the busy with baby scene 🙂 Wasn’t that long ago I had the same experience. The staples have bounced back a bit from their recent lows but a few are still in the dumps if you want to take a chance, like GIS for example. Thanks for stopping by.

  12. I own both CAH and KMB. I haven’t much looked at CAH recently, I did buy some KMB stocks this year. The valuation seems nice to add to the position. Good stuff DH!

    • Hi MR,

      KMB was faltering a bit earlier as was CAH which is why I decided to add more to my holdings. Of course, many are scared of the AMZN threat to CAH which is why it took a nice fall. I’m willing to buy and hold these names for now and add on the dips. Thanks for commenting.

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