Sometimes the market gives us better buying opportunities when we least expect it. Though the market in general has been trading at or near all time highs for some time, there are still dozens of great individual buys trading at much better levels when compared to just a few months ago. We all know the names as they have been popping up in our ‘buy posts’ in recent weeks. Stocks like General Mills, Inc. (GIS), Hormel Foods Corporation (HRL), V.F. Corporation (VFC), QUALCOMM Incorporated (QCOM) among others. Of course, when the market decides to take a nosedive, as we have witnessed this week, even better buying opportunities can present themselves in many quality companies. With that being said:
I have added to my taxable account 3.0 shares at $173.87 for a total investment of $521.61 in W.W. Grainger, Inc. (GWW). With this recent purchase my taxable account holdings in GWW now totals 14.5577 shares with a market value of $2,522.85. This was a free trade and my second GWW purchase this month.
I have added to my taxable account 18.0 shares at $27.22 for a total investment of $489.96 in General Electric Company (GE). With this recent purchase my taxable account holdings in GE now totals 184.6093 shares with a market value of $5,073.06. This was a free trade.
In total, I put $1,011.57 of fresh capital to work with this second tranche of buys in May. While GE was not in my May stock considerations post, seeing it continue to slide to current levels was too hard for me to ignore. In fact both GWW and GE are starting to trade at the higher end of their historic yields as are the other names I mentioned above. I’ll gladly continue to nibble on stocks that are trading at or near their historic yields, especially if the dividend is perceived to be safe. While not a rule, it often signifies temporary near term headwinds a company is facing that should subside over time.
What do you think about my recent purchases? Have you been buying these same names after their big price drop? Please let me know below.
Disclosure: Long GIS, HRL, VFC, GWW, GE
How are you getting all these free trades? Thanks!
SE,
if you have 25k in cash+assets Merill Edge allows for 30 free monthly trade with a BOA and ME account.
If you’re starting out Robinhood is a great website for free trades
https://www.robinhood.com/
Hi tbdi,
It’s amazing how many free and cheap platforms exist these days when compared to how stock trading was one or two decades ago.
I know keith. It’s crazy that we can buy partial shares and less than one hundred shares at a time. Reading about how they used to trade in the 60s-70s boggle my mind. Unless you were rich or had a large sum of money, you had to use mutual funds because trading costs were too high
Hi tbdi,
Forget the 60s and 70s. I remember going to a “discount” broker with my first stock trade in the late 80s and paying close to $50 a trade. Regular brokerages used to charge $200 – $300 a trade. Now that’s insane. It’s amazing how technology really enabled the masses to afford investing. These days there are no excuses to not invest.
Hi SE,
I use Capital One Investing, formerly Sharebuilder, to trade. My account was experiencing technical issues for about four weeks with the way reporting was done and to keep me a happy customer I was given about two dozen free trades among my accounts (brokerage, ROTH & IRA) I hold. This is not the norm but I will gladly use them up for small dollar amount trades.
I bought shares of GE this week too, 32 shares. Not on my watchlist, but a position I’ve been trying to increase lately.
Investment Hunting recently posted…April Dividend and Options Income
Hi IH,
GE is name that I had my eye on at around $30 but never really considered it for a buy. Seeing it close to $27 was too hard for me to ignore as that yield started to climb up to juicer levels. It’s not my absolute favorite stock but at these levels I’m willing to nibble. Thank you for stopping by and commenting.
Hut –
Great purchases across the board. I saddled up a few more shares of GWW as well, will post soon on it. Congrats on the new additions to your income stream!
-Lanny
Dividend Diplomats recently posted…Finding the Right Mortgage
Hi DD,
Glad you like these recent buys. GWW has been making the rounds among our peers as of late for good reason. It’s trading at much better values these days and seeing a yield close to 3% is definitely on the historical high side. Thank you for commenting.
Nice! Great job growing the snowball at every chance. Those free buys sure help to make it even more worthwhile too! Have a great weekend.
Jay
Jay recently posted…How Much Money Can You Make From Trend Following?
Hi Jay,
You said it. I invest every single month as my cash allows which usually means buys in the range of $500 to $3,000 for a given month. Adding to that growing snowball is my primary goal and when I see a stock offering up historically high yields I’ll take a nibble. As always, I appreciate your comment.
Nive buys. GWW is one i need to get into. Not sure if i am going to buy it as my next buy. Deciding between CVS or GWW
FiscalVoyage recently posted…Recent Buy
Hi FV,
These days there are no shortages of some really great names trading at much better values and yields. GWW has certainly been popular as of late. That stock has really slid and is offering up a historically high yield. I never looked at CVS myself. Curious to see where you will invest. Thank you for stopping by and commenting.
Keith, GWW looking good at the moment. I’m not a big fan of GE because of the board. Good luck with your investments!
Hi tbdi,
It’s been a long, long time since I added to my GE and I hear you about not being a fan of the stock. Sometimes a stock reaches a certain level that makes it hard to ignore and that’s why I nibbled a bit on GE here. Thank you for commenting.
Those are some great additions again! Really like how you always add small parts to your portfolio, and keep it growing consistently.
Hi Divnomics,
Consistency is one of the key elements to being a long term dividend growth investor. Typically my buys are larger but with those free trades sitting in my account I am able to make these smaller buys from time to time. Thank you for commenting.
Nice ! Dollar-cost-average your way to wealth. Well done.
-Brian
Brian recently posted…April Dividends 2017 are here !
Hi Brian,
That’s how it’s done. Sometimes I dollar cost average up and sometimes down but the end result is usually the same… more dividends coming my way. Thank you for stopping by and commenting.
nice grabs, I never heard of grainger before i think u bought it the first time. Now i have heard a ad or 2 on the radio for them.
keep stacking those stocks.
passivecanadianincome recently posted…Recent Purchase
Hi passivecanadianincome,
This isn’t my first buy of GWW. While it’s not a common name I buy it has become too tempting to ignore in recent weeks, especially with a yield that was approaching a historical high. The stacking will continue 🙂 As always, I appreciate your comment.
Great buys!
I think Grainger is great right now. Long term they are still positioned well even with thinner margins. Such a good business
GE is almost begging me to buy it. It also isn’t my favorite stock but at these levels it is such enticing. I am holding off for now and really letting cash build in my accounts for some big purchases.
Thanks for sharing as always!
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Hi SSDD,
GWW has been around for a long time and has adapted to changing business and economic climates quite well. While GWW will never be a large portion of my overall portfolio I felt comfortable nibbling on the stock at these levels. GE, while not on my May shopping list also was too hard to ignore at current levels. I fully admit that the company and stock have their fair share of near term headwinds to address but in the long run I think they will be just fine. Thank you for sharing your thoughts.
Hi DH,
nice purchases GE is an interesting one. This wasn’t really on my radar so far…
DivIncome recently posted…High Yield vs. Low Yield Dividend stocks
Hi DI,
I don’t think many of us considered GE in recent months but when the stock started dipping below $30 I think it started getting some attention. Of course, seeing it slide to around $27 was my trigger to nibble a bit. Thank you for stopping by and commenting.
I bought GE a little early — I might just have to add some shares to reduce my cost basis a little!
Thanks for sharing and all the best with your investments.
FerdiS recently posted…Recent Transfers: INTC
Hi FerdiS,
We are all in the DGI game for the long haul. Buying GE or any other stock a point or two or three higher should not matter over the span of a decade or two. I always like to reduce cost when given the chance and keep all my dividends reinvesting automatically. Do that and reduce your GE cost. Thank you for commenting.
Both stocks on my watchlist, and i am also very keen on adding GE to the portfolio.
Great stock for future income
Stockles recently posted…How I´m Building a Portfolio from Scratch
Hi Stockles,
Seems like last week was a great time to nibble on some stocks after the markets turned very negative. Both GE and GWW should make nice additions to a long term dividend growth portfolio. It can be tough to buy a stock that has a strong negative sentiment but that’s often the best time to pick up some shares. As always, I appreciate your comment.
GWW has a nice and still very safe yield after the sell off. I think it’s a really good timed buy. I’m actually more worried about GE. Sure, it’s a big name, but I’m not that comfortable about that high payout ratio. Let’s hope they will manage to increase EPS in a short term.
Roadrunner recently posted…May 2017 Investment Ideas
Hi Roadrunner,
Seeing GWW at the higher end of its historic yield helped me pull the trigger with this recent buy. Regarding GE, I totally understand where you are coming from. I’ll fully admit that its yield is not sitting on the most stable ground but think it will be fine long term and picking up some shares at around $27 was worth the risk for me. I already held GE through one dividend cut during the financial crisis. Maybe I’m a little jaded to a potential cut with that name. Thank you for sharing your thoughts.
I missed out on GE. Had no cash 🙁
Hi dividendgeek,
I wouldn’t ever say that you “missed out” on any stock. Given enough time there will always be another “good” time to buy. Thank you for stopping by and commenting.
Thanks!
Question: This was a free trade ==> How so? Where are you getting these free trades?
Hi dividendgeek,
There was an issue a while back with my Sharebuilder account so to keep me “happy” they credited each of my accounts ten trades. The trades have a shelf life so I’ll gladly use them up to nibble on stocks in the meantime.
DHut,
I have had GE since I first started with dividend growth investing. At this point I have already recouped 11% of my investment purely through dividends.
GWW is a nice looking stock. The main risks I see are with their competitors (MSA, MMM, FAST) and not Amazon. Still they have weathered a massive construction downturn starting on ’08 to ’10. I think they are a great long term holding, and the dividend is looking real good.
– Gremlin
Dividend Gremlin recently posted…April Review / May Preview 2017
Hi DG,
Like you, GE has been one of my first stocks I bought since I went the DGI route. Isn’t it amazing how dividends can essentially make a long term hold become “free” given enough time. I think that’s a great calculation to share with our fellow DGI peers… finding out the percentage recouped from a stock purchase simply from dividends.
Buying any stock comes with its own risk reward profile and while GWW has had its fair share of negative sentiment recently, I was OK with the risk of buying at $173.87. GWW has its share of competitors but all eyes are seemingly on AMZN. Thank you for sharing your thoughts.
Nice buys. I wouldn’t mind adding more to my GE as well. I was surprised to see you not picking up more GIS. That is always on your watch list i know. Unless you are just trying to re-balance your allocations a little bit.
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Hi DD,
I’m still watching GIS but have eased off that stock for now since it has climbed from my latest buys. Believe me, should I see GIS fall to around $55 there is a good chance I’ll be adding some more. In the meantime it was GE that came to the forefront ever since it fell below $30. Seeing that yield jump to well over 3% enticed me to nibble. As always, I appreciate your comment.
You have utilized the opportunities of buying these GWW and GE stocks at discounted rates and made a great step. Similarly I hope you would get the expected returns for those stocks.
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Hi Durga,
Whenever I see a great stock go on sale I tend to jump in and buy more. Of course, having those free trades enabled me to make smaller purchases this time around. I’ll continue to watch GWW and GE going forward. Thank you for commenting.
Nice timing on GWW. I feel like if the infrastructure improvements that Trump promised to deliver in the US would benefit GWW, DE, CAT and other heavy equipment companies.
Man, superb timing on picking up GE, GE was included in the $200B deal with Saudi Arabia. So, longterm it should help GE.
Cheers!
Hi vivivanne,
Many of the industrial names have been doing well in recent months. CAT and DE have really jumped while ITW, MMM and even DOV continue to look strong. I just got lucky with these buys in the near term. You know what they say about timing. Regardless of what happens I have a feeling I’ll be a happy shareholder five or ten years down the line. For me it’s all about those dividends continuing to come in. As always, I appreciate your comment.
I haven’t really considered the companies you recently added Div Hut, although GE was some consideration of mine. As much as how it’s difficult for me personally, I think it’s important to sometimes keep cash on hand so that you can take advantage of price declines or dips in the market like you have.
Hi DP,
Both GE and GWW have been making the rounds among our investing peers recently because of their stock price declines and juicier yields they are offering. While I am fully invested, I always have some cash to invest every single month (via monthly savings) so I’ll be able to take advantage of those near term price swoons. Believe me, sometimes I wish I had more cash to invest but for now my goal is to have a minimum of $500 to invest every month. Thank you for stopping by and commenting.
From 2015 to early this year I purchased equipment and supplies for a government entity. Grainger was always on the ball when it came to purchase quote requests and often won the bids.
The government has strict rules of what and who they can purchase supplies from, and Amazon isn’t on it.
If I had to guess, out of all the companies trying to sell to the government, I purchased about 40% from Grainger. Which equaled a lot! Multiply that by thousands of other government offices and they are surely raking in some huge government sales.
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Hi MDD,
Thanks for sharing that real world account of your GWW experiences. I agree that the AMZN threat is overblown, at least in the near term. GWW still has a loyal customer base and while it’s trimming prices to remain competitive with AMZN and the like, it’s also boosting it’s online offerings and shifting sales towards a more digital world. For now, it seems that GWW, like WMT and others, are pivoting towards the digital realm in a big way. Thank you for commenting.
Right now I’m sitting on 100% cash and waiting for a small correction before I buy stocks again.
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Hi MH,
You are definitely not alone in sitting in all or mostly cash. Since September of last year I have read that quite a few of our investing peers have been liquidating some or all their portfolios in anticipation of a correction. For me, as long as those dividends keep rolling in, I’ll stay fully invested. Thank you for stopping by and commenting.