Recent Stock Purchase July 2016

What a crazy financial year it’s been. If you recall, 2016 got off to its worst start ever for the financial markets. All the headlines were proclaiming, “It’s the end.” The start of a new bear market was upon us and the major market averages all took steep dives. Fast forward a few months and spring time all of a sudden looked rosier once again. Oil prices, in lock with the general market rose from their January and February lows. Suddenly, things weren’t all doom and gloom. Of course, this merry feeling didn’t last long as the Brexit vote took EVERYONE, and I mean everyone by surprise. What good are all those financial news outlets and “experts” when they all missed such a big call. Of course, in the following days we saw another sharp sell off in the market only to bring us to a mid-summer all time record high. You just have to love the fickle nature of the market.

 

The point of this half year recap is simply to reinforce that no one knows, nor can predict the future. The markets can continue their climb going into 2017 just as easily as we can see a 10% or more decline during the same time period. All we can really do is continue to add fresh capital into our diversified dividend paying portfolios and stay focused on the higher quality names without chasing fantasy yields. That being said, I’m happy to be able to add, admittedly a small amount, to my existing dividend portfolio at this time. Sticking to my July stock considerations list:

 

I have added to my taxable account 1.0000 share at $218.06 for a total investment of $218.06 in W.W. Grainger, Inc. (GWW). With this recent purchase my taxable account holdings in GWW now totals 6.4571 shares for a value of $1,410.04.

 

Though not a household name among many dividend growth portfolios, GWW does have a stellar record of annual dividend raises going back over four decades and a ten year annualized dividend growth rate of 17.4%. I have held this name in my portfolio for many years but have not added to the position in a while. With this new purchase I plan to start “leveling” my dividend income a bit so as to not become too reliant on just a handful of companies for my passive income flow.

 

What do you think about my recent buy? Do you own or have you considered GWW for your dividend portfolio? Please let me know below.

 

Disclosure: Long GWW

30 thoughts on “Recent Stock Purchase July 2016

  1. I feel that its not as unknown as financial advisors and/or the media would like us to think.
    There are two totally free and public indicators called the zweig breadth thrust ratio (below .375) and the $nahlr below (.01) which both gave a buy signal mid january of this year. I have compiled 18 years of this data in a spreadsheet and every time it was a good time to buy, the reports were as you said, gloom and doom, more downside ahead.
    Time and again, they were wrong

    • Hi Steve,

      It’s funny how the doom and gloom reports get all the media attention as it’s more sensationalized and gets more viewers and interest than the Zweig Breadth Thrust Ratio and NYHLR/NAHLR Ratio which, as you mentioned both indicated buy signals in mid January. I already accept that the talking heads and financial media are more for entertainment and excitement rather than actual number based reporting. Too often the “experts” miss making the correct calls. I appreciate your comment.

    • Hi DM,

      Thank you for the compliment. It’s much appreciated. Hope you check back regularly as I update my real world dividend portfolio. Nice to see GWW on your consideration list. I’m not sure why it’s not more popular among our fellow dividend bloggers. Thank you for sharing your thoughts.

    • Hi DD,

      Believe me, I had to think long and hard before even pulling the trigger on this small buy. Your take on “don’t see anything out there!!!” is well received. This has been the most challenging environment in a long, long time when deciding where to deploy fresh capital. Still, I’m happy to be able to continue my years long streak of making at least one buy every month no matter what. I can take solace in the fact that my consistent buying will pay off in the long run. Thank you for commenting.

  2. Their history is really impressive and that 45 year history is very impressive considering the very strong dividend growth. It really is funny how much air time all of these analysts/pundits/talking heads get when they’re wrong more often than they’re right. Everyone needs to sit back and think about this for a second: if they really knew for sure what was going to happen why would they go and tell everyone about it?
    JC recently posted…Weekly Roundup – July 30, 2016My Profile

    • Hi JC,

      There’s no questioning the solid performance and dividend growth history of GWW. I still like the stock a lot going forward and think they will be able to continue raising their dividend for many years to come. You bring up an interesting point about the “experts” we see and read about. If anyone truly found a magic formula/equation for trading/investing there is zero chance it would be shared publicly. Instead, we are offered financial opinions some of which are correct and some which are incorrect. Bottom line, do you own research and really ignore everyone else out there. As always, I appreciate your comment.

  3. GWW is a pretty nice company to buy and hold.

    I strongly agree with you that noone knows what will happen in the future. I am surprised about pretty much anything – Brexit, the weakness in Jan – Feb etc. I have found that many investors make moves due to short-term events, but tell themselves some story instead. This is why buying and holding is really difficult because of all the noise and conflicting egos, but ultimately is the best way for the ordinary investor to avoid silly behavior. Your third commenter has done a lot of the latter 😉
    Dividend Growth Investor recently posted…Four Attractively Valued Dividend Growth Stocks For Further ResearchMy Profile

    • Hi DGI,

      The plan is to keep GWW for the foreseeable future. It’s been a great long term hold for me so far and as long as that dividend remains safe with room for annual growth it will stay in my portfolio. Regarding the ‘financial noise’ that’s out there I guess one has to really remain focused on their own investment objectives and really tune all that sensationalism out. I know it’s easier said than done but it’s still a requirement for any long term investor and avoid those buy high sell low mistakes. Thank you for commenting.

    • Hi IH,

      The buying has definitely slowed down among our dividend blogging community but it hasn’t totally stopped. I find it refreshing to see buys continuing to be made even while the market continues to tread record territories. GWW is a name that is worth considering for any long term dividend growth portfolio. It’s a very solid name sporting a safe dividend with room to grow. As always, I appreciate your comment.

    • Hi FV,

      GWW has been one of the first stocks I bought as a dividend growth investor and has been a solid performer for me all these years. It’s about as close as I want to get to a “retail” type stock. Thank you for stopping by and commenting.

    • Hi DfS,

      Even among many U.S. investors GWW is a name that is not too familiar so it’s OK you never heard of this one especially being a European investor. It’s really tough finding a good place to deploy fresh capital these days but at least I am able to make some small purchase each month. Thank you for commenting.

  4. DH, I can see that this would be a very long-term play. Since it’s a distribution company, I don’t think it will ever go out of business especially because they distribute maintenance supplies, which everyone needs and won’t ever go away. It looks like a good income producing company and I might do my due diligence on it too. I also agree that you can’t predict the market, what you do know is what will happen in the long term in America, go up. Let the bull market rage on!
    Finance Solver recently posted…How I Saved $75 with One Phone CallMy Profile

    • Hi FS,

      GWW is indeed intended to be a long term hold for me. It’s been a great performer since I bought a small stake in it back in 2007 and based on it’s current value and yield is a decent pick up at current levels. As I commented to others, I’m happy to be able to continue my streak of monthly investments both large and small and remain consistent in building up my passive income stream no matter where the market is. Thank you for sharing your thoughts.

    • Hi DDU,

      You said it. Fluctuations or volatility usually translates to opportunities. Too often it’s easy to get caught up in all the negative news and think the world is coming to an end. While GWW may not be familiar to you, know that is has a stellar and long history of dividend raises as well as capital appreciation. Thank you for stopping by and commenting.

    • Hi DFG,

      A one share closer is better than nothing 🙂 I will continue to put cash to work each month with big or small trades as my budget and the market allows. I have dozens of free trades credited to my account and figure I might as well use them for these small purchases. If I had to pay a commission I’d never buy just one share. Thank you for commenting.

  5. I admit I am also a little stymied by the right course of action to take at the current time. I think as you’ve done here, to keep contributing, even a smaller amount makes sense. As for Grainger, I don’t really know much about industrial distributors but I will certainly look into it as part of my research!

    • Hi DT,

      I think every dividend investor is feeling stymied these days as finding suitable places to invest our fresh capital is really becoming more difficult as the market continues to march ever higher. Still, there are always places to find relative good value and like my recent buy shows even a small purchase moves the dividend snowball too. Take a closer look at GWW. I think you will find it’s a solid performer in its respective sector. Thank you for sharing your thoughts.

  6. Thanks for the share DivHut,

    I have not heard of this company so I got some homework to do. I am not sure what to currently do in the current market but I have found a handful of stocks that are not trading at their highs like many other stocks that I would like to put money into. Right now the market is crazy and I have no idea where it may be headed nor does the million people trying to predict where it will so hopefully we get an indication soon!
    Stefan @ Mllnnlbudget recently posted…How To Find Your Retirement NumberMy Profile

    • Hi Stefan,

      You are not alone about not being sure what to do in this current market. The way oil prices have been falling I have a feeling the market will follow suit. The market went down with oil and rebounded with oil though I’m not sure why there is such a strong correlation. After all, it’s all a guess. As I posted above, no one knows what will happen. Not me, you or any “expert” we see on TV either. All you can do is find the one company or two that looks relatively attractive to you and nibble. As I commented to others you should take a look at GWW. It has a great dividend history and has room for future growth too. I would prefer it to be lower than at current levels but I’ll take what I can in these high market conditions. Thank you for commenting.

    • Hi DG,

      I have had a good run with GWW for many years and figured I could nibble on another share even though prices are not exactly where I’d like them to be. From a valuation perspective it’s not considered expensive and the yield is decent. These days it’s tough finding a good place for fresh capital. I’m happy I was able to continue my monthly streak of buying something. Our time in Seattle is going great. Soon we’ll be heading back. I can’t believe how fast the time is going by. Good luck with your new job. As always, I appreciate the comment.

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