Recent Stock Purchase June 2016

Here we are, approaching the end of June in about a week, and with that half of 2016 will be in the books. I know, I know… where does the time go? Just experiencing the weeks and months fly by always reminds me to do what I have always been doing… continually invest, at least once a month, in high quality dividend growth stocks. After all, time is the one commodity that is truly finite and we must take advantage of as much compounding and dividend growth by having our money work for us “in the market” and not sit on the sidelines. Of course, the challenge of putting our money to work these days is trying to find the best values and yields when the market and most stocks seem priced on the higher end of the spectrum. Being a dividend growth investor, though, I am less concerned about current price and look more at current yield, dividend growth and dividend sustainability aka payout ratios based on current cash flows. With that being said, let’s that a look at my recent June stock purchase:

 

I have added to my taxable account 13.3206 shares at $60.06 for a total investment of $800.00 in AbbVie Inc. (ABBV). With this recent purchase my taxable account holdings in ABBV now totals 105.3284 shares for a value of $6,318.65.

 

With a current generous yield of 3.80% and a moderate payout ratio of 47.8% and a relatively low PE of 18.0 which is well below other pharmaceutical dividend stocks like MRK, PFE, NVS, AZN and the like, ABBV offers a decent risk/reward at current levels. Of course, I realize that the pharmaceutical sector is more volatile than others I traditionally like such as the consumer staples, but it does fill a need in my portfolio as I am also looking to increase my health sector allocations.

 

What do you think about my recent buy? Is ABBV or another stock on your June watch list? Please let me know below.

 

Disclosure: Long ABBV

32 thoughts on “Recent Stock Purchase June 2016

  1. It seems like a reasonable idea DivHut, especially since the Consumer Staples sector is so dramatically overpriced. A little volatility provides price swings in pharma, which could work in the favor of the long term shareholder. I say, good work! I hope your week is starting off well

    -Bryan
    Income Surfer recently posted…Beach Escape WeekendMy Profile

    • Hi IS,

      I have been seeing a lot of ABT buys among our fellow DGI bloggers in recent days and it has been a name I mentioned in my June stock considerations list, but I decided to go with the ABT spin off, ABBV, instead. The current yield and relatively safe dividend won me over for this recent buy. I still may make another purchase before the month is over and ABT may make the cut 🙂 Thank you for sharing your thoughts.

    • Hi Tawcan,

      ABBV entered my portfolio via the ABT spin off and I’m happy to own both companies in my portfolio. My longer term aim is to add additional health sector exposure and balance my portfolio a bit more. As it stands, AFL is my single largest holding and my consumer staples make up the majority of my portfolio. By adding a little more health sector exposure I am able to balance my portfolio holdings. Between the good yield and safe dividend it was a good stock to nibble on. As always, I appreciate your comment.

    • Hi FV,

      At least you are fully deployed and don’t have any cash just sitting on the sidelines. I know many of the DGI bloggers like putting their money to work and AAPL is not a bad place to put it to work. Thank you for sharing.

    • Hi DG,

      ABT is another name I am considering this month among others. I went with ABBV at this time because of its current yield and decent value. In general I am looking to increase my health sector holdings long term as it’s still a smaller part of my overall portfolio. Thank you for stopping by and commenting.

    • Hi easydividend,

      Thanks for that vote of confidence. While this stock does have a nice current yield along with the ability to continue to pay and raise its dividend, it also comes with more volatility. The pharmaceutical sector is well known for its wide price gyrations because of patent issues, FDA approvals and the need for a continual new drug pipeline but I think every portfolio needs some exposure in this space. Thank you for sharing your thoughts.

    • Hi SAD,

      Both are great long term names to hold in any dividend growth portfolio. ABT was my actual pick for a June consideration but I decided to go with ABBV instead. Price, value and yield all swayed me towards ABBV. Thank you for stopping by and commenting.

  2. Nice pickup DH. I have seen a lot of DGI investors either purchase this stock or have it on their watch list. I am torn between ABBV or ABT. Honestly I think I will be picking them both up soon as I want Healthcare to be a sizeable chunk of my portfolio. Right now ABBV is a better buy and their constant dividend, low payout ratio, and pipeline (always hopeful) should bode well for the future. I expect to jump in this stock very soon.
    Stefan @Mllnnlbudget recently posted…Beating Ageism: Getting Cheaper Car Insurance For MillennialsMy Profile

    • Hi Stefan,

      ABT and its spin off ABBV are both pretty much staples in many long term dividend growth portfolios which is why you see it a lot. As you already know, investing in health is a good long term bet especially if you stick with the solid dividend payers like ABT, ABBV, JNJ, BDX, BCR and more. While ABBV may have a higher volatility than its parent ABT, it still can offer a good sustainable and rising dividend. Thank you for commenting.

    • Hi R2R,

      The race continues with my monthly buys. Health and pharma are always good long term bets especially if you stick with the solid players and not chase the speculative names in the space. Both GILD and AMGN are on my watch list but I have yet to add either to my portfolio. Now with this whole Brexit nonsense these days it looks like we’ll get some of those coveted buying opportunities. As always, I appreciate your comment.

    • Hi BSR,

      I have GILD and AMGN on my watch list for some time but have yet to pull the trigger on either. I’m sticking with ABBV at this time as my inheritance from the ABT spin off. Bit by bit, I’ll slowly build up my position in the health sector. Thank you for stopping by and commenting.

  3. I’ve been meaning to look into Abbvie although admittedly I liked them a lot more before the company was split in two. The health care space should continue to boom forward over the coming decades. If the sector was left to its own devices then it’s a no doubter for investment and in my eyes the biggest risk would be government regulation or capping of profits to try and reign in health care spending. Looks solid though and keep up the great work.
    JC @ Passive-Income-Pursuit recently posted…Dividend Growth Investing at Work – Healthy Customers, Healthy DividendsMy Profile

    • Hi JC,

      There is always risk of government regulation with any industry or sector. Look what happened to coal. I realize that ABBV is more volatile than other traditional health companies as it has to always come up with a new drug in the pipeline, deal with FDA regulations, patent expirations as well as the regular headaches of just running a business. However, at these levels I like the value and yield it presents. I plan to hold this name long term along with my ABT too. Thank you sharing your thoughts.

    • Hi DD,

      I also like the long term prospects of ABBV and its parent ABT. Of course, days like today don’t really mean much when looking ten years out or more. For me, it’s all about a sustained and ideally growing annual dividend to make me happy. As always, I appreciate your comment.

    • Hi DL,

      The good value and yield ultimately swayed me to make this small purchase. The last few months I have been nibbling on stocks as prices remained high all around. After this Brexit mess we may be getting some better buying opportunities this summer. As always, I appreciate your comment.

    • Hi BII,

      Well technically the record for dividend payment increases came from ABT so I also am not sure if you can call ABBV a true aristocrat though it comes from a good lineage. Thank you for commenting.

  4. HI DivhHut,

    I just pulled the trigger on beaten down GILD today. And my first foray into pharma..just as it would happen before announcement of their FDA approval for Epclusa today.

    ABBV is interesting – I will take a look but I was concerned about their Humira exclusivity loss.

    Thanks for stopping by before 🙂

    • Hi DT,

      Nice pick up with GILD. I have that name on my watch list for a long time along with AMGN. Those are the only other two pharma plays I’d consider for my long term portfolio. ABBV has been a great performer thus far in my portfolio. I inherited that stock from my ABT shares after a spin off was completed a few years back. I plan to keep both my ABT and ABBV long term. Thank you for sharing your recent buy.

  5. Nice purchase, DivHut. I have considered adding ABT and ABBV to my portfolio as well, although I probably need to do a little more research on both companies. Before the spin-off, I was very certain I wanted to own ABT. After the spin-off, I’ve hesitated a little to pull the trigger on either of the two stocks. In any case, I think you made a good investment at a nice valuation. Keep up the great work!

    • Hi ACI,

      I invested in ABT originally as I like the company as a whole. Of course, after the spin off I kept both ABT and ABBV and plan to for the foreseeable future. Both companies serve as a respective niche within the health sector which I am trying to boost my overall allocation. Glad to hear you like this recent pick up. The Brexit panic really gave us a couple days of some good buying opportunities. Thank you for stopping by and commenting.

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