Recent Stock Purchase – May 2015

With the market continuing on its general upward trajectory it has become clear that finding those great stock deals are becoming more and more elusive. Sure, there are some financial or industrial names that stand out but for the most part nothing really compelling is hitting home.

 

It’s no surprise then that the chatter among many of the dividend bloggers has shifted to focus attention towards REITs. Of course, this is for good reason as bond yields and Fed interest rate ‘noise’ continues to flood the airwaves prompting a pretty decent sell off in the REITs sector which is very sensitive to interest rate fluctuations.

 

In my recent May Stock Considerations post I had mentioned that I was not looking to initiate any new positions for the month but rather focus on what was already in my portfolio. As many long time readers know, that typically meant an investment in TD, BNS or RY. But with the recent climb in the Canadian banks over the last couple of months I have found their value to be a little less compelling at current levels. While still on my potential buy list they have moved down as my top picks for the month of May. With that being said, I shifted my attention to the REIT sector and have a bought the following.

 

I have added to my IRA account 7.0572 shares at $70.85 for a total investment of $500 in Health Care REIT, Inc. (HCN). With this recent purchase my IRA account holdings in HCN now totals 14.0564 shares for a value of $1,000.11.

 

I have added to my IRA account 12.7529 shares at $39.21 for a total investment of $500 in HCP, Inc. (HCP). With this recent purchase my IRA account holdings in HCP now totals 25.3578 shares for a value of $996.31.

 

I have added to my IRA account 7.3163 shares at $68.07 for a total investment of $498 in Ventas, Inc. (VTR). With this recent purchase my IRA account holdings in VTR now totals 14.6822 shares for a value of $1,000.89.

 

These three buys totalled $1,498.00 in fresh capital being added to my stock holdings.

 

What do you think about my recent stock purchases? Are you looking into REITs for your up coming buys as well? Please let me know below.

 

Disclosure: Long HCN, HCP, VTR

42 thoughts on “Recent Stock Purchase – May 2015

  1. I like your picks. I added to OHI and VTR today. REITs look pretty good at these prices.
    Long HCN, O, OHI, VTR, WPC

    • Hi KeithX,

      It seems like many bloggers are liking the REITs in recent weeks. I have been looking at OHI, LTC and NHI as well but might want to diverse into other types of REITs instead of just focusing on health care. Your list of REITs is looking quite solid by the way. If weakness continues in this sector I may make another REIT buy in May. Thank you for stopping by and commenting.

    • Hi KB,

      As you know, being a dividend growth investor, we are always looking for those ‘solid’ dividend stocks to put our money into and these days it seems like REITs are offering some of the better values than in past times. Not that long ago financial stocks seemed to offer the best bargains and yield and then energy prices took a tumble and brought down every oil company down with it. Now with bond yields rising and potential interest rate increases by the Fed, REITs are looking a lot shakier from a stock perspective but are still sound from a company/long term investment perspective. That being said, I tend to favor the larger health care REITs foremost with other names such as O and WPC as well. As always, I appreciate your comment.

    • Hi Ken,

      Looks like you picked up some solid REITs too. It seems like many in the dividend blogging community are buying up the more stable REITs which is a good thing and not focusing as much on the more volatile mREIT sector even though those yields are much higher. Thank you for sharing your recent REIT pick ups.

    • Hi FV,

      I think it’s finally time I took the leap into the REIT space. I know many, like you, are already pretty heavily invested in various REIT sectors especially in recent weeks as REIT stock prices have fallen. This is why sector allocation is so important as we tend to become over invested in certain sectors when they fall out of favor. This happened to a lot of portfolios when oil prices took a tumble and seemingly every buy among the dividend blogging community was an oil (services, drilling) company. Thank you for commenting.

  2. The REITs are looking quite attractive. I’m looking to add some more OHI shares to my portfolio because they’ve taken quite a tumble since I initiated a position. WPC and VTR also look really good. I’m trying hard to not become too overweight the real estate sector although I am bullish on it long term. Especially the health care real estate. Thanks for the update.

    • Hi JC,

      I think that will be the challenge of many long term dividend investors… not to become too overweight in REITs as they are all looking quite attractive. As I noted in another comment, the same thing happened when oil prices took a tumble. Too many investors became overweight in the energy space. The way I like to invest typically involves numerous purchases spread over time rather than fewer larger buys. This has helped me keep a balance in my portfolio that I am comfortable with. Thank you for stopping by and commenting.

  3. Great Buys.

    I bought both HCN and HCP. The only one I didn’t buy was VTR and it was only because I ran out of funds. 🙂 I also purchased WPC and O
    MrStockFox

    • Hi MSF,

      It looks like there are a handful of REITs that are making the rounds these days among the dividend bloggers. We have the big three health REITs, HCP, HCN and VTR with the smaller plays of OHI and maybe LTC and then of course the big O play along with WPC. Quality and opportunity begets buys and many of the REITs are presenting us with the chance to jump in at more attractive levels. While health REITs are my primary investments in this sector I wouldn’t mind owning some retail exposure as well via WPC. As always, I appreciate your comment.

    • Hi FTFF,

      Thank you for your vote of confidence with my recent buys. As you already know ‘defensive’ is in my nature as last month was the first time ever I bought into the REIT space and what did I choose to open my REIT investments with? Three of the big health REITs. Doesn’t get more conservative than that I guess. I was never one to chase yield as my portfolio holds quite a few dividend names that sport yields below 2% but after much reading and following along several stocks in the REIT space I decided to jump on board, slowly. Thank you for stopping by.

  4. Thanks for sharing DivHut. REITs look interesting now, but should become incredibly attractive if the move in the global bond markets continue. I for one hope for some turbulence, because we are underweight REITs. I can’t quite figure out why so many people are jumping on the OHI bandwagon, but your picks above look appealing. Plus, as the saying goes……the right time to buy, is when you have the money. Have a great week!
    -Bryan
    Income Surfer recently posted…….Because Long Ago Someone Planted a TreeMy Profile

    • Hi IS,

      There’s no doubt that external factors are causing a lot more volatility in the REIT space whether coming from bond yields or interest rate hike chatter via the Fed. The reality is that many health care REITs are poised for decades of future growth and I’ll gladly continue to diversify among the large health REIT players as well as other potential names in the space. As you stated, “the right time to buy, is when you have the money,” and now is as good a time as any to starting building up some exposure into the REIT space. Thank you for stopping by and commenting.

    • Hi Tawcan,

      I have a feeling that we’ll have plenty of opportunity to buy into the various REITs in the coming months and years as knee jerk reactions to interest rate increases will no doubt drive REIT stock prices lower. I always believed that a broken stock is worth buying as opposed to a broken company and going forward I see many REIT stocks being broken with their underlying business still sound and growing. Thank you for stopping by and sharing your thoughts.

    • Hi R2R,

      I have seen portfolios holding one, two or all three of the REITs I recently bought. I have a feeling that some might shy away from HCP in the near term though as one of their largest tenants is being investigated for questionable billing practices. Of course, HCP like the other two health REITs are pretty diverse, owning various health related real estate assets and I just see their issues as a current bump in the long term road. After all, totally unrelated, even JNJ just a few short years ago was having its share of problems with Tylenol recalls etc. My point, that even the biggest and the best get hit with those inevitable bumps in the road every now and then. As always I appreciate your comment.

    • Hi HMB,

      I feel almost the same way about my large Canadian banks as you do REITs for now. I still may buy some more BNS but for the most part I am looking elsewhere for my future investments. As my first REIT buy was made last week I am very, very light in the space which is why I am looking to add to my holdings going forward. Of course, I always qualify that statement with the fact the Mr. Market may have other ideas for me but I’d say that 99% of the time I stick to my stock considerations list for each month. Thank you for stopping by and commenting.

  5. Divhut,
    Great purchase in the REIT sector. I currently have Realty income Corp as my only REIT. I want to add LTC in the next few weeks and possibly HCN. LTC is really appealing with the monthly dividend. These stocks not only diversify your portfolio, but they really boost your annual dividend return. Nice move.
    Thanks for sharing
    -LOMD
    Liveoffmydividends recently posted…New Purchase of Coca-Cola StockMy Profile

      • Hi LOMD,

        OK. If volatility persists in the REIT space I have a feeling many other dividend bloggers will be adding quite a few diverse names in the REIT sector.

    • Hi LOMD,

      I have been looking at LTC as well. As far as the smaller health REIT plays I am liking it along with OHI and NHI too. I realize the large REITs that I bought do not offer the same growth potential as the smaller plays but I felt more comfortable diversifying into the REIT space with the bigger plays first. Of course, I also am looking into non-health REIT plays including WPC, O and DLR. As always, I appreciate your comment.

    • Hi DD,

      My portfolio, almost exclusively, is filled with long term dividend growers rather than current high yielding stocks. Most of my holdings yield 2.5% or less but have strong sustained dividend growth. I guess that’s why I really liked the large Canadian banks for so many months as attractive valuations along with great current yield prompted more buys. Now that the REITs have all taken a tumble from their recent highs they too are sporting some pretty decent value along with a great current yield. For now, I won’t mind nibbling on this sector each month. Thank you for stopping by and commenting.

    • Hi Vivianne,

      While it’s true that dividends from REITs are not qualified and taxed at a higher rate than qualified dividends, you can sidestep this fact by holding the REITs in a retirement account such as a ROTH or IRA thereby allowing the full dividend to compound without a tax consequence. This is why I hold my Canadian banks in my ROTH and my REITs in my IRA. Thank you for sharing your thoughts.

    • Hi B,

      Good question. I know that in some countries like Singapore or the U.K. there are gearing requirements that must be met however the U.S. does not specify any restrictions on leverage (or gearing). REITs are monitored by the bond rating agencies in the U.S. to ensure that leverage remains relatively low. While there is no specific number that’s required the bond rating agencies will raise or lower a REITs credit rating according to its debt load. Thank you for stopping by and asking your question.

  6. Hi Divhut,
    Actually I’m looking into selling a REIT I should have sold a long time ago… ARCP. It should be done by the end of the day. I’ll take a loss that I won’t be able to offset (it’s in a registered tax deferred account) but I’m tired of seing that stalled money taking a break. I want my dollars to work! With the proceeds I might buy EMR. It would be a new solid addition to my portfolio even though I’ll miss the june dividend and even though it’s price recently gained back some momentum. I think it is still attractive.
    Cheers,
    Allan recently posted…Rich man quote : John D RockefellerMy Profile

    • Hi Allan,

      An ARCP trade for EMR. That’s a trade up my friend. As you stated, it’s all about our money working and not sitting idle while time goes by. I really like the EMR choice. I have been watching it for a couple of weeks now as well and just watched in amazement at its recent run up. For my REIT investments I think I’ll be sticking with the health care sector for now. I don’t like mREITs nor some of the retail REITs out there with a few exceptions such as O and WPC. Keep loading your portfolio with dividend growers rather than current high yield payers and you’ll be fine long term. Thank you for commenting.

    • Hi EL,

      Usually the time to buy a stock is when it’s hurting and the REIT space has certainly seen a lot of volatility in recent weeks as stock prices all tumbled. I’ll be following my new positions in the big three health REITs and see where the rest of May takes us. I may buy more before the month is over. I’m still looking at other REIT names in different sectors such as retail with WPC and O and perhaps even DLR. Thank you for stopping by and commenting.

    • Hi MU,

      The REIT space has been a little volatile in recent weeks as bond yields crept higher and the ever present “Fed rate hike fear” were in play. I happen to like the health REIT space long term and will slowly be adding to my big three health REITs over the coming months. Thank you for stopping by.

    • Hi DFG,

      REITs in the IRA, Canadian bank stocks in the ROTH. Might as well take advantage of any tax break you can when collecting dividends. Thank you for stopping by and commenting.

    • Hi IT,

      There’s no doubt that investing during record highs of the stock market can be a little unsettling. After all, many have been calling for a top for a long time and many are waiting for the inevitable correction/crash to occur. However, there is a saying, especially if you are a dividend growth investor, that time in the market is better than timing the market and that is something I fully believe in. As long as every company I invest in continues to pay out a dividend, and even better, a rising dividend I’ll be happy. With my long term portfolios I am more interested in a growing dividend income stream rather than capital appreciation. If my portfolio value was halved overnight I would continue to invest as I always have while continuing to collect my dividend income. Another point about waiting for that correction/crash to occur is that you may be sitting on the sidelines for a long time all the while losing out on that valuable time to allow your investments to compound. After all, not that long ago many were questioning if this bull market is real back in late 2009 and 2010. Then issues with high oil prices, the PIIGS, the U.S. debt limit, fiscal cliff, etc. etc. all played out quite loudly in the mainstream media all the while the market continued to march higher. Can and will the market take a nosedive of 10%, 20%, 30% or more… sure. I fully believe it. But it won’t keep me on the sidelines waiting for that inevitability to happen. Thank you for stopping by and sharing your thoughts.

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