Stock Purchases – November And December 2019

Thank goodness for free trades.  Fidelity’s decision to join the free-trade club has allowed me to make a lot of small purchases.  These small purchases have allowed me to either slowly build a new position in a stock or use excess cash to add small dollar amounts to positions that were already established.  We recently crossed a huge investing milestone, $10,000 in forward dividend income, and the free trades have allowed us to continue our momentum.

In my November Dividend Income summary article, I summarized my November purchases and the dividend income added as a result of the purchase.  However, the discussion was brief.  So today, I was going to summarize all my November and December stock purchases to date.   In conjunction with the release of the article, I have updated my portfolio as well.

Bert’s Stock Purchase Summaries

Company #1:  J.M. Smuckers (SJM) –  18 shares; $1,877.53 Cost Basis; $63.36 Dividend Income Added

The largest write-up I had in my dividend income summary was Smuckers.  It was the company I always chased over the years, but never made the decision to purchase.  For some reason, despite flashing “Buy” signs whenever the company dipped below $100 per share, I ignored them.  Only finding myself regretting my passiveness at a later date.

In this timeframe, I have purchased Smuckers 3 times.  Each purchase was at a stock price lower than the last.  Now, my cost basis is an average of $104.30 per share.  Sloghtly above my internal $100 per share threshold, but I am pretty happy with the new position.

Their latest earnings release prompted the sell-off.   The news in the earnings release was mixed.  Sales and gross margin decreased compared to last year while both net income and free cash flow increased slightly.  The major news was Smuckers revised their 2020 outlook downward.  See the chart from their earnings release below:

I get it.  Nobody wants to see their 2020 outlook decrease.  But the results really didn’t change THAT much.  At least, not enough to seriously impact the company’s dividend for the foreseeable future.  Let’s briefly run SJM through our Stock Screener using the low end of their EPS range ($8.10 per share) and my average purchase price of $104.20 per share :

  • Metric #1: P/E Ratio – 12.86 X
  • Metric #2: Dividend Payout Ratio – 43%
  • Metric #3: History of Increasing Dividend – 9 years, 5 year average dividend growth rate – 7.24%.
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Disclaimer: I do not recommend any decision to the reader or any user, please consult your own research. Thank you.

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