I finally made my first purchase of the month! Sorry, nothing too exciting here – just a good old fashioned average down of a stock that’s been pounded since the end of January.
Realty Income Corp (O) is down about 9% since I originally purchased it back in April because of the “rate panic.” As far as I can tell the fundamentals of this company have not changed and as Dividend Mantra and others like to say – if I liked it at $49.50 I should love it at $45.70!
In addition to this being a fundamentally sound company, the Realty Income Corp dividend is not going away anytime soon. In fact, they will most likely raise it again next month to maintain their quarterly dividend increase streak.
I made this purchase for a couple of different reasons besides the fact that it is a great company that should probably be in every dividend growth portfolio. As I mentioned above, my original purchase was down 9% and O is now right around a 5% dividend yield – a psychologically comforting level. It is also sitting on very strong support ($45.50) that has proven sturdy several times this year. I know I said the same thing about my last purchase price but this support level is much stronger. And hey, if it breaks through and drops to $40 I’ll just buy more!
I won’t spend any more time analyzing Realty Income Corp since my original purchase article provides a short analysis if you are interested. In this post I will just focus on the details around my new purchase.
Stock Purchase: Realty Income Corp (O)
- Sector: Financials
- Industry: REIT – Retail
- Purchase date: 6/4/2015
- Portfolio: Dividend Retirement portfolio
- Shares purchased: 65
- Cost per share: $45.72
- Commissions: $14.95
- Cost basis: $2986.75
- Yield on cost: 4.95%
- Forward income: $147.81
This new purchase makes me the proud owner of 125 total shares of O with a new cost basis of $5,969.30. This represents 13% of my dividend retirement portfolio, now my largest holding. My yield on cost for the position increased from 4.59% to 4.77% with this addition and I can now expect O to bring in a total of $285 per year of dividend income.
This addition also had a substantial impact on my portfolio yield on cost and my portfolio forward income. My portfolio yield on cost increased from 3.17% to 3.29% and my forward income is now $1,483.68.
My Dividend Retirement portfolio has been updated to reflect the addition of 65 shares of O.
What do you think of this purchase? Should I have waited for a further decrease in price? Please let me know in the comments section below!