Stock Purchases: PM and TWX

It has certainly been a crazy month for the market!  This past week I experienced my first market correction as a dividend growth investor.  While I have to admit that it was unpleasant to watch my portfolio value drop thousands of dollars over 3 days, the experience was quite different from my old option trading days.

Back when I was a short-term investor, either day trading or options trading, when a trade went deep into the red it was time to panic.  With few exceptions, like when I could adjust a hedged option trade, the market going against me meant that my money was gone.

This is not the case with dividend growth investing.  I plan on holding my stocks long-term.  In fact, my grandchildren will probably still hold many of the stocks in my portfolio.  So I’m ignoring all of the red and I’m focusing on the fact that the companies I own are still doing very well and still paying me dividends.  I am also focusing on the fact that there are now many other great companies out there that are on sale.

Earlier this week I was able to take advantage of the selloff and pick up two high quality dividend growth stocks on the cheap: Phillip Morris International (PM) and Time Warner (TWX).

Phillip Morris has been on my watch list since the beginning and I was just waiting for an opportunity to jump in.  Earlier this week PM dropped below my desired entry price of $80 so I decided to pick up 25 shares.

Time Warner has been pounded over the past month despite a record earnings report in early August.  It then continued to fall even further along with the rest of the market this past week presenting an excellent entry point in the low $70s.

I plan on writing up a detailed analysis of both stocks but for now I’ll just present my purchase details and portfolio impact.

 

Phillip Morris (PM) Purchase Details

  • Sector: Consumer Staples
  • Industry: Tobacco
  • Purchase date: 8/25/2015
  • Portfolio: Dividend Retirement Portfolio
  • Shares purchased: 25
  • Cost per share: $79.64
  • Commissions: $14.95
  • Cost basis: $2005.95
  • Yield on cost: 4.99%
  • Forward income: $100.00

Time Warner (TWX) Purchase Details

  • Sector: Consumer Discretionary
  • Industry: Movies & Entertainment
  • Purchase date: 8/26/2015
  • Portfolio: Dividend Retirement Portfolio
  • Shares purchased: 20
  • Cost per share: $71.51
  • Commissions: $14.95
  • Cost basis: $1445.15
  • Yield on cost: 1.94%
  • Forward income: $28.00

These two purchases add $128 of forward income to my retirement portfolio bringing the total up to $2380.80.  My current portfolio yield is 3.49%.  My Dividend Retirement portfolio has been updated to reflect these additions.

These are two relatively small positions as I am planning on just nibbling at the market for now.  I have some more cash ready to deploy in case the market continues to fall.  I have also learned to set some ridiculously low limit orders in case there is another “flash crash” like the one that occurred Monday morning.

Some lucky investors were able to pick up stocks at crazy prices during the first 15 minutes of trading.  For example, Visa (V) dropped to $60 and Colgate-Palmolive (CL) dropped under $51!  I’ll be ready this time with low limit orders set on these companies and a couple of others on my watchlist.

 

What are you thoughts on PM and TWX right now?  What have you been buying during the selloff?  Please let me know in the comments section below!

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12 Responses

  1. Div4son says:

    Good job Ken at buying the dip. I like PM – but time warner is not on my list. I will try to research this company to see if it makes sense for me.
    Thanks for sharing.
    D4s

    • Dividend Empire Dividend Empire says:

      Thanks D4s. I think next time I should be more aggressive but I’m still learning. Definitely check out Time Warner. Tons of growth over there.

      Take care,

      Ken

  2. DE,
    Nice move! Two great companies at a bargain. Keep up the strong investing.
    LOMD

    • Dividend Empire Dividend Empire says:

      Thanks LOMD. Still lots of bargains out there and I’m hoping to pick some more up soon. Have fun shopping!

      Ken

  3. Hi Ken,

    Good pickup with PM! What incredible income from a 2k purchase. I’m nibbling right now. I also think we are in for some more extreme volatility. Funny, I set a crazy low limit order on CL too! Lets keep our fingers crossed.

    • Dividend Empire Dividend Empire says:

      Thanks Blake! Those were some great purchases you made as well. I wish I was as active as you. I’ll be ready next time!

      Take care,

      Ken

  4. divorcedff says:

    DE

    I’ve also bought PM in the pullback and also 7 more companies :-)

  5. vivianne says:

    3.5% yield is exceptional, with these dividend growth stocks, by the time you call it quit, I wouldn’t be surprise if your yield on cost > 10-20%.

  6. Dan says:

    Time Warner has been nothing but straight down since mid July, and is a very interesting idea. Funny how quickly sentiment can change though. It wasn’t so long ago (last August) that a pending deal was on the table from Fox for close to $80B…

    • Dividend Empire Dividend Empire says:

      Thanks for stopping by Dan. It’s been a wild, and I believe unwarranted, ride down for TWX and I think now is a good time to buy.

      Take care,

      Ken

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