Stock Purchases: PSA, FTR and ABBV

 

I’m finally back after taking time off from investing due to a some extremely busy months at work.  To celebrate, I decided to go on a bit of a shopping spree today.

I initiated 3 new positions – 2 in my Retirement portfolio and 1 in my Empire portfolio.  I’ll go into more detail below but here is a summary of my purchases:

Dividend Growth Stock Purchase Summary

 

Stock Purchase: Public Storage (PSA)

  • Sector: Financials
  • Industry: Specialized REITs
  • Purchase date: 5/4/2016
  • Portfolio: Dividend Retirement Portfolio
  • Shares purchased: 10
  • Cost per share: $257.8499
  • Commissions: $14.95
  • Cost basis: $2593.45
  • Yield on cost: 2.78%
  • Forward income: $72.00

Company Overview:

Public Storage provides storage units for personal, business and vehicle needs.  Source – TradeKing.

 

I won’t go into a detailed analysis here.  I’ll just say that I’ve always wanted to own shares in a storage company for a couple of reasons.  For one, there is a finite amount of land available and the world is getting crowded, especially in big cities.  This alone increases the demand for storage.

This has also changed the way new homes are being built.  From what I’ve seen, new homes are being built on tiny lots with small garages and very little storage.  This allows the builders to squeeze in as many homes as possible.  This typically results in the homeowners turning to outside storage.  Finally, high divorce rates are fueling the need for storage.

Many of the big storage companies have grown significantly over the past few years and I can’t imagine it stopping any time soon.  I’ve just been waiting patiently for a decent entry.  After a rapid spike from $200 to $275 over the last few months PSA recently dipped down to $250 and I decided to pick up some shares.

The PSA dividend is also very attractive and has been growing at a steady rate, ranging from 9% – 20% increases each year.

PSA Dividend History

*Predicted annual dividend

 

 

Stock Purchase: Frontier Communications (FTR)

  • Sector: Telecommunications
  • Industry: Integrated Telecommunications Services
  • Purchase date: 5/4/2016
  • Portfolio: Dividend Retirement Portfolio
  • Shares purchased: 500
  • Cost per share: $5.285
  • Commissions: $14.95
  • Cost basis: $2657.45
  • Yield on cost: 7.90%
  • Forward income: $210

Company Overview:

Frontier Communications Corp. is a communications company, which provides services to rural areas and small and medium-sized towns and cities in the U.S. It offers a variety of voice, data, Internet, and television services and products.  Source – TradeKing.

While this certainly isn’t a traditional dividend growth stock I feel like it’s worth taking on some risk here.  First the bad stuff – FTR had a dividend cut a few years back and they have not been aggressively increasing the dividend since then.  Bottom line is that this is not a dividend growth play.

FTR Dividend History

*Predicted annual dividend

That said, the current yield is a monster 8% so I don’t really care about or need dividend growth.  The question is – is that 8% yield safe and sustainable?  FTR has very stable fundamentals and is expected to significantly grow revenues over the next couple of years, aided by the acquisition of Verizon assets.

Though I’m fairly confident that I’ll see some gains in share price while collecting a nice dividend, I’ll definitely keep a close eye on this one.

 

Stock Purchase: AbbVie (ABBV)

  • Sector: Health Care
  • Industry: Biotechnology
  • Purchase date: 5/4/2016
  • Portfolio: Dividend Empire Portfolio
  • Shares purchased: 15
  • Cost per share: $61.3399
  • Commissions: $4.95
  • Cost basis: $925.05
  • Yield on cost: 3.70%
  • Forward income: $34.20

Company Overview:

AbbVie, Inc. is a research-based biopharmaceutical company. It engages in the discovery, development, manufacture and sale of a broad line of proprietary pharmaceutical products.  Source – TradeKing.

I think by now everyone is well aware of ABBV and their incredible growth potential, but just in case I’ll refer to you this nice write-up by simplysafedividends.com.  I’ll just add that ABBV is currently trading at just 10.9x expected 2016 earnings so I think this is a great time to buy.

As for the dividend, there are only 3 years of ABBV dividend history to analyze but so far so good:

ABBV Dividend History

*Predicted annual dividend

 

These purchases add $282 in forward income to my Retirement portfolio and $34.20 in forward income to my Empire portfolio.  I still have some cash on hand so I’m looking forward to making a few more buys this month in addition to increasing my Loyal3 monthly contributions (post coming soon).

What do you think of these purchases?  Please let me know in the comments section below!

Disclosure: Long PSA, FTR, ABBV

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6 Responses

  1. I really like the ABBV purchase. This company is set up to make serious money in the coming years. I don;t own shares yet, but it’s a perennial watchlist stock for me.

    • Dividend Empire Dividend Empire says:

      Thanks for the comment. I feel the same way about ABBV and I’m planning on adding to this position on a regular basis.

      Take care,

      Ken

  2. DivHut says:

    The best shopping sprees are the ones where you can invest in yourself. I like the PSA and ABBV buys. Not a real fan of FTR though I can see the appeal of this “utility.” I just hold ABBV from these buys but wouldn’t mind some extra REIT exposure too.

    • Dividend Empire Dividend Empire says:

      Thanks for the feedback DivHut. FTR is definitely a risk but one that I’m willing to take. There is a lot of growth potential there and I’ll take the big divvy while I wait.

      Take care,

      Ken

  3. Nice haul Ken!

    I’ve been looking at ABBV a bunch lately, just not able to pull the trigger (been buying PFE instead). Does ABBV have any promising cancer treatments up and coming that you’re aware of or watching? I know thats a particular interest of yours :)

    • Dividend Empire Dividend Empire says:

      Thanks Blake! I’m planning on adding to this on any and all dips. They have an unbelievably diversified pipeline targeting many different diseases. Within oncology they have drugs in clinical trials covering just about every indication – multiple myeloma, NHL, lymphomas, breast, ovarian, pancreatic and other solid tumors. They currently have 13 phase 3 trials in oncology alone! Imbruvica (approved) and Veliparib (PARP inhibitor – phase 3) look very promising.

      Take care,

      Ken

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