Recent Buy – 07/01/2015

Another month down, another paycheck received. Always a good time, isn’t it? Unfortunately, I don’t have as much money to invest this month. We have two big bills coming this month, and I wanted to budget safely for them. But who cares about that, because we still have some money to put away!

So now that all the stocks on my wishlist have all been purchased, I finally get to start the long slow process of accumulation, building up my individual positions to a level I’m comfortable with. The eventual goal is obvious – to have a relatively equal-weighted portfolio of solid dividend growth stocks (and the occasional growth stock), consistently generating income that (a) pays for all of my yearly expenses, and (b) grows at a rate that well exceeds the historical inflation rate of 3.1%. Currently, my next checkpoint is to have a minimum of $5,500 invested in each stock I own.

So let’s start with the basics. Remember how I used to put my wishlist in a fancy spreadsheet, with pretty colors indicating whether or not a company passes or fails a specific buying criterion? I’ve now done that with my portfolio for easy monitoring. I’m not going to embed it because it’s kind of big, but here is a PDF of it for you to look at. Sexy, innit? So with that and my portfolio page, let’s get to work.

Basically, my shortlist for purchase this month is made up of stocks that meet to following two criteria:

1. I own less that $5,500 worth of it
2. The stock passes all or all-but-one of my criteria.

Our list is narrowed down to:

• Consumer cyclicals: Cummins
• Consumer non-cyclicals: Pepsi, Hershey, Colgate-Palmolive
• Energy: California Resources, Chevron, Exxon Mobil, Kinder Morgan, National Oilwell Varco
• Financials: Wells Fargo, BlackRock, T Rowe Price
• REITs: Digital Realty, Omega Healthcare, STAG Industrial, Ventas, WP Carey
• Healthcare: Baxter, Halyard Health, Stryker, Gilead, Johnson & Johnson
• Industrials: Precision Castparts, Norfolk Southern, Union Pacific, Mastercard
• Technology: Apple, Qualcomm, Microsoft
• Utilities: Aqua America

Well shit, that’s a lot. Let’s narrow it down a bit further:

1. I cannot have bought it within the last month (that makes sure I layer in over a reasonable amount of time)
2. The stock should have a current dividend yield over 3% (this is simply because I’m not putting that much away this month, and I want my contribution to generate ALL THE INCOME)
3. No growth stocks (I want income and stability)
4. Must be in the same account I deposited money in

With that, my list is now:

• Energy: Chevron, Exxon Mobil, Kinder Morgan, National Oilwell Varco
• REITs: Digital Realty, Omega Healthcare, STAG Industrial, Ventas, WP Carey
• Healthcare: Johnson & Johnson

And let’s remove stocks where my current loss is less than 5%:

• Energy: Chevron, National Oilwell Varco
• REITs: Digital Realty, Omega Healthcare, STAG Industrial, Ventas, WP Carey

Basically, I feel all of these will go down further in price as time goes on. Oil is stabilizing but not truly recovering, and interest rates haven’t started adjusting yet. So might as well get paid as much as possible to hold one of these, right?

I bought 57 shares of STAG Industrial (STAG) @ $19.99 a share (+$78.66 in annual income)

I bought STAG instead of WPC or OHI because (a) STAG currently has the highest yield of the shortlist, (b) it pays monthly, allowing for quicker compounding of capital, and (c) the next ex-dividend date is one of the earliest, meaning I get more dividends earlier.

Here’s the FAST Graph:

A young company, going forward, charging hard, paying dividends, making me bank. Gotta love it.

Disclosure: Long all listed above.

Tags: STAG, STAG Industrial Inc, stock-purchase