Welcome 2018! This year began with a blizzard for those of us in the Northeast USA followed by frigid temperatures. Here in NYC schools were closed as were most businesses, but in my line of work (which is a city job), we were open for business (we were told to use our judgement and many called out for that day). Nonetheless, to the surprise, amusement, and bewilderment of my co-workers, I walked the 2.2 miles to work during the blizzard and walked the same path back home. Everyone else spend money on an Uber or the subway. But I found the walk exciting and enduring. One of the best walking experiences I ever had.
Last week I made three stock purchases to start off 2018. I can’t remember the last time I made three purchases in a round like that. Normally I make one large purchase at a time after I accumulate money from working and dividends. Each quarter I usually end up with $4000 ready to invest in dividend stocks. This time I decided to divide up that amount into two purchases. But I also decided to reconfigure my portfolio a little bit. This ended up adding more money for new purchases.
I decided to sell one of my holdings. It has been over a year since I last sold a stock. Last week I sold my 182 shares of Universal Health Realty Income Trust (UHT). My original cost basis was $8,636.38 and I sold it for $12,030.23. Thus I sold for a profit of $3,565.16. This was a great company that I held since 2015 (3 years). And I gained $1,187.55 in dividend income during those 3 years. Altogether that adds up to $4,752.71 in monetary gains since 2015. When the smoke cleared from the sale I now had another $12,000 to (re)invest.
With the selling of UHT came the loss of their dividend, which totaled $487 per year for me. Many know how I felt my portfolio was a bit REIT heavy, so I stopped purchasing REIT’s for the totality of last year. Getting rid of one alleviated that dilemma, but also left a huge hole in my forward annual dividend income. How could I fill the gap? Well, I decided to reinvest part of the money from the UHT sale into another REIT.
To start the brand new year I purchased 188 shares of Realty Income Corp (O) at $52.95 per share with a large portion of the money from the UHT sale. With the purchase of The Monthly Dividend Company, comes a forward annual dividend income of $479.40 ($39.95 per month or $119.85 per quarter). As a result, the hole left by the UHT sale has been largely plugged with $2000 left over for other purchases.
Using the money I saved up from my working income, dividend income, and UHT sale, I decided to up the Utilities sector of my portfolio which is (was) the smallest sector in terms of value. The next purchase was Consolidated Edison (ED). I bought 58 shares of ED which adds a total of $160.08 to my annual dividend income. With ED, I bought 36 shares at $82.10 per share and on another day 22 shares at $80.93 per share for a total of 58 shares. So now ED is now the 16th stock in my portfolio, the Dividend Empire.
Funny enough, being a resident of NYC, it is Con Ed that provides my electricity. I pay my electric bill each month to Con Edison and now they will start to pay me back something! That adds a little bit of sweetness to this buy. The dividends that I will receive from ED would cover three full months of electric bills with spillover for the fourth month. In a way, it is like I will be paying only 8.5 months’ worth of electric bills rather than the full 12 months’ worth.
My final purchase was adding to my position in The Southern Company (SO). I bought an additional 21 shares of SO at $46.83 which adds a total of $48.72 to my annual dividend income. This buy brings my forward dividends for the year from SO to $470.96 (up from $422.24).
So all in all, my sale of UHT cost me their dividend of $487 per year. However, since I used the sale money to purchase other stocks (O and ED) I ended up gaining $540.12 in forward annual dividend income. That’s more that if I had held on to UHT. Even if I didn’t sell UHT I still would have added $148.08 to my yearly dividend income just with my originally planned purchases of ED and SO.
My three purchases of O, ED, and SO added $688.20 in forward dividend income for the year. Minus the UHT sale costing me $487 in yearly dividend income and I still come up with a net dividend income gain of $201.20 in forward annual dividends. So with one sale and three buys, my portfolio now stands to generate a forward dividend income of $8479.45 for the year. I am quite satisfied with how this financial whirlwind (blizzard?) of a week has turned out. The value of portfolio is inching closer to the 150K mark. I am expecting to break that mark this year (if all goes well). I guess slow and steady wins the race and I am getting there. So what do you think? Do you own any of these companies? 🙂