Recent Buys – Realty Income Corp (O), Con Edison (ED), Southern Company (SO) and Recent Sell – UHT

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? 🙂

20 Comments

  1. Dividend Portfolio

    Just the proud owner of O right now Dynasty. Looks like you made some good moves selling that one company. Way to kill three birds with one stone, so to speak.

    It’s always fun when you utilize the services of a company you’re invested in. Who knows, maybe one day you’ll make so much dividends from Con Ed that you will get your electricity free for the whole year!

    Reply
    1. My Dividend Dynasty (Post author)

      Thanks DP! Glad to be a fellow O shareholder! 🙂 I am very happy with the buys. That would be great to own enough shares of ED to cover all electricity expenses for the year (or even more). 😀

      Reply
  2. Dividend Diplomats

    Dynasty –

    Damn slick moves, enough said. That O Position is awesome and the monthly dividend will be cherished : ) Congrats!

    -Lanny

    Reply
  3. My Dividend Dynasty (Post author)

    Thanks Lanny! Yes! I am very much looking foward to that monthly dividend! 😀

    Reply
  4. Passivecanadianincome

    Dammmmmm. Nice dynasty! Great increase in dividends and who can argue about those stocks?

    Reply
    1. My Dividend Dynasty (Post author)

      Thanks PCI! Very happy with those purchases. Especially O’s recent dividend increase. 😀

      Reply
  5. p2035

    Wow congrats. Thouse are a nice set of compabies you have there. D has a nice yield and ED is something that you use. Its a good idea to buy something that you know from personal side 🙂 I got into AEP, looks more or less ok as well as a utility and would be into OHI. Why did you pick O insteaf of OHI? I see you own both. OHI looms a better buy right now from my view

    Reply
    1. My Dividend Dynasty (Post author)

      Thanks p2035! 🙂 For the past year I felt I was too heavy in the REIT sector (especially in healthcare REITS), so that weighed in on my decision to buy O over more OHI. There was also the fact that O reached new lows just as I sold UHT. So in the end, I think it worked out for the best. Thanks for stopping by! 😀

      Reply
  6. desidividend

    Huge Purchases, looks like O is the flavor of the month in DGI community ,i do own small number of them in my account.maybe should look at SO is its at correct price for me.

    Reply
    1. My Dividend Dynasty (Post author)

      Hi Desidividend! Yeah, O is definitely the favorite this month. I am glad to now be a shareholder. Utilities are also getting much attention. Thanks for stopping by! 🙂

      Reply
  7. The Dividend Karma

    Great purchases there. I also recently bought into SO and some REITs (not O though). I agree this is a good time to get into some of the income stocks such as REITs and Utility sectors.

    Good Luck.
    TDK.

    Reply
    1. My Dividend Dynasty (Post author)

      Thanks Dividend Karma! WOW. Looks like you made some awesome purchases as well this month! Congrats! 🙂

      Reply
  8. DividendSolutions

    Hey Dynasty,

    really love your portfolio reconstruction!! – taking that huge profit and reinvesting in companies which got a little under pressure is a smart move. I just purchased another 50 shares of Realty Inocme myself and i own now 250 of this rock solid company. SO and ED are good too, i’d like to add ED to my portfolio but right now the valuation looks a little high for my taste.

    My portfolio is a bit REIT heavy too at the moment, but with the REIT sector going south generally, i could not pass at that opportunity. I added 30 shares of Welltower to the LoneStar Freedom Fund too. – With the next purchases i’ll focus on non REIT stocks, maybe european / german stocks, we’ll see. On the other hand the weak dollar presents good buying power for me, cause i’m paid in Euros…in a few day a new blog post of some german dividend stocks will be out…

    Greets to NYC
    DividendSolutions

    Reply
    1. My Dividend Dynasty (Post author)

      Thanks Dividend Solutions! 250 shares of O sounds fantastic! Yeah, the REIT sector became too tempting to ignore. Even though I felt my portfolio too REIT heavy, O was just too good an opportunity to pass up. Looks like you made some great buys yourself. Congrats! And I like your thinking on taking advantage of a weak dollor to maximize your buying power. Sounds like a great plan to me! 😀

      Reply
  9. Tom @ Dividends Diversify

    Good work DD. I recently added to my position in O and have an addition to SO on my short list. Cyclical rotation and higher interest rates are putting pressure on these interest sensitive stocks and bringing them down into buy territory, in my opinion. Tom

    Reply
    1. My Dividend Dynasty (Post author)

      Hi Tom! Yes, I definately agreed with you. REIT’s and Utilities are in buy range. I am glad a made a move on them to start the new year. Thanks for stopping by! 🙂

      Reply
  10. Engineering Dividends

    Way to adjust the portfolio, MDD! I like the moves. I’m an O owner, and have an open put on SO. That was quite the chunk of O you added. You’ll going to love that monthly income. Best of luck with the recent changes.

    Reply
    1. My Dividend Dynasty (Post author)

      Hi Engineering Dividends! Glad to join you as an O owner! 🙂 I can’t wait to start collecting those monthly dividends! Thanks for your comment! 😀

      Reply
  11. Dividend Daze

    Nice work on the portfolio. Nice to see you taking advantage of these dips/ corrections as well. Within the past month or so, I have added more to O and started a new position with SO as well. With both the REIT and Utilities sectors getting hit the hardest, it seemed like a good place to start making purchases.

    Reply
  12. Dividend Pursuit

    Dynasty,

    I like the buys, I have been looking at all 3 of those stocks but specially O and SO for this months purchase. Keep buying those nice dividend paying stocks.

    Dividend Pursuit

    Reply

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