December 2020 Dividend Stock Purchases

 As I'm writing this blog post, Christmas Day is in the rearview mirror and New Year's Day is coming up in just a few more days. 

With that in mind, I'll be discussing my dividend stock purchases that were executed during December 2020. 

Before I start off with the activity in my retirement account, I would like to preface this post with an explanation of why my buying activity for the month overall was over $3,000.

As some may be aware, Robinhood recently announced that it would be lowering its margin rates from 5.0% to 2.5%.

I saw an opportunity to add just over $1,800 in margin to my account (aside from the first $1,000 in interest free margin) to buy high quality dividend stocks with yields primarily in the 3-4% range since a margin call would require a 75%+ drop in my Robinhood portfolio and I 1) view that as a highly unlikely scenario and 2) have virtually no debt aside from my margin debt.

Without further ado, I deployed $341.67 in gross capital when including my 7% contribution to my Capital Income Builder (CAIBX) position within my retirement account, my employer's 3% contribution, and dividends/special dividends received during December.

When factoring in sales charges and the $10 annual fee that CAIBX charged in December for the upcoming year, I deployed $320.32 in net capital during December 2020.

This allowed me to build my CAIBX position from 140.581 shares heading into December to 145.695 heading into January 2021, which added $10.94 to my net annual forward dividends, assuming an annualized dividend/share of $2.14.

My capital deployment into CAIBX during the month equates to an average weighted net yield of 3.42%.

Moving to the activity within my Robinhood portfolio, I started the month off by initiating a 10 share position in National Retail Properties (NNN) at a total cost of $397.00 (which I essentially provided my explanation for in an article here on Seeking Alpha a couple months before I initiated my position).

My 10 share purchase of NNN added $20.80 in net annual forward dividends to my portfolio, which equates to an average weighted yield of 5.24%.

I also purchased 5 shares of WEC Energy Group (WEC) during the month at a total cost of $457.41, which when weighted against the $13.55 in net annual forward dividends added equates to an average weighted yield of 2.96% (for more insight into why I went on to initiate a position in WEC, I would refer interested readers to my article last month on the stock).

I added 3 shares to my position in Pfizer (PFE) (due to the fact that I believe in the company's R&D pipeline and commercial drug/vaccine portfolio at this time and the company appears to be trading at a slight discount to fair value), which cost $112.06, working out to an average weighted yield of 4.18% when considering the $4.68 in net annual forward dividends that were added with this purchase.

I also increased my position in CVS Health (CVS) by 1 share at a cost of $67.53 due to the stock's continued strong operating fundamentals (more on that in my upcoming SA article), which equates to a yield of 2.96% factoring in the $2.00 in net annual forward dividends that were added as a result of the purchase.

I added 2 shares of Realty Income (O) to my portfolio at a total cost of $121.92, which works out to a yield of 4.62% when considering the $5.628 in net annual forward dividends that were added with this purchase.

I also increased my position in PepsiCo (PEP) by 1 share at a cost of $144.76, which works out to a yield of 2.83% factoring in the $4.09 in net annual forward dividends that were added as a result of the purchase.

Another high-quality dividend payer that I added 1 share to my position in was Johnson & Johnson (JNJ) at a cost of $153.15, which equates to a 2.64% yield when considering the $4.04 in net annual forward dividends that were added due to this purchase.

I also added 2 shares to my position in GlaxoSmithKline (GSK) at a total cost of $72.80, which works out to a 5.49% yield factoring in the $4.00 in net annual forward dividends that were added with this purchase.

Next, I increased my position in British American Tobacco (BTI) by 2 shares at a total cost of $73.45, which equates to a 7.35% yield when considering the $5.40 in net annual forward dividends that were added as a result of this purchase.

I also increased my position by 1 share in Lockheed Martin (LMT) at a total cost of $351.26, which works out to a 2.96% yield factoring in the $10.40 in net annual forward dividends that were added due to this purchase (for further insight into why I went on to add to my position in LMT, I would refer interested readers to my October 2020 article on the stock).

I added 2 shares to my position in Cisco (CSCO) at a total cost of $89.48, which equates to a 3.22% yield when considering the $2.88 in net annual forward dividends that were added to my portfolio as a result of this purchase.

I also increased my position in Genuine Parts Company (GPC) by 1 share at a total cost of $100.27, which works out to a 3.15% yield when factoring in the $3.16 in net annual forwards that were added due to this purchase (for more of an explanation into why I added to my position in GPC, I would refer interested readers to my article this month on the stock).

I added 1 share to my position in W.P. Carey (WPC) at a total cost of $71.16, which equates to a 5.88% yield when considering the $4.184 in net annual forward dividends that were added as a result of this purchase.

Finally, I initiated an 11 share position in Aflac (AFL) at a total cost of $481.80, which works out to a 3.01% yield when factoring in the $14.52 in net annual forward dividends that were added due to this purchase.

Concluding Thoughts:

Overall, I added $110.27 in net annual forward dividends on the $3,014.37 in capital that was deployed during December, which works out to a 3.66% average weighted yield.

When factoring in the $46.76 in additional Robinhood Gold costs due to the aforementioned ~$1,870 in margin, a $19.20 downward adjustment to my Simon Property Group (SPG) dividends (there was a glitch between when I got my new smartphone and when I wrote my previous post of this series, which didn't account for SPG's dividend cut months ago in my spreadsheet that is synced to my blog's portfolio), and the $7.16 in dividend increases to my portfolio during December, my annual net forward dividends heading into 2021 are at an all-time high of just over $1,363.

Discussion:

How was your capital deployment during the month of December 2020?

Did you open any new positions as I did with NNN and WEC (and from a whole share standpoint with AFL, as I only owned a fraction of a share in my M1 Finance account prior to the purchase of 11 shares of AFL this month)?

I appreciate your readership and look forward to creating content in 2021! Please feel free to leave your comments in the comment section below.