July 2021 Dividend Stock Purchases

The past few days have been very hot and humid in Central Wisconsin. The high temperature for today is 80 and it feels like 90 degrees Fahrenheit. Fortunately, temperatures are going to cool down to the 70s starting tomorrow for the foreseeable future.

With that aside, I'll turn my attention to the dividend stock purchases that I made in July 2021.

Starting with my retirement account, I deployed $253.18 in capital to my Capital Income Builder (CAIBX) mutual fund between my 7% contribution and my employer's 3% matching contribution.

Factoring in the 3.5% sales charge for contributions, I put $244.34 in net capital to work during July 2021 within my retirement account. This helped my CAIBX share balance increase by 3.563 shares from 171.434 to begin the month to 174.997 heading into August.

Based on $2.13 in net annual forward dividends/share, my net annual forward dividends were boosted by $7.59. This works out to a 3.11% net yield based on the capital I invested during the month. It's worth noting that this will be the last regular activity in my retirement account aside from dividend reinvestment, which is due to the fact that I started writing for Motley Fool and Seeking Alpha full-time recently.

Moving to my taxable account, I started new positions in five companies during July.

I started July by initiating a 10 share position in Essential Utilities (WTRG) at an average cost of $47.41 a share. The purchase added $10.73 to my net annual forward dividends, which equates to a 2.26% net yield for my cost basis.

For those who are interested in my decision to open a position in WTRG, I would refer them to my recent Seeking Alpha article for more details. I'll just summarize by indicating that WTRG is a stock I have wanted to own for years, but I have always waited for a "better price" that never ultimately materialized.

I was willing to pay a slight premium for shares of WTRG just to get a position started and I intend to aggressively add on even the slightest of pullbacks going forward.

I followed up my purchase of WTRG with yet another utility, which was a seven share position in Pinnacle West Capital (PNW) at an average cost of $84.39 a share. This works out to a 3.93% net yield based on my cost basis and the $23.24 in net annual forward dividends that were added to my portfolio.

PNW was on my July 2021 dividend stock watch list, so it made sense to add it to my portfolio.

I also rationalized my purchase of PNW in a recent Seeking Alpha article, but the long and short of it was that I liked PNW's exposure to Arizona's steadily growing population, nice balance sheet, and safe 4% yield.

Another stock on my watch list for last month that I added to was consumer staple Kimberly Clark (KMB). 

I view KMB as a safe income play with mid-single digit dividend growth potential, which is what prompted me to purchase four shares of the stock at an average cost of $134.33 a share. This equates to a net yield of 3.39% based on the $18.24 in net annual forward dividends that the purchases added to my portfolio.

I also added another share of JPMorgan Chase (JPM) to my portfolio last month at a cost of $151.80, which added $4.00 to my net annual forward dividends. This works out to a 2.64% net yield on my purchase.

Sticking with the financial sector, I initiated a 20 share position in KeyCorp (KEY) at an average cost of $19.17 a share. Considering the $14.80 in net annual forward dividends that were added from my purchase, this equates to a 3.86% net yield.

I covered KEY in a Motley Fool article last month, which was what ultimately led me to start a position in the regional bank. 

I essentially liked the company's solid increase in noninterest income, the improving balance sheet, and huge $1.5 billion share repurchase program at a time when the bank appears to be somewhat undervalued.

The fifth and final stock that I initiated a position in during July was the consumer staple Clorox (CLX), which was also on my watch list for the month.

While I added a bit prematurely given that the stock would tank following its softened outlook in its Aug. 3 earnings press release, I like the company's above-average dividend yield with mid-single-digit dividend growth potential.

This prompted me to start a two share position in the stock at an average cost of $181.13 a share, which is a 2.56% net yield based on the $9.28 in net annual forward dividends added.

Finally, I added to my position in Viatris (VTRS). I purchased 8 shares at an average cost of $13.85 a share, which works out to a net yield of 3.18% when considering the $3.52 in net annual forward dividends added by my purchase.

As I explained in my August 2021 dividend stock watch list post, VTRS is taking the right steps to reduce its debt by $6.5 billion by 2023. The company is trading at just four times this year's forecasted EPS of $3.53, which is mind boggling.

The company is also making nice progress in getting new products approved (and eventually on the market), which is evidenced by the recent approval of Viatris and Biocon's interchangeable biosimilar for Sanofi's insulin drug Lantus that I discussed in a recent Motley Fool article.

Concluding Thoughts:

Overall, I deployed $2,854.61 in net capital during July. Compared to the $91.40 in net annual forward dividends that were added last month, this works out to a 3.20% net yield.

I also added $4.36 in net annual forward dividends due to dividend increases last month, which along with my capital deployment, led to my net annual forward dividends surging from $1,780 entering July to nearly $1,880 heading into August.

Discussion:

How was your July in regards to capital deployment?

Did you add any new positions during the month like I did with my purchases of WTRG, PNW, KMB, KEY, and CLX?

As always, thanks for reading and I look forward to your comments in the comment section below!