October 2021 Dividend Stock Purchases

As I'm writing this blog post, it's the day before Halloween. The typical reader of this blog is pretty mindful of spending. But for any newcomers to the blog or to the concept of financial independence retire early (FIRE), I want to remind everyone of this mind-boggling fact: Saving an extra 2% of your income could potentially shave years off of the time it takes you to achieve financial independence. 

Why do I make this point? Because the average American household allocates over 2% of its budget to holiday spending each year and Halloween is one of the bigger spending holidays. It isn't that you should refrain from spending, but I believe we all can be more mindful of our spending to understand the impact that our spending decisions have on our financial lives.

With that rambling aside, I'd like to turn my attention to the dividend stock purchases that I made during the month of October 2021.

I started off October by opening a position in McDonald's (MCD), which was the result of McDonald's strong balance sheet and reasonable valuation based on my October 2021 dividend stock watch list post. 

I purchased three shares of McDonald's at an average cost of $244.32 a share. This works out to a 2.26% net yield when considering the $16.56 in net annual forward dividends that these transactions added to my portfolio.

I also opened a three share position in Cummins (CMI) last month at a cost of $235.16 a share. Against the $17.40 boost in net annual forward dividends due to these purchases, this equates to a 2.47% net yield.

I added two units of Enterprise Products Partners (EPD) to my portfolio as well at an average cost of $21.67 a unit. This transaction added $3.60 to my net annual forward dividends, which is a net yield of 8.31%.

The other midstream purchase that I made in October was two units of Magellan Midstream Partners (MMP) at an average cost of $45.60 a unit. Based on the $8.22 in net annual forward dividends that were added to my portfolio (prior to the 1% dividend increase in mid-October), this works out to a 9.01% net yield.

I opened a five share position in Omnicom (OMC) in October at an average cost of $72.97 a share, which I also outlined the rationale for in my October 2021 dividend stock watch list post linked above. These purchases added $14.00 to my portfolio in net annual forward dividends, which equates to a 3.84% net yield.

I also added two shares to my stake in American Electric Power (AEP) at an average cost of $84.11 a share. For an explanation of why I added to my position in AEP, I would refer interested readers to my recent Motley Fool article discussing 3 dividend-paying Nasdaq 100 stocks including AEP, Amgen (AMGN), and PepsiCo (PEP). Considering the $5.92 in net annual forward dividends that were added to my portfolio (before the 5.4% dividend increase), this works out to a 3.52% net yield.

I increased my position in Verizon (VZ) by two shares in October at an average cost of $52.03 a share. I explained my logic in a recent Motley Fool article on why Verizon is a buy for readers who are interested. Based on the $5.12 in net annual forward dividends that were added to my portfolio, this is a 4.92% net yield.

Finally, I opened a five share position in Raytheon Technologies (RTX) at an average cost of $89.03 a share. I discussed my reasoning in my October 2021 dividend stock watch list for curious readers. The $10.20 in net annual forward dividends that were added due to my purchase works out to a 2.29% net yield.

Concluding Thoughts:

October 2021 was the fourth straight month in which I put at least $2,000 in capital to work by purchasing some of the greatest businesses in the world. I invested $2,655.24 in capital during the month, which equates to a 3.05% net yield given the $81.02 in net annual forward dividends that these purchases added to my portfolio.

Add in the $6.38 boost to net annual forward dividends through dividend increases received in October 2021 and my net annual forward dividends grew nearly $90 from approximately $2,030 at the start of October to over $2,115 heading into November.

Discussion:

How was your October 2021 for capital deployment?

Did you start any new positions during the month as I did with MCD, CMI, OMC, and RTX?

As usual, I appreciate your readership and welcome your comments in the comment section below!