January 2022 Dividend Stock Purchases

As I'm writing this blog post, we're halfway through February already. The temperatures are wildly swinging from just above freezing one day to well below freezing the next day.

With the month of January well in the books, I'll go over my dividend stock purchases and sales for the month.

I purchased four shares of 3M (MMM) at an average cost of $177.81 a share. As I outlined in my January 2022 Dividend Stock Watch List post, 3M is a reasonably valued, high-yield dividend stock with a relatively strong balance sheet. Given that I added $23.68 in net annual forward dividends from this purchase activity, my average net yield was 3.33%.

I also opened a five share position in Allstate (ALL) at an average cost of $122.77 a share. I noted in my January 2022 Dividend Stock Watch List post that ALL offers a market-beating dividend yield and has a massive investment portfolio that will benefit from upcoming interest rate hikes. These dividend stock purchases boosted my net annual forward dividends by $16.20, which works out to a weighted average net yield of 2.64%.

I purchased three shares of Union Pacific (UNP) at an average cost of $250.92 a share. As I discussed in my January 2022 Dividend Stock Watch List post, UNP is essential to the modern economy. Not to mention the stock provides investors with a market-topping dividend yield at a fair valuation. Since I added $14.16 in net annual forward dividends from these buys, my average net yield was 1.88%.

I also bought another share of Medifast (MED) at a cost of $220.92. As I explained in my December 2021 Dividend Stock Purchases post, MED offers investors tremendous annual earnings/dividend growth at a bargain valuation. My net annual forward dividends were boosted by $5.68 as a result of my dividend stock purchases, which equates to a weighted average net yield of 2.57%.

I purchased an extra share of Texas Instruments (TXN) at a cost of $182.33. I added to my position in TXN for the same reasons that I started the position. As I highlighted in my November 2021 Dividend Stock Purchases post, TXN is a top-notch dividend growth stock trading at a fair valuation. My net annual forward dividends advanced $4.60 higher as a result of my purchase, which works out to a 2.52% average net yield.

I sold off several of my positions in stocks including Orion Office REIT (ONL), Equitrans Midstream (ETRN), Ventas (VTR), and PPL Corp (PPL). 

I closed my position in ONL because it simply came from the spin-off of Realty Income (O) and I didn't see the value in keeping/expanding my position in the stock. 

ETRN recently encountered yet another setback in bringing its Mountain Valley Pipeline (MVP) into service, which has been going on for several years now. Because of all of the regulatory setbacks, this was the last straw for me and I lost hope that MVP will ever be placed into service. This was central to my investment thesis when I bought in years ago. 

I sold VTR because the stock cut its dividend nearly two years ago and hasn't made any effort to restore its dividend yet. I'm willing to give a dividend stock a chance after a cut or suspension, but even I run out of patience at some point. That's what happened here.

I also sold PPL because the dividend growth has decelerated greatly the last few years and a dividend cut is likely to occur due to the sale of its operations in the United Kingdom.

All told, these four sales raised $696.67 in capital. My net annual forward dividends dropped by $31.88 due to these sales.

I bought another five shares of Viatris (VTRS) at an average cost of $14.63 a share. I added to my position in VTRS because of the recent dividend hike and absurdly cheap valuation. Considering the $2.40 in net annual forward dividends that I added from this purchase, my weighted average net yield was 3.28%.

I also added a share of American Water Works (AWK) at an average cost of $164.13. I further built my AWK position because of the low payout ratio and exceptional earnings growth prospects. My net annual forward dividends grew by $2.41 as a result of my purchase, which works out to an average net yield of 1.47%.

I deployed a portion of my sales proceeds into Medical Properties Trust (MPW) because of its solid dividend growth track record, status as the second-largest non-government owner of hospitals in the world, and attractive valuation. I purchased 16 shares of MPW at an average cost of $22.26 a share. My net annual forward dividends were boosted by $17.92, which equates to a weighted average net yield of 5.03%.

I also deployed my sales proceeds into Kinder Morgan (KMI), which offers a safe and growing dividend at an enticing valuation. I purchased 20 shares of KMI at an average cost of $17.20 a share. My net annual forward dividends advanced $22.20 higher, which works out to an average net yield of 6.45%.

Concluding Thoughts:

Factoring out the capital that I redeployed from the stocks I sold to MPW and KMI, I invested $2,721.87. Since I added $77.37 in net annual forward dividends from this capital deployment, my average weighted net yield was 2.84% in January. Adding in the $15.08 in extra net annual forward dividends from dividend increases during the month, my net annual forward dividends surged from $2,295 to start the month to just under $2,390 heading into February.

Discussion:

How did your January 2022 go for capital deployment?

Did you open any positions in your portfolio like I did with ALL, MPW, and KMI? Did you close any positions like I did with ETRN, ONL, PPL, and VTR?

As always, I appreciate your readership and look forward to your thoughts in the comment section!