Last week I went a little crazy and made 4 new purchases for my dividend growth stock portfolio. On a day when the market was down, I took advantage to make my buys using my monthly capital contribution plus some additional savings that I decided would be put to better use buying some shares of some solid quality dividend growth companies. The monthly income savings and my additional savings allowed me to buy 4 new companies to include in my portfolio.
Philip Morris International
Philip Morris (PM) is an international tobacco company selling the most popular cigarette brand in the world, Marlboro. Philip Morris used to be the international division of Altria but was spun off to become its own company back in 2008. They have been increasing their dividend rate every year since becoming their own company. You can read my recent stock analysis of Philip Morris here.
In my analysis, I stated that I believed Philip Morris to be fair priced to slightly over valued at the current time. So why would I make a purchase right now? Because I believe that over the long term, investors will do quite well buying great quality companies as long as they aren’t paying too high of a price. Yes I would have rather gotten a better price for my PM stock. However, I don’t believe that the company is too overvalued. I’m happy to being paying what I believe to be a fair price for the PM shares. Over the long run, I believe this investment should turn out just fine.
Philip Morris offers the most popular tobacco product in to over 180 countries. They are a global company that is very shareholder friendly. They are paying out an increasing dividend rate as well as buying and retiring outstanding shares. Not only did I invest in PM because I believe it to be a great company, but this purchase also gives my portfolio a little more diversification as I work up to the ultimate number of companies I would like to own.
I purchased my PM shares for a price of $87.18 per share. This gives me a starting dividend yield of 3.9% which I fully expect to grow annually.
Along with Philip Morris, I also decided to grab some shares of Altria (MO) which essentially is the U.S. domestic counterpart to Philip Morris International. Altria sells the top cigarette brand Marlboro here in the United States. Along with tobacco products, Altria is involved in the sale of wine and holds a 27% interest in beverage company SABMiller plc. SABMiller is one of the world’s leading brewers.
Altria is currently trading at a P/E around 17. Once again, I would have preferred getting my shares at a cheaper price (isn’t that always the case?) but am pleased with my current purchase because it gives me exposure to another great quality company in my portfolio. Altria has been growing dividends annually for 44 years. With this purchase of Altria, I now own 4 of the best tobacco companies in my portfolio.
I made my purchase of Altria shares at a price of $35.31 per share. This gives me a starting dividend yield of 4.99% which I fully expect to continue to increase year after year going forward.
CSX Corporation (CSX) is a railroad transportation company. CSX has an approximate 21,000 mile railway network which it operates in 23 states east of the Mississippi River, Washington D.C. and the Canadian provinces Ontario and Quebec. CSX principal freight includes coal, fertilizer, chemicals, automobiles, agricultural products and intermodal cargo.
CSX is currently trading at a P/E around 13. I believe this was a purchase at a fair to slightly undervalued price. CSX is one of the nations three leading railway companies of which I now own shares in two (Norfolk Southern and CSX). CSX has been paying out annually increasing dividends for 9 years in a row.
I purchased my CSX shares last week at a price of $22.93 per share. This gives me a starting dividend yield of 2.62%. I believe CSX will be a great addition to my portfolio offering me years of dividend growth going forward.
Chevron is the world’s fourth largest oil company. Oil is an in demand commodity of which demand is increasing worldwide. While there is push for more green energy sources, I don’t think I’m going to bet against oil companies anytime soon. Chevron has been going strong and paying shareholders a growing dividend rate for the past 25 years in a row.
This purchase of Chevron gives me exposure to my second big oil company in my portfolio (the first I bought was ConocoPhillips awhile back). Chevron is a shareholder friendly company returning value to shareholders in the form of dividend income and share repurchases. Chevron is recently trading at a P/E around 9. I believe this purchase of Chevron was at a great value and will turn out very well long term.
I purchased my shares of Chevron for $119.13 per share. This price gives me a starting dividend yield of 3.36%. I’ll enjoy collecting this dividend as it continues to grow in the upcoming years.
How about you?
I went on a bit of a buying streak this past week picking up four of the companies listed in my book 35 Top Dividend Growth Companies for my portfolio. Have you been making any purchases lately or do you have any buys in your upcoming future? Share with us in the comments below.