Thursday, February 19, 2015
Recent Buy, Feb. 2015
My Roth account is where I wanted to do some damage; however it had a much lower amount of saved capital sitting in it, so my buy was either going to be small or I was going to have to wait. So what happened was the cash in my taxable account was moved (in a roundabout way) to my Roth account so I could make this purchase.
As soon as the cash plan was hatched the next step was to check out what I was going to buy, especially since there was no recent planning done (thinking my next big buy would not be for a little while). Scanning both my watch lists and DGI blogs I settled upon a few ideas. Next step was to filter those ideas down to a few that made sense. My criteria included a P/E lower than 20, at least 5 years of dividend growth, a dividend yield of at least 1.5%, payout ratio, and a generally favorable outlook.
I came up with a few stocks I really liked, all of which are new positions. American Express (AXP), Chubb Corp (CB), Aflac (AFL), Norfolk Southern (NSC), and Chevron (CVX). As you can see the list is devoid of Canadian Banks, because I'd rather have them in my standard account and not lose any capitol to foreign taxes in a tax-deferred Roth setting.
I whittled out CVX because I already rely a lot on energy stocks, and at this time would like to continue diversification. All of the other stocks represent new sectors in my Roth. However, I chose based upon where I perceived growth to come the most in the future and that is what I want in my Roth.
I purchased 12 shares of CB for a total of $1213.56 (101.13 / share).
CB gives me that growth and the sector that I have been wanting to add for a while now - Insurance. The fundamentals are super solid, and so is their balance sheet. I expect CB will present a solid opportunity for income growth for many years to come. As it currently stands CB has: 1.98% yield, a 13.2 P/E Ratio, and a current payout ratio of 26%. All numbers I like for long term growth!
In addition, I also added 1 share of KO in my Loyal3 account. This joins the 4 shares of MSFT I have bought this month as well.
If I had more money lying around I'd have bought CVX, AXP, AFL, and NSC. My portfolio will be updated to reflect this at the end of the month. Let me know what you think of these moves!
- Dividend Gremlin