I started the Portfolio in Action series in order to show my investment process. These are the real trades I make in my personal dividend growth stock portfolio. I want to be open with my readers about all of my trades so that you can follow me on my journey, learn from how I go about investing and offer any advice you may have to help me make better investing decisions.
My goals for 2013 included investing at least $8,000 into new stocks. I like to make purchases of at least $1,000 a trade so that means I’ll probably make around 8 purchases this year. Today I made my first two purchases of dividend growth stocks in 2013. I had intentions of making initial purchases in new companies that I don’t currently have in my portfolio in order to diversify my portfolio a little better. However, I felt that two great opportunities presented themselves in a couple companies I already own and decided to take advantage and add to my positions.
Purchased Aflac (AFL)
One of my favorite companies that I own is Aflac. Today Aflac announced 4th quarter earnings which were an increase year over year and a good finish to fiscal year 2012. I am unclear on the reasoning but after the good earnings announcement shares of AFL traded down around 5% today. I took advantage to make another purchase in this company that has increased their dividends annually for 30 years. Aflac is currently trading at a P/E of around 8.4. I believe the market is valuing AFL lower than other stocks because of uncertain risks in Aflac’s investment portfolio as well as a weakening of the Japanese Yen which is where Aflac earns a large portion of their earnings. I haven’t done an analysis of AFL on my site yet but you can read a good recent analysis of Aflac here at Dividend Growth Stocks. Currently Aflac pays $0.35 per quarter in dividends for a $1.40 annual amount. The current dividend yield is at 2.6%.
Purchased ConocoPhillips (COP)
I also decided to make another purchase in ConocoPhillips. COP was one of the first stocks I purchased back when I started investing in dividend growth stocks. Originally when I started buying dividend stocks I wasn’t concerned about making purchases with at least $1,000. So my first purchase was only around $500 worth and I decided to make a new purchase in COP in order to increase my position size. COP did a spinoff last year of Phillips 66. For me this makes it a hard company to currently analyze. When I look at the financials on the company in a ValueLine report or a Standard & Poor’s report I’m not sure if they have been adjusted for this spin off or not. So I didn’t do a complete current analysis of COP before this purchase. I based my current buying decision off of the higher current dividend yield compared to other leading oil companies, the low P/E ratio under 10 and a recent decrease in the stock price that I felt offered a good opportunity to add to my position. I may regret this decision but I have a feeling it will work out in the long term. COP has a history of annually increasing dividends for 12 years in a row. Currently they have a dividend yield of around 4.6%. This will increase the overall yield of my portfolio and give me more exposure to the oil industry which I feel can only go up over time.
I’m excited about both of my purchases this month. I plan on owning both of these companies for the long term and feel they will perform well over time. The next purchases I make will be in completely new companies so that I can add to the diversification of my overall portfolio.
What are your thoughts on the two companies I purchased? Do you own COP or AFL?
Disclosure: I am long AFL and COP.