Hey folks – this is a brief summary about my recent buying activities. The markets are trending up and I assume that many dividend growth investors are looking at new portfolio highs. Even though the S&P 500 gained 16% year-to-date, I believe it still a good time to buy stocks. With the start of the earnings season, we observe that many companies are doing better than expected. JPM, JNJ, HON or PEP, just to name a few. Taking into account the positive Q1 2019 reports, I have added to two existing positions. Furthermore, I have also initiated a position in a new holding. Without further ado, here are my recent acquisitions for this month:
1. JPMorgan Chase (JPM)
Dividend Yield: 2.85% | 5-yr. Dividend Growth Rate: 12.80% | FCF Payout Ratio: 33% | Consecutive Dividend Increases: 8 years
On April 15, I have purchased 10 shares of JPMorgan Chase (JPM) for a total investment of €993.44 ($1,120.55). This purchase adds 10 shares to my existing position.
JPM started 2019 on a strong footing, beating EPS and revenue expectations. Out of the four big US banks, JPM reported the strongest Q1 results by far. Net income of $9.18 Bil. grew by 5.4% compared to Q1 2018. Almost all segments show solid gains. In Consumer & Community Banking, average core loans rose 4%. Revenues were up 4%, while expenses were only up 2%. EPS growth was still in the double digits, coming in at 12%. This bank simply keeps on firing on all cylinders.
We have heard a lot of recession talks recently. However, since banks keep on doing quite well, the fear of an economic downturn might be exaggerated. This is what Jamie Dimon (CEO of JPMorgan) said about the risk of an upcoming recession: “If you look at the American economy, the consumer is in good shape, balance sheets are in good shape, people are going back to the workforce, companies have plenty of capital […]. It could go on for years. There’s no law that says it has to stop“. There is also no law that says JPM has to slow down going forward. I remain bullish on this well-managed US bank.
2. Johnson & Johnson (JNJ)
Dividend Yield: 2.62% | 5-yr. Dividend Growth Rate: 6.40% | FCF Payout Ratio: 51% | Consecutive Dividend Increases: 56 years
On April 16, following a good earnings report, I have also added to my Johnson & Johnson (JNJ) stake by buying 8 shares for a total investment of €984.19 ($1,112.13).
JNJ is my all time favorite stock. Over the course of the past four years, I didn’t hesitate to average up on JNJ. It’s just a great company and only one of two stocks in the investing world that has a triple A rating with S&P (MSFT is the other one). When such a company announces that it is doing better than expected, I want to own more of it. Simple as that. With this purchase, JNJ is my largest position now – representing 7.50% of the total portfolio value.
3. Becton, Dickinson and Co (BDX)
Dividend Yield: 1.37% | 5-yr. Dividend Growth Rate: 8.30% | FCF Payout Ratio: 47% | Consecutive Dividend Increases: 47 years
On April 17, I have purchased 6 shares of Becton, Dickinson (BDX) for a total investment of €1,193.99 ($1,349.20). BDX is a new position in my DGI portfolio.
Becton, Dickinson is the world’s largest manufacturer and distributor of medical-surgical products, such as needles, syringes, and sharps-disposal units. It’s a best in class business that offers appealing growth prospects. My purchase of BDX was not initiated by an earnings announcement (such in case of JNJ and JPM). I bought BDX when its share price dropped by 7% due to some political uncertainties and concerns regarding the healthcare reform. On April 17, the whole health care sector took a hit. It wasn’t anything company related. And when a high-quality business is being punished because the whole sector is being punished, I’m right here, ready to pull the buy trigger.
April has been quite a busy month. The start of the earnings season served a good opportunity to invest in two businesses that continue to show strength and beat expectations (JPM and JNJ). With the purchase of BDX, I own one more quality company from the defensive sector. So much about the buying activity. However, there was also some selling activity involved in this month. I exited two positions and will elaborate more on it in my next portfolio update next week.