Recently I have been optimizing my portfolio to align it with my goals. This resulted in a reallocation of capital from ETFs towards dividend growth stocks. As I’ve started to exit the ETFs early this month, it was a perfect opportunity to redeploy cash and take advantage of the ongoing stock market volatility. Without further ado, this were my recent stock purchases in December:
(1) Altria Group Inc. (MO)
MO is an excellent stock in my eyes. Fantastic management, wide-moat and great dividend growth (especially when considering the high dividend yield of more than 6%). Yes, Mo is facing challenges. The biggest one is the declining cigarette market. However I believe the management will do the right things to get the ship back on course. Recently MO invested $12.8 billion in Juul, taking a 35 percent stake in the e-cigarette maker. Whereas the market is critical about this move, I think it will help MO to diversify and rely less on traditional products.
Adding to my existing position, I have purchased 12 shares of Altria Group Inc. (MO) for a total investment of €537.24 ($612.45).
(2) Allianz SE (ALV)
Allianz is a leading financial services enterprise that offers insurance and asset-management services. ALV was the very first stock in my portfolio and I’m quite happy with holding it. There is also a lot to like about this business. ALV reported pretty good numbers for the third quarter of 2018. These included EUR 30.5 billion in revenue, an increase of just under 8.0%, and operating profit of EUR 3.0 billion, growth of 20%. Furthermore with interest rates trending higher, insurance companies should be able to benefit in such an environment.
Adding to my existing position, I have purchased 3 shares of Allianz SE (ALV) for a total investment of €523.74 ($597.06).
(3) General Dynamics Corp (GD)
When market volatility steps in, industrials are often punished more than other sectors. GD, a well-diversified defense constructor is a good example for that. The share price has pulled back more than 30% from the peak in the beginning of this year. But GD’s fundamentals didn’t change. I still look at a high-quality business that is trading at an even higher discount now. Reason enough to take advantage of the recent price drop and reduce my cost basis.
Adding to my existing position, I have purchased 4 shares of General Dynamics Corp (GD) for a total investment of €554.54 ($629.90).
(4) AT&T Inc (T)
No doubt about it, T is dealing with some challenging issues. Especially in times of rising interest rates, T’s excessive debt levels bring sweat to investors brow. But keep in mind that this dividend powerhouse offers a yield north of 7% and has a P/E ratio which is below 8. Despite the problems, T looks like a steal at current prices. According to Morningstar, AT&T is about 25% undervalued. Get paid and watch the big T overcoming its challenges.
Adding to my existing position, I have purchased 20 shares of AT&T Inc (T) for a total investment of €478.80 ($545.83).
(5) JPMorgan Chase & Co (JPM)
Looking at the financial industry, I have decided to pull the buy-trigger on JPMorgan Chase. JPM is the second bank holding in my portfolio and complements Bank of America (BAC), which I’ve acquired earlier in December (read more about it here). With economic slowdown on the horizon, the banking sector hasn’t been the first pick for investors lately. However US banks are in a quite good shape compared to previous years. JPM balance sheet looks strong and the equity Tier 1 ratio is well above regulatory minimums. Besides good core-business metrics, JPM offers a dividend yield of 3.3% and a low payout ratio of 37%.
I have purchased 18 shares of JPMorgan Chase & Co (JPM) for a total investment of €1,556.54 ($1,768.18).
(6) AbbVie Inc (ABBV)
I’ve been eyeing to purchase ABBV since a couple of months. However the share price has recovered quite well since the lows in the end of October. Therefore I had to be a little patient before finally taking a stake in this wonderful company in December. There are plenty of reasons why I selected ABBV to be the second healthcare holding in my portfolio. Very high on the list: the company’s approach on aggressively growing the dividend. Some numbers, just to get a feeling on how aggressive it is. ABBV has increased its payout by 10.9% for Q1 2018 and by 35.2% for the following Q2 2018. Plus the company has already announced to raise the quarterly dividend for Q1 2019 by a robust 11.5%. This is just outstanding! Meanwhile the stock offers a very attractive 5% dividend yield. Combine it with a modest payout ratio of about 50%, and you have a perfect dividend growth stock.
I have purchased 22 shares of AbbVie Inc (ABBV) for a total investment of €1,682.72 ($1,911.40).
All in all I have reallocated around 80% of total capital coming from the ETFs towards dividend growth stocks. Although there is some cash left, my intention was to invest a large portion immediately and not trying to time the market. In January share prices might fall even further or they might recover. We simply don’t know. Therefore I strongly believe that time in market is far more important than timing the market. Let’s see what the future holds for us. Happy investing to you all.