Recent Transactions/Buys

This is an update about my recent transactions over the period of the past two months. Due to lack of time, I wasn’t able to do the summary until today. To make a long story short, I’m still in the process of increasing the share in defensive businesses. The goal is to bring it up to 50%. So all my recent transactions have been done in the context to meet this goal. In particular, I was looking to add to utilities, as this sector has been heavily underrepresented so far. Furthermore, I have decided to sell two cyclical stocks and put the proceeds in defensive investments. These are the transactions that I have made recently.

1) Sell Bank of America (BAC) – Buy Duke Energy (DUK)

I’m a big fan of the financial industry. Over the course of past years, I have been consistently growing this sector by investing in banks, credit card companies, asset management firms and insurers. At the end of September 2019, its share reached almost 20% of the total portfolio value. Finally, I have decided to reduce the exposure in this industry and put more focus on defense (Staples, Healthcare, Utilities).

With JPM and BAC, I had two similar American Banks in my portfolio. Both are mature and well-run financial institutions. However, I wanted to keep only one of them going forward. And as I slightly favor JPM over BAC, I kept JPM and sold out my BAC position at the end of September. Using the proceeds, I then have initiated a position in Duke Energy (DUK) acquiring 16 shares for a total investment of €1,413 ($1,555). This transaction has simultaneously increased my cash flow, as DUK offers a higher yield compared to BAC.

2) Sell Fuchs Petrolub (FUPEF) – Buy Coca-Cola (KO)

The second cyclical stock that I have decided to sell in order to boost the defensive stake is Fuchs Petrolub (FUPEF). Although FUPEF is one of the few German dividend contenders (17 consecutive years of dividend increases), I got less comfortable with its exposure to the automotive industry. It is the weak demand by this industry that continues to cause trouble for FUPEF. Admittedly, the Q3 results were better than expected. However, the figures are far away from being impressive. A brief overview: EBIT down by 17% YTD (EBIT outlook for 2019: -30% to – 20%), Free Cash Flow down by 37% YTD. Taking into account that FUPEF has been an underweight position in this portfolio, I decided to push the sell button in October.

The proceeds from this disposal were invested in Coca-Cola (KO). Why Coca-Cola? In October, KO came out with some solid Q3 figures – reporting organic growth of 5%. Finally, this beverage giant is showing us some organic growth. Fantastic! This was a good reason for me to add more shares and bring KO to a full position in this portfolio. I have executed a buy order acquiring 17 shares for a total investment of €830 ($918).

3) Recent Buy – Xcel Energy (XEL)

As mentioned, I’m still on a mission towards expanding the share of utilities. With Dominion Energy (D) and the recent purchase of Duke Energy (DUK), I’ve set a good foundation already. However, the building process isn’t finished yet. There are many reasons that justify my appetite for this sector. First, nearly all U.S. utilities have good three-year growth prospects. Second, they offer secure dividends and sound balance sheets. And last but not least, utilities have been outstripping the US equity market in recent years (see graph below). Sure, the valuation looks expensive based on historical levels. However, If interest rates keep heading toward 0%, utilities could keep rallying. There is no rule that states it has to stop.


When looking for utilities to add, I was particularly interested in those candidates with strong exposure to renewable energy. The reason: utilities with large renewable energy investment plans are expected to benefit from higher renewable energy growth forecasts. Xcel Energy (XEL) does meet these criteria very well. It is one of the largest renewable energy providers in the U.S. with about one quarter of its energy sales coming from renewable energy. On October 25, I have purchased 18 shares of Xcel Energy (XEL) for a total investment of €1,053 ($1,166).

4) Recent Buy – NextEra Energy (NEE)

You can’t speak about renewable energy without mentioning NextEra Energy (NEE). This company is a textbook example of success in this sector. Shares have doubled in four years, outperforming virtually every other stock in the industry. As a result, NEE became the world’s first utility with a market capitalization of more than $100 billion. Above all, NEE’s success is largely based on its clean-power business. According to Morningstar, NEE gives investors the best of both worlds: a secure dividend and industry-leading growth potential. If I can have a safe dividend AND strong growth potential at the same time, you won’t see me hesitating to open the door and step in. On November 6, I have purchased 5 shares of NextEra Energy (NEE) for a total investment of €1,037 ($1,146).


I focus on what I want to own, what I want to add, and just do it. Month after month after month, regardless of market conditions. It’s a slow process because I don’t have a lot of cash to work with. However, I simply keep buying and over time this is how you build a portfolio of size. A portfolio that is centered around strong defensive companies. Consumer staples, Healthcare, and Utilities. I want them to represent 50% of my portfolio. Once this is in place, I move on and set a new goal. This is a simple but yet effective way of building an equity portfolio. You don’t need to have a PhD in finance to succeed. Instead, be dumb enough to be smart enough by keeping things simple.


  1. Engineering Dividends November 20, 2019 at 10:02 pm

    Nice work making those portfolio adjustments, SF. I’m glad you decided to keep JPM in your battle of the banks.
    I don’t currently have any Utilities in my portfolio, but may look to add one in 2020. That sector should be represented as well, but I want to find one with good growth prospects. I briefly looked at NEE in the past. It definitely has provided a nice dividend and growth potential. Not an easy combination to find in that sector.

    1. Snugfortune November 21, 2019 at 9:51 am

      Thanks, ED!
      If growth is what you’re after in utilities, then NEE is indeed a good name.
      3-5Y EPS CAGR is expected to be 8%. Another interesting name that offers even higher growth prospects is AWK.
      3-5Y estimated EPS CAGR of 9%.

  2. PassiveCash November 21, 2019 at 3:44 pm

    Love NEE
    DUK has been beaten to a pulp, I haven’t dug in to see why…but it’s caught my eye.
    Good purchases, i’m sure this pushed you closer to your year end goal

    1. Snugfortune November 21, 2019 at 6:39 pm

      NEE: There’s really not much not to love about NEE
      DUK: I believe one major concern is linked to the capital raise to fund the Atlantic Coast Pipeline. Excerpt from M*: “Duke management surprised investors in mid-November with the announcement that Duke will issue $2.5 billion in equity in 2020 to fund the company’s portion of the $7.3 billion to $7.8 billion Atlantic Coast Pipeline.”
      DUK brings another 25 Mil. shares into the market. This is something that shareholders don’t like usually. EPS is affected as more shares are circulating. And we can expect the share price to depreciate due to the additional shares:
      725 Mil. Shares / (725 + 25 Million Shares) = 96.7%
      = 3.3% devaluation

  3. Dividend Diplomats November 22, 2019 at 3:52 am

    Excellent moves SF. I like the reshulling here. I have to look more into NEE. There is a lot to like about their push into renewable. Their name is everywhere!


    1. Snugfortune November 23, 2019 at 1:04 pm

      Agree, Bert! NEE is simply everywhere. I’m curious to see whether you will get on board here one day.

  4. PassiveCash November 22, 2019 at 5:10 am

    Right I did see that share offering, not a fan of having my ownership diluted. It will squeeze the payout ratio a bit which I think is somewhat high. It’s got a good yield though and I’m sure it’s relatively safe given it’s a regulated utility.

  5. desidividend November 23, 2019 at 3:39 pm

    I have been tracking NEE since last few days to see if i get a chance to Initiate a position in it.

    1. Snugfortune November 24, 2019 at 7:50 pm

      Hi Disidividend,
      I’ve been tracking NEE since years and have never managed to initiate a position. I’ve decided that it is high time to do it now. Better late than never 🙂

      1. desidividend November 25, 2019 at 1:32 am

        Thats very good decision,maybe monday


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