Recent Buy

I’m looking for companies that are fairly valued, have a decent dividend yield(3% to 6%) and have a fairly long history of paying dividends consistently for 10 years or more. However, there could be some cases for exceptionally good company or a strategic buy for a very long term.

These buy were probably brought forward from Mar, but, we will see what happens in Mar, especially if Mr Market is in good mood. That will pose a dilemma for me as I’m running low on cash but it is a first world problem as Dividend Mantra says 🙂

1) Johnson & Johnson (JNJ)

Johnson & Johnson is a consumer & healthcare company and much has been written about it by many over decades in fact. This company has 30 consecutive years of increasing adjusted earnings and 52 consecutive years of dividend increases.

JNJ has an amazing set of products in various segments: baby care, skin & hair care, wound care & topicals, oral heath care, OTC medicines like tylenol, motrin, benadryl, etc., nutritionals, vision care, medical devices and diagnostic products, prescription pharmaceutical products, that are used daily by millions world over.

JNJ is trading at very reasonable P/E ratio of 17.50 with a decent dividend yield of 2.81% and Market Cap of $278.85B. It traded at $109.49 at its 52 week high and currently at $99.62, is fairly valued in my opinion and a long term hold.

I bought JNJ at $101.25 on 02/02 and initiated 10 positions in taxable account. It will add $28.00 of passive income on an annual basis. I consider it as a superb addition to my Portfolio.

2) Southern Company (SO)

Southern Company and its subsidiaries are the leading US provider of clean, safe and affordable electric power across 4 states: Alabama Power, Georgia Power, Gulf Power in Florida and Mississippi Power as well as fiber optics and wireless communications: Southern Telecom and SouthernLINC Wireless.

SO serves more than 4.4 million customers, 46K megawatts of generating capacity and known for energy innovation like greener gasification technologies. It was founded in 1945 and is headquartered in Atlanta, Georgia.

SO is trading at P/E ratio of 20.90 with a healthy dividend yield of 4.58% and Market Cap of $41.28B. It traded at $53.16 at its 52 week high and currently at $45.88, it is almost 14% lower than its recent high. Note that there are still challenges out there for SO to negotiate related with new Kemper plant.

I bought SO at $48.00 on 02/09 and initiated 10 positions. It will add $21.00 of passive income on an annual basis that I do not have to earn and work for.

I also dripped some more positions in ABBV, CVX, COP, PM, IBM, VZ in my DRIP portfolio that I’ll be writing about in my upcoming Portfolio update.

Full Disclosure: Long on above mentioned securities.

Thanks for reading.

What do you think about these buy? Are you considering adding any one of them to your portfolio also.

12 thoughts on “Recent Buy

  1. I like the JNJ purchase, I will have a post coming out soon detailing my latest buy on that company. I’ve heard good things about SO but have never done research/bought any shares. I will have to look at that one further.

    1. Hi ADD,

      JNJ is a fantastic company and it will be great addition in your portfolio. Look forward to the post. I wanted to add few utilities to better balance my portfolios and SO fits nicely there. It is as steady as you can get.

      Thanks for stopping by!

  2. Nice pick up on JNJ – I have no knowledge of SO. I usually just pick up stocks with 20+ years of dividend growth (from dividend champions and contenders).

    1. Hi Evan,

      Could not agree more. JNJ dipped below $100 after a while and I decided to pull the trigger. I also like to buy dividend aristocrats and dividend kings as you do not need to worry about the daily, weekly, monthly or even yearly gyrations in price.

      Thanks for stopping by!

  3. Both JNJ and SO are in my portfolio and have been for many years. I see that JNJ is starting to make the rounds among the dividend bloggers as it fell to under $100. That seems be be a magic number for this stock in our current environment. I need to add more to my health sector in my portfolio but I’m still focused on my Canadian banks for now. Still have to pull the trigger in February though. Thanks for sharing.

    1. Hi DivHut,

      Glad to be a fellow shareholder in JNJ and SO. JNJ is making rounds in blogger community as it dipped below magic $100 to a more reasonable level. I’ve been watching since a long time and every time, I missed the boat and this time, I did not want to miss it and made the move. No question that JNJ is a great company that would be a nice addition in any investor’s portfolio. It has a decent dividends of 2.8% and is a steady grower, especially with its pharma division besides others.

      My portfolio also needs few more heathcare companies for better balance and watching: PFE, MRK, BMY, ABT, CELG, BDX, BIIB, and SNY. But, they have moved a lot since last year and half.

      None of my portfolios, own any financial companies and I believe that Canadian banks are a strong contender here. I’m also looking forward to add some of them like: The Bank of Nova Scotia, Toronto-Dominion Bank, Royal Bank of Canada, and few others.

      Thanks for stopping by!

    1. Hi Tawcan,

      You cannot go wrong with JNJ. In fact, I’ve been thinking of JNJ since a long time however, it kept going up-up and up. I was just waiting for it to come down to a reasonable level and made my move.

      Thanks for stopping by!

  4. As I mentioned elsewhere, soon dividend bloggers will the entire JNJ! 😉 Looks like a lot of us are buying it recently… not a surprise considering it’s a cheap one in regards to its high quality. Don’t know much about SO. Any idea what its growth rate looks like?

  5. Hi DivGuy,

    wow! A portfolio entirely in JNJ is an over-kill, to say the least 🙂 Putting all the eggs in one basket is never a good idea. Even I’m owning a little bit more REITs in my portfolios than my taste, especially if interest rates were to go up, its a dicey proposition. This was a calculated risk that I took, however, I’m also trying to diversify by investing in utilities, healthcare, financial, telecom and technology companies.

    I considered several utility companies like: ETR, ED, AVA, OKE, APU, D, ATO, DUK and few others but, finally, zeroed on an excellent utility in my opinion: SO. Being an utility, it has a decent growth rate of ~4% over a decade. I might add few more utilities in my portfolios, but, we will see.

    Thanks for stopping by!

  6. JNJ has been a stock I really want in my portfolio. I almost grabbed some this past month but ended up going after XOM and PG. It recently had a dip but is moving back up. I expect to have it in my portfolio by the end of 2015 whether or not it goes down any more.

    Good luck!

    1. Hi DD,

      Yeah. I’ve been also chasing JNJ when it was in 80’s or 90’s, thinking that it will go down quite a bit, it went a little down and then back up a lot. So, it is tough to chase the bottom of a great company like JNJ. This time when it went close to $100, I thought its opportune time before it went back in 120’s 🙂

      It is better to buy wonderful companies at fair price and I was OK to pay the premium for JNJ. You will not regret it.

      Thanks for stopping by and appreciate wishes!

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