May 2014 – Stock Purchase (1)

I buy investments twice a month; around the first and third Tuesdays of each month. This is a way of dollar cost averaging and it also allows some minor tweaking on my individual stock weighting since I buy shares from the lowest performing sector in my portfolio at that point in time.

With that out of the way, read on to see my first purchase in May.

Stocks by Sector (5/4/2014)

So my individual stock portfolio looks like this

2014-05-P1-Portfolio

This is a screenshot from my portfolio excel file [1] which groups my stocks into 10 sectors. It shows their value relative to each other, the target value needed for equal weighting and highlights the lowest performing sectors in nice warm colors – red for 10th place, and orange for runners up in 8th & 9th place.

Individual Stock Purchases

My lowest value sector this time around is Utilities where I have GXP, LNT, AWR and VPU. I have $180 to invest this week so I’ll be buying GXP, LNT and AWR in proportional amounts to weight the sector more evenly.

Great Plains Energy [GXP] is a $4B public utility company in Missouri; its P/E ratio of 16.5 is lower than the industry average (20) and the S&P (18). Its debt-capital ratio has improved each year for the last three years and now stands at 65%. Likewise its dividend payout ratio has decreased from 66% to 54% over the same period, but it has also increased dividend payments each year for the last three years and it currently yields 3.45%.

Alliant Energy Corp [LNT] has increased its dividend for the last 8 years, and its dividend is $0.51 a share with a yield of 3.4%. Similar to GXP, its P/E ratio of 17.2 is lower than both the industry average and the S&P. LNT’s payout ratio is currently 59.5% and has been improving since 2011.

America States Water (AWR) has increased its dividend for the last 59 years and its dividend is $0.20 a share with a yield of 2.66%. Its dividend payout ratio increased to 47.2% from 45% last year, but debt-to-capital radio has improved in the last 3 years from 68% in 2010 to 62% in 2013. Its P/E ratio (18.9) is both higher than the industry average (14) and the S&P index (18).

My purchases

In summary, here’s what I’ll be buying this week.

$250 Vanguard High-Yield Dividend Fund (VHDYX)
$100 Vanguard Total International Stock Index Fund (VTIAX)
$125 Vanguard High-Yield Corporate Fund (VWHEX)
$180 Individual Stocks (GXP, LNT, AWR)

These investments should increase my yearly dividend income by about $20.

What are you buying this month?


Slow but sure moves the might of the gods.

~ Euripides, The Bacchae, circa 407 B.C.
Greek tragic dramatist (484 BC – 406 BC)

[1] I seriously love Excel and writing macros, especially now that I’ve found out how to download stock prices automatically.

0 thoughts on “May 2014 – Stock Purchase (1)”

    1. Hi HappyHealthy&Wealthy,

      You’re the first commenter on my blog – thank you for the nice comment!

      I’ve been struggling with how to keep my stock portfolio equally weighted among sectors, especially if I only made one stock purchase a month to keep commissions down. So I made the excel sheet to let me see what’s what and I’m using Sharebuilder to spread purchases around a little until I’m more or less balanced. The file is all automatic now so I can just open it up, press a button and it marks everything based on the latest prices from Yahoo.

      I’m over to check out your blog now; have a great day and thanks again!

    1. Hi HappyHealthy&Wealthy,
      I look forward to reading about your purchase 🙂 I must say I don’t know anything about CNP but utility companies are typically fairly safe as stocks go.

      What’s your general strategy for buying stocks? I’m looking to buy ~4 stocks in each of the 10 main sectors and then just adding to those positions over time. I do have 5 stocks in some sectors where the 5th is just for ‘fun’.

  1. Out of those purchases I happen to like AWR the best. It has been on my watch list for a long time just never pulled the trigger. Something about “boring” dividend payers that appeal to me. Also was considering WTR in the same sector.

    1. Hi DivHut,
      Thanks for stopping by and I appreciate your insight! I remember you mentioning AWR on your blog this month – they’ve increased dividends for the last 59 years. They’re a bit cheaper so far this month too after lower profits from their government contracts.

      Though I’m beginning to wonder about water companies in California in the long term – between droughts, fires and now possible earthquakes due to excessive water pumping (*). The smaller utility CTWS looks interesting but a little expensive on the surface and has a long dividend history too.

      (*) http://www.nbcnews.com/id/55175958#.U3VtsO8U-mQ

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