Stock sell – Delta Airlines (DAL)

I’ve decided to sell my entire position in Delta Airlines. My sale of 11.47 shares won’t be shaking the market however!

I originally made some small purchases in DAL in my sharebuilder account last year. I was flying frequently at the time, even reaching Platinum Medallion status in their frequent flyer program which gained me lots of free first class upgrades and I liked the idea of owning companies whose products or services I was using regularly. When they first offered a dividend payment last year, I started buying stock and the yield at the time was about 1%.

In the year since then, the stock price has doubled so the current yield has halved to 0.6% or so since the dividend has remained constant. I’ve plotted the data in the chart below.

As much as I still like the company and their services, I’ve decided that I can do better on the current yield on cost that I’m getting and that an airline company probably is not going to offer the dividend yield, dividend growth and stability that I’m looking for. They may grow their dividend but I’m not willing to wait when there are other high quality companies offering higher current yields that I could purchase instead.

Date Price # YOC
6/11/13 18.60 1.0753 1.3
6/18/13 18.93 1.0563 1.3
6/25/13 17.80 1.1236 1.3
7/2/13 18.77 1.0653 1.3
7/9/13 19.28 1.0371 1.2
7/16/13 19.36 1.0333 1.2
8/13/13 19.21 1.5617 1.2
8/27/13 18.94 3.1679 1.3
11/26/13 28.99 0.3449 0.8

Updae:7/9/14 -I corrected the YOC column values which were wrong.

Average yield on cost: 1.25%
Total Cost Basis: $200
Market Value: $417.80
Sale Commission: $6.95
Gross Proceeds: $410
Net gain after tax: $137

This is an 87% return on my investment over a year which is fantastic and I’ll be looking to reinvest as soon as the money clears my account.

 

Quote of the day

Everyone lives by selling something.

0 thoughts on “Stock sell – Delta Airlines (DAL)”

  1. Nice ROI there in just over a year. Somehow, I never get myself to sell stocks that often. For example, I have C which I invested few years back…. Their dividend is negligible and there is not much capital appreciation too. But since I already have cash to be invested in, I don’t want to sell these positions and add more cash. Hopefully, by the end of this year, I clean out some of these poor performing non-dividend critical stocks.

    1. Hi DGJ,

      Yes I really don’t like selling stocks either! I’m a pack rat by nature and I like to hold onto things.

      In this case, I was earning about 1.3% from my original investment of $220, so about $2.75 a year. By selling and buying into a new position, I should be able to earn 3% on $400 or $12 a year…it would take a lot of dividend growth on Delta’s part to get to that same income level and I don’t see it happening for a long time. Had the price not appreciated significantly I would not have sold, but it seemed a good time to lock in the capital gain and increase annual income.

      There’s a good chart on Dividend Growth Investor which compares the trade-off between dividend yield and dividend growth.

      It’s always worth looking at the yield on cost if you are considering to sell, it’ll likely be higher than the current yield and YOC is the yield you’re actually earning on your investment: A higher stock price doesn’t change the number of shares you own or the dividend per share.

      Yes C’s dividend is quite low; I’d be more interested in JPM or WFC myself. I do own JPM shares. My current rules prevent me from buying a low dividend stock – it has to be > 2% for me to consider it.

      Thanks for stopping by and commenting!
      Best wishes!
      -DL

    1. Hi Henry,
      Lol! Yes, that’s true. The odds of that “if” are pretty small though so I’ll be sticking with dividends and this community 🙂

      Thanks for stopping by – enjoy your day!
      -DL

    1. Hi DM,
      Yes it was certainly a good run but I’d prefer to be in a more stable company with a better dividend record for the long term.
      Thanks for stopping by!
      -DL

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