Financial Sector stocks – 4th November purchase

I’m back from my UK trip but way behind in my posts, so I’ll keep this update short:

In the last week of October, I added to my position in TROW with a Sharebuilder automatic purchase.

  • TROW – 3.6071 shares @ $83.17

Financial Sector stocks

As the name implies, Financial Sector stocks consists of banks, insurance companies and investment / wealth-management companies. In terms of Dividend Growth, it can be quite a volatile sector as even stable banks have been affected by worldwide financial events or bad accounting practices. Consequently only about a quarter of dividend paying companies in the Financial Sector have managed 5 years dividend growth; compared to over 69% of dividend paying stocks in the Utilities sector – see this post for other sectors.

The Financial sector was the lowest weighted in my Portfolio at the time of purchase, so I decided to add stocks from this sector.

My Dividend Stock portfolio as of 22-November 2014 showing Financials as the lowest weighted sector, followed by Utilities then Healthcare.
My Dividend Stock portfolio as of 22-November 2014 showing Financials as the lowest weighted sector, followed by Utilities then Healthcare.

Rationale

I hold four companies in this sector: JPM, AXP, TROW and CB.

With a yield of 1.1%, AXP didn’t meet my minimum dividend yield criteria of 2%, so it was excluded from the selection.
JPM has only managed a 4 year dividend growth history, so it’s likewise excluded.
At the time of purchase, CB’s dividend yield was also under 2% leaving TROW as the sole eligible stock meeting yield (barely) with 2.1%.

This purchase adds about $6 to my yearly dividend income, and my combined Sharebuilder purchases in November resulted in about $34 of projected yearly dividend income.

Full Disclosure: I’m long in JPM, CB, TROW and AXP.

Quote of the day

Those who stand at the threshold of life always waiting for the right time to change are like the man who stands at the bank of a river waiting for the water to pass so he can cross on dry land.

0 thoughts on “Financial Sector stocks – 4th November purchase”

    1. Hi M,

      Thanks! I had a great trip but it was too short of course! We’re going to plan out next visit earlier next year (and hopefully longer), maybe late summer, as some places we’d have liked to visit were closed for the year.

      Cheers!
      -DL

    1. Hey Henry,

      I am thinking about limiting my holdings in the financial sector because it’s prone to meltdowns, but I think the above three should be somewhat stable over the long term.

      Best wishes,
      -DL

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