New Healthcare Position and Purchase of More Coca-Cola

I wanted to tell you guys about a couple of changes to my investing account.

You can follow my entire portfolio here: Investing Portfolio.

First off, I sold my remaining 69.2905 shares of Bristol-Myers Squibb Co (BMY) at $42.05. I originally bought this at around $27 for the purpose of buying 100 shares and then selling a covered call option. I did do that a few years ago and ended up making about $32. I’ve subsequently been reinvesting the dividends. I still feel BMY is a good investment and has a great initial dividend of 3.36%, if buying now. However, I felt it had been becoming a large percentage of my portfolio and had better use for the money elswhere. Also, its dividend growth rate was not quite as robust as what I want in the portfolio of a 30-year old guy with many years of compounding ahead.

I received $2.892.49 in cash for selling BMY and bought 30 shares of Johnson & Johnson (JNJ) at $86.23. This is a well known stock that I have been tracking in my watchlist. It is approximately 15% off its 52-week high and has dropped 3.4% since I added it to my watchlist on 8/23/2013. Given JNJ’s lower initial yield of 3.06% (compared with BMY’s 3.36%), I will be dropping from $97.01 in annual dividend from BMY to $79.20 with JNJ. However, I feel that I will more than make up for the difference with JNJ’s 7.6% 5-year dividend growth rate versus BMY’s 2.7% 5-year dividend growth rate. Gurufocus also calculates the 5-year yield on cost of BMY and JNJ at 3.77% and 4.18%, respectively.

Lastly, on 8/19/2013, I had purchased 44 shares of Coca-Cola (KO) at $38.749. This came out to around $1700, which is less than what I usually like to put into a single equity. I took the remaining cash from the BMY sale and added some cash from my paycheck and purchased an additional 39 shares of Coca-Cola at a price of $37.829. Coca-Cola has dropped slightly from my initial purchase, allowing me to dollar cost average down.

This latest purchase of KO raises my annual dividend by $43.68 to $92.96 per year.

In total my expected annual dividends have increased from $1505 to $1529.

Full disclosure: Long KO, JNJ

Company Symbol Shares Price Yield Expected Annual Dividend
Johnson & Johnson JNJ 30 $86.23 3.06% $79.20
The Coca-Cola Company KO 39 $37.829 2.96% $43.68

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