Recent Purchase of BMS and TGT

Today I sold shares of SCHA (Schwab’s Small Cap ETF). It was one of the first ones that I started buying since getting a paying job. And, it has performed incredibly. I sold my remaining 79.3063 shares for a capital gain of $1,192 on a cost basis of $2773. (I had previously sold portions of this investment to fund early purchases and locked in capital gains of $819 and $345 on a cost basis of $2205 and $1670, respectively.) These transactions all took place within my Roth IRA so there are no tax consequences.

SCHA paid a small dividend so this will reduce my annual dividend by about $70.

With the proceeds I purchased 50 shares of a small cap company called Bemis (BMS). This is a company from the state of Wisconsin which is a global supplier of flexible packaging and pressure sensitive label materials. Company profile on their site. Bemis pays an annual dividend of 2.66%, which brings in $52/year. I’ll have to keep a close eye on this one. Being a much smaller company than many others in my portfolio, it is a slightly more risky investment.

I also purchased a large cap company called Target (TGT). I had this company on my watchlist for quite some time. I thought it was fairly valued when I added it about a month ago but it has dropped slightly, giving it a lower price/earnings ratio of 15.57. They’ve also managed to raise dividends by 20.6% annualized over 5-years, while still maintaining a payout ratio of 30%. Walmart is also another great company, which actually probably has better exposure internationally than Target does right now. However, I bought Target mostly because if I personally was given the choice to buy something from Target or Walmart, I’d pick Target. Target also has a much smaller market cap ($40.7 billion vs WMT’s $243.8 billion)…maybe Target will be able to continue to grow faster than Walmart, especially when it starts expanding internationally.

My purchase of 31 shares of Target will bring in $53 of dividends per year.

With the contributions of BMS and TGT, my estimated annual dividend is now $1609 ($134.08/month).

My portfolio now includes 17 companies.

Company Symbol Shares Price Yield Expected Annual Dividend
Bemis Company Inc BMS 50 $39.16 2.67% $52.00
Target Corp TGT 31 $64.425 2.67% $53.32

Full disclosure: Long BMS, TGT

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