Purchase of GE with money from MCD
If you’ve been following my latest posts, I did go ahead and sell MCD. As a dividend growth investor, stagnant stocks aren’t usually what would cause me to sell. In fact, I might even buy more or at least hold, allowing the reinvested dividends to be even more effective.
It was MCD’s current business model and potential for difficulty with paying future dividends (at least in the short term) that forced my hand. I may repurchase MCD once I feel that they are financially a little stronger.
Since I’m not living on the dividend income yet, what really matters at this point is what combination of investments can provide the most total increase, including dividends and capital gains. With this recent purchase of GE, I feel that I’ve accomplished both those goals: a higher current dividend with more potential for dividend growth plus more potential for stock gains that will likely outpace the market.
On 4/9/2015, I sold all 31.8391 shares of MCD, taking a capital loss of $136.19. Total dividends collected amounted to $175.69. Immediately after selling MCD, I bought 130 shares of GE at 25.02/share. Given that GE has a slightly higher dividend than MCD, my net annual income actually increased by $11.35 to $4,240.26.
It looks like I just bought GE at the right time too because the very next day GE stock jumped up almost 11%. I’m glad I didn’t wait any longer!
I control 410 shares of GE at a current value of $11,698. My three largest holdings are now AAPL, GE, and V.
I am now invested in 29 companies. My online portfolio has been updated to reflect these changes.
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Forward 12-Month Dividends: $4,240.26 ($353.36/month).
Full disclosure: Long GE