Jul 8, 2016

2 Recent Buys - CVS, RY

Opening a new position doesn't occur frequently for me nowadays. But now I have such an event to report since I have bought two shares of CVS Health Corporation (CVS). Additionally I have purchased two more shares of Royal Bank of Canada (RY.TO). Here are the details:


Buy in USD - CVS Health Corporation (CVS)
Trade Price: 94.75
Shares: 2
Commission: 0.35
Total: 189.85
Sector: Healthcare - Retail/Pharmacy
Yield: 1,8%
Payout Ratio: 37%
Dividend Increase Streak Years: 13
Annualized Dividend Growth 3-yr: 29,1%
P/E: 20,6
S&P Credit Rating: BBB+

Buy in CAD - Royal Bank of Canada (RY.TO)
Trade Price: 76.95
Shares: 2
Commission: 1.01
Total: 154.91
Sector: Financial - Banking
Yield: 4,2%
Payout Ratio: 49%
Dividend Increase Streak Years: 5
Annualized Dividend Growth 3-yr: 10,5%
P/E: 11,5
S&P Credit Rating: AA-

All right, buying more Royal Bank again before ex-dividend date. Nothing too surprising here. Those numbers are still tough to beat in today's market. With my U.S. dollars I was actually looking to buy more General Mills (GIS) and Procter & Gamble (PG). But the recent price development in both companies turned out to be too much for me. Carving new 52-week highs on top of their already high valuations; I had to look elsewhere.

The idea with GIS and PG was to boost August dividend income. I still wanted to buy something non-cyclical. I have been eyeing CVS Health from time to time, but that low yield was holding me back. Now it just appeared to be the best idea I can find in this situation. CVS is more than just pharmacy business. Walk-in medical clinics, pharmacy benefits manager (PBM), senior pharmacy care business and specialty pharmacy services. Good stuff here. The company is growing too and I'm expecting a decent dividend increase in December to compensate the low initial yield.

Thanks for reading. My Portfolio page has been updated to reflect these trades.

Disclosure: Long CVS, RY.TO, GIS, PG

4 comments:

  1. Like you, initiating a new position is a rare occurrence for me. I can understand your RY buy as you said in this environment the yield and value is pretty hard to beat. I'm still liking the Canadian banks but have throttled back my buys in the space as I'm getting positions that are becoming large. Thanks for sharing.

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    1. I guess our portfolios have matured to the point where new positions don't happen often.
      When a stock remains tempting for a long time, it's easy to become overweight there. So, I understand you're on the brake pedal with Canadian banks. At some point I must consider too how large positions I want there, but so far I still have room for additional buys in Bank of Nova Scotia and Royal Bank.
      Thanks for dropping by!

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  2. Great work on CVS...haven't followed it closely lately to know current value/undervalue stats, but think it is a very solid, long term play. Cool stuff!

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    1. Not surprisingly I wished higher yield, but otherwise I like CVS quite a lot here. Already looking forward to buying more shares. Thanks for stopping by PID!

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