Purchased More Philip Morris

PM Logo

PMI Logo


A week or so ago I decided that if the price dropped sufficiently to get me a 4.5% dividend yield I was going to double my Philip Morris position.  Given the high yield on PM I have determined I would prefer to have it in an IRA account rather than a regular brokerage, so I set my limit order accordingly for my traditional IRA at $83.57.

Today, in a general downswing of the markets, PM dropped far enough that my order triggered.  I have thus added 30 shares of Philip Morris to my IRA account.

Purchase of 30 shares of PM at $83.57, for a cost basis of 2,507.10. Dividend yield at time of purchase is 4.50%. Dividend Reinvestment enabled. Initial dividend income $112.8 annually.

The action doesn’t end here however!  I also dumped the PM I had in my brokerage – 28+ shares – for $2325.64. I then purchased another 30 shares (I like buying in $2500 chunks) in the IRA.  I did have to cancel a limit order I had set for DPS to free up tentatively committed funds, but I really do like PM at this price.  Thus…

Purchase of 30 shares of PM at $83.06, for a cost basis of 2,491.80. Dividend yield at time of purchase is 4.53%. Dividend Reinvestment enabled. Initial dividend income $112.8 annually.

I am pretty confident that PM will be a solid investment in the long term.  For now I think it is suffering mainly from the strong US dollar which is really casting earnings in an unflattering light.  Eventually there will be a earnings headwind versus a tailwind for Philip Morris, and I fully expect to benefit from that at some point in the future.

In summary, my entire Philip Morris investment is now in an IRA account.   This means I can reinvest the dividends without owing the IRA a cut until withdrawal.  At a yield of 4.5 percent every bit of relief helps!

Position is now 60 shares of PM at an average price of $83.32, cost basis of 4,998,90. Dividend income as of today $225.6 annually.

 

Completion of KO Position

KO Logo

KO Logo

After failing to purchase NSRGY earlier today, I instead used a portion of my funds to complete my position in Coca Cola. I needed to purchase a little over a thousand dollars’ worth to achieve my desired cost basis of $2500.

While KO was a little cheaper earlier in the week, I am content with my price of $38.62 for 37 additional shares.  This gave me a very slight ‘averaging down’ in the price per share of my whole position – bringing it down to $39.52. Overall I believe this was a reasonable price to buy, but not a huge discount to fair value. I am confident that their business will continue to produce solid returns, and my position has a solid chance of being very lucrative in the long term.

My earlier Coke trades are documented first here, and second here.

With this soda company purchase complete, I will put my thoughts of buying to buy PEP (Pepsi) or DPS (Dr Pepper) on the back burner.  While they appear reasonably valued, I would like to diversify my portfolio into some other sectors with my next few purchases.

Overall position is 64 shares of KO at $39.52, for a cost basis of 2529.28.  Overall dividend yield at time of completion of position is 2.83%. Dividend Reinvestment enabled. Initial dividend income $71.68 annually.

UPDATE – added to KO position!