Reallocation of Funds and New Purchase


This has been a busy week for me and I'm sure for everyone else. Every move I make in regards to my Independence Fund is made with careful thought and action. It doesn't always work out in the short term but the long term game is what I'm playing. 

I have been doing a lot of analysis on my portfolio and I have made some moves that I hope will benefit my Fund in long term.   

I was evaluating what It means to have a well diversified portfolio that is capable of pumping out sustained dividend growth while also maintaining a good yield for years to come.  It caused me to look hard at my holdings and make the decision to reallocated some of my holdings for what I presume is the better, 

On 12/21/16 I cashed out my position on Apple. I sold 13 shares @ $116.94 for a total value of $1,521.13. I made $58.68 off the sale. This affected my Annual dividend payout of my Independence Fund by -$29.64 bringing it down to $843.81 per year. 

Now I know a lot of people may ask them shelves why would I sell apple? The answer to that was very simple once I did some due diligence into my current holdings and how I could be making my capital work harder for me. 

I worked the numbers and Apple was only contributing to my yearly annual dividend payout of $29.64 per year. 

On 12/22/16 I purchased 79 shares of GME at the price of $26.36 per share. This has boosted my Independence Fund payout by an amazing $116.92 per year! This further boosts my annual expected Fund payout to $960.73 per year! 

GME was a very unexpected dividend company find for me. I was doing some research into new dividend funds and happen to fall upon this lovely gem and many more. One of the reasons I was so motivated to get into this stock is because of it's amazing dividend yield yet surprisingly low payout ratio! 

The stock has only been offering up dividend increases for the past 4 years straight but if the company continues to perform at the levels they currently are then we could see some really nice increases for a very good amount of time.

Now don't get me wrong, Apple is setting up to be an amazing dividend growth fund that will be paying out dividends for years to come. In my thought process though, the yield on apple is so low and they really haven't been offering the best payout increases that they truly could. Why would I keep my money in a fund only generating me 2% dividend yield that has a chance to go to 3% in a few years or transfer that money into a stock that is already pumping out a near 6% yield with plenty of head room to grow?

Here are some stats that make me love this company currently.

  • Dividend Yield 5.91%

  • Annualized Payout $1.48

  • Payout Ratio 39.8%

  • Dividend Growth 4 years

  • EPS $3.72

Now the company has only been paying out dividends for 4 years with an increase. If the company continues to generate the same amount of Earnings per share as it has and continues at managing to keep its payout level this low then Game Stop is shaping up to be one of the best dividend pumping machines I have seen. I haven't seen a company with a more stable high yield return in a very long time and I'm happy I found this when I could. 

I will definitely be following this company more closely then some of my others since I want to keep tabs on earnings and ensure that the dividend payout is sustained for years to come.