I'm sure every dividend investor is aware of the current sale on consumer staples and the market in general. I personally believe that their is no better time to purchase into companies offering a solid growing dividend that has proven the test of time, a bullet proof balance sheet and a wide consumer moat offering product longevity.
buying companies near 52 week lows is like walking into your favorite store and purchasing as many on sale items as you possibly can. Making purchases at lower stock prices also offers some amazing benefits to long term dividend growth investors.
the first thing that comes to mind is increased dividend yield. The lower the stock price drops, the higher the yield goes up. This one is a no brainier in my book as it instantly makes purchasing into the position more valuable for the long haul as your locking in a higher yield on your money.
Secondly, it gives investors a hedge against risk. Typically when companies are near 52 week lows they don't drop to much lower. I understand in some situations they do. I can think of one such situation where a company extended loses beyond 52 week lows which was my holding in Dominion Energy (D). The company extended loses due to investor concern around the SCG acquisition and the market taking a turn against utility/energy companies in general. The metrics of this company did not change what so ever and I knew what I was purchasing into. After I took a -12% hit on my original position I bought more. Why not lock in an even better yield and have an even better risk protection on my assets?
The market has finally melted away from it's 52 week highs which has created a lot of buying opportunities for solid dividend aristiocrats and dividend growth stocks in general. I've been scooping up as many as I can with every dollar of capital I'm able to shovel into the market. I've made some great new purchases and without further ado....
- I purchased 2 more shares of MMM. Outstanding company near 52 week low. Sporting a fantastic 5 year DGR of 16.4%, a 59% payout ratio, increasing dividends since 1959 and a 2.49% yield.
- I added 4 more PG. Another dividend monster offering up a 3.83% yield, a 5 year DGR of 4.9, payout ratio at 73% and increased dividend payouts since 1957.
- I added 2 more shares to my KMB position. Bread and butter company rocking a 3.74% yield, 77% payout ratio, 5 year DGR of 5.2%, and increasing dividends since 1973
- last but not least I added 4 more shares to my position in MO. MO had an amazing quarter but took a beating nonetheless as cigarette sales have declined over last years numbers. Smokeless wasn't as good as investors were expecting and PM took a massive hit which had a ripple effect in the sector. yield is at 4.69%, payout ratio is at 47%, 5 year DGR is at 8.4% and it has been increasing dividends since 2009. This was the only non dividend aristocrat I added to but I'm loving this current value play.
Respectively all these purchases added $32.21 bringing my new annual Total to $3,377.68!
This blows my mind as I remember just passing $3,000 not to long ago! I'm slowly headed towards the next milestone at $4,000 and it's really helping with all these 52 week low companies I've been scooping up!
Investing is a learning process and I'm still learning so much day after day. It's very important to be aware of the investments your making and what growth rate a company is offering. After all, this is the secret to growing that passive income snowball.