Bought: Pfizer (ticker: PFE)
As normally happens during the end of the month / beginning of the month, the portfolio generates a surge of income, so I found I had a little extra cash. After a late day rally yesterday pushing the Dow (ticker: ^DJI) up a little over 120 point, the market is down today, about 200+ points as I write this. With this abrupt sell-off I thought today might be a good day to put some of that new found cash back to work.
When I started the portfolio back in 2008, one of my main objectives was to search out secure, long-term dividend paying companies. As the portfolio grew over several years, I moved some money into slightly riskier stocks with a little higher yield, such as World Wrestling Entertainment (ticker: WWE). When I buy a stock like WWE I know that there is a risk the dividend could be cut or eliminated, luckily in the case of WWE, it was only recently cut, not canceled.
Now as the market and the economy as a whole is showing signs of slowing, my intention is to move back towards large-cap type stocks that may offer a more secure dividend yield. Since no one knows the future, my purchases as based on past performance and as such, even choosing to put money in so-called “safe” large-cap stocks may also backfire – but that’s part of the risk of investing.
Today I decided to look for a large-cap stock that I did not already own, preferably with an annualized yield above 3%. CNBC.com posted an article today with the current yields of the DOW components.
10 stocks have current yields above 3%:
- T – AT&T 5.45%
- VZ – Verizon 5.28%
- MRK – Merck 4.14%
- PFE – Pfizer 3.73%
- INTC – Intel 3.73%
- JNJ – Johnson & Johnson 3.39%
- KFT – Kraft Foods 3.32%
- PG – Proctor & Gamble 3.13%
- DD – DuPont 3.08%
- GE – General Electric 3.05%
After reviewing each of these stocks and eliminating those that are already in the portfolio, I chose to pickup 15 shares of Pfizer (ticker: PFE). Because the market is so bumpy right now, it’s hard to determine whether to hold off or to buy now – although ultimately the objective of the portfolio is income, so as long as I have additional cash to deploy should the market move lower, I am ok with deploying a small amount now on today’s pull-back.