Since my last update, the market has continued to decline with the S&P 500 down 9% over the
last month.
Year to date, it’s down 13.76%.
There are countless examples of stocks down 40, 50, 60, 70, and even 90% over the last
year.
That leaves a lot of potential buying opportunities in todays market.
I actually sold one of my larger positions to fund $5,000 in new buys.
Additionally, I made an even larger move in my Roth IRA.
In this video, I’m going to explain my logic behind these transactions and analyze the
performance of my entire long-term dividend stock portfolio.
(intro vid)
My name is Zach and you should leave a like and subscribe to the channel if you enjoy
the video.
I just passed 100k subscribers and would like to thank everyone who’s been following my
YouTube journey.
The best is yet to come.
To celebrate this milestone, I’m going to give every viewer a coupon code for a 1 month
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This is the software I use throughout these updates to track my portfolio and dividend
income.
Also, it has a great research tool for analyzing stock financials.
Like your dividend stocks, the website will keep compounding, adding new features and
improving in quality with time.
The coupon code is ‘100K’ and applies to the monthly plan.
Select the plan and enter in the coupon code at checkout.
The code will remain valid for first time customers over the following week.
Link to DividendData.com is in the description and pinned comment.
Now, let’s dive into my portfolio.
My current dividend portfolio value is $103,484.
I’m up 20 thousand dollars overall, which is a 24.26% return on dollars invested.
This is down over $7k from my last update, where my total return was 30.8%.
There are 2 major changes since my last update.
First, AT&T officially spun out WarnerMedia and merged it with Discovery, forming the
new company Warner Bros Discovery.
I made an entire video explaining the news, but this is the current situation.
I have my readjusted AT&T position, which is now valued at $9,600, which is a total
return of -3%.
Also, the dividend has been reduced, which we’ll discuss later in the video.
Initally, when the transaction occurred I was in the green overall after many months
of being in the red.
However, WBD stock has tanked in recent weeks following the fall of Netflix, Disney, and
other media companies.
It’s now down 30%.
I think both stocks are good values and will continue to hold at current prices.
The second major change is that I sold all of my Kimberly-Clark stock.
I sold at a slight loss, netting me $6,207.
The logic behind this was that I saw many companies who I thought were a more attractive
opportunity.
These were higher quality stocks at cheaper combination of PE multiples and growth rates.
Kimberly-Clark is still a strong company that will be able to pay a growing dividend well
into the future.
They have good brands and I think the company will do fine long-term.
However, their product categories are competitive and it’s difficult to create pricing power
through differentiation.
This became obvious in these high inflation times, when the company fared far worse than
other consumer defensive stocks.
Procter & Gamble is diversified into higher margin products with better pricing power.
Coca-Cola and PepsiCo have much higher margin products with strong pricing power.
It became clear that Kimberly-Clark is weaker and I think is over priced relative to other
stocks in the market, given their low growth.
That said, KMB stock did increase after slightly improved earnings and raised guidance.
So I could have sold at a better price.
Yet, the company is still earning less from inflation and not projected to return close
to 2020 earnings until 2024.
This will likely mean slow dividend growth moving forward.
Slower growth companies do not deserve to trade at a premium valuation, especially with
so many higher growth stocks trading at a sizeable discount.
I could potentially buy back into KMB stock if it was much cheaper.
So that sale netted me $6,200 to reinvest in new stocks.
So far I’ve invested, around $5,000 of that, with $1,200 still in cash.
I bought 37 shares of Intel at a total cost of $1,699.66, giving me a cost per share of
$45.94.
These buys have a starting dividend yield of 3.18%.
Intel has is trading at a cheap trailing PE ratio of 9.
They have pretty high margins, especially when compared to a company like Kimberly-Clark.
They have a dominant position in semiconductor manufacturing, which is a growing industry.
However, they are investing heavily over the next couple of years, which will hurt their
short term earnings on paper.
They’re building out several new fabrication plants, creating a new foundry business, and
securing Intel as the dominant semiconductor manufacturer in the western world.
I’m bullish on the company over the next 5 years and think this a great entry point
to build a long-term position.
I’ll be buying more as the stock falls.
I purchased 8 shares of Disney at a total cost of $1,012.26, giving me a cost per share
of $126.53.
This is a company I’m very bullish on over the next decade.
Their dividend is currently suspended, but they’ve stated that dividends and share
repurchases are a part of their long-term capital allocation strategy.
The company is in a strong financial recovery from the pandemic and domestic parks have
now hit record profitability.
Earnings will continue to improve over the coming years.
All streaming and media stocks have seen dramatic valuation compression, driven by netflix subscriber
results and guidance.
In my opinion, many of these stocks are currently undervalued, such as Disney.
That said, they could continue to fall over the short term.
I recently made a video discussing all the recent political drama related to the stock.
Also, Disney reports earnings on May 11th, which I will be watching with great interest.
I bought 5 shares of T Rowe.
Price Group, at a total cost of $675.16, giving me a cost per share of $135.03.
I recently made a full stock review video on the company.
As a provider of mutual funds, the recent market downturn is leading to lower earnings
and higher outflows.
However, I’m using this as a buying opportunity as the stock is down 45% from it’s high.
This company is a dividend growth machine and my starting dividend yield is 3.55%.
I’ll be buying more on the dip.
I bought 2 shares of Microsoft at a total cost of $559.80, giving me a cost per share
of $279.90.
This is one of the best companies in the world and just reported terrific earnings.
Their azure cloud business is poised to fuel high growth over the next decade.
This is a core position of mine and I will continue to dollar cost average and buy dips.
My starting dividend yield on this purchase is 0.88%.
I bought 3 shares of 3M at a total cost of $437.45, giving me a cost per share of $145.82.
This industrial stock has reliable slow earnings and dividend growth.
It’s trading at a 14 PE and I bought my shares at a 4% starting dividend yield.
I bought 1 share of Visa at a cost of $207.77.
My starting dividend yield was 0.72%.
Visa operates the largest digital payment network and is an extremely scalable and high
margin businesses.
It has significant long-term growth ahead and the company just reported great earnings.
I’m looking to buy dips and dollar cost average overtime.
I bought 4 shares of Walgreens Boots Alliance at a total cost of $174.12, giving me a cost
per share of $43.54.
This gives me a starting dividend yield of 4.38%.
WBA is a consistent dividend grower and at a PE of 8 is too cheap to not add a few shares
to my position.
Finally, I purchased 1 share of Apple at a cost of $157.44.
I have a starting dividend yield of 0.58%.
Apple is one of the best companies in the world and one of my core positions.They just
reported great earnings.
I plan to dollar cost average and buy on dips.
So those are all my new buys in my dividend account.
I will continue to buy the dip on some of these stocks.
Also, I’ll be continually evaluating whether I’ll sell more stocks, depending on if the
market continues to dip.
However, this is not all my recent buying and selling.
If you stick around to the end of the video, I’ll share the change I made in my Roth
IRA, which is larger than all these transactions.
But first, let’s look at my dividend income.
In total, I’ve earned $5,373.44 in dividends since I started my account.
Year to date, I’ve earned $1,157.38.
My 3-month rolling average is $306.83.
This projects out to an estimated annual income of $3,682.
In April, I earned $232.45 in dividends.
This includes $12.93 from Coca-Cola, $57.36 from Kimberly-Clark, $5.32 from O, $46.72
from FRT, and $110.02 from Altria.
My upcoming dividends include $141.98 from AT&T.
This is 46.5% decrease from the previous dividend, which will be a large hit to my dividend income
over the short term.
Other notable dividends include $52.40 from EPD, $21.19 from Intel, and $134.35 from ExxonMobil.
Over this year, I expect my dividend income to stay relatively flat.
This is partly due to the dividend reduction of AT&T, but also a shift in my buying strategy
to focus on long-term dividend and earnings growth.
I’ve found that in today’s market many higher growth stocks are at more attractive
valuations.
Also, there is significant sector wide sell offs such as technology and media.
This is while many consumer defensive companies like Pepsico, Procter & Gamble, Costco, etc
trade at premium valuations.
It’s an interesting market right now where many stocks are trading at steep discounts,
while others seem to be heavily overvalued.
With that said, let’s discuss the major change I made in my Roth IRA.
I sold my T Rowe.
Price Health Sciences funds, ticker symbol PRHSX, netting $8,772.10.
I reinvested this money in order to buy 74 shares of Disney Stock at a cost per share
of $118.41.
Disney is currently at a price, where I feel extremely confident buying the stock long-term.
At current prices, the forward PE for 2022 is 25.15 and the analyst projected 2024 PE
is 16.78.
I think it will easily hit these numbers, as this is a return to pre-pandemic earnings.
In 2024, the streaming services are just estimated to be reaching profitability.
Over the decade following that, I think with high certainty those services will become
massively profitable.
As much as everyone has been trashing Netflix lately, they’ve already create a free cash
flow positive service with growing earnings.
I’m actually quite bullish on Netflix’s earnings growth over the next decade.
Not to mention the announced Dinsey+ ad-supported tier and the future monetization paths that
could be taken.
Additionally, the Disney parks division will continue to grow, becoming more profitable
than ever with recent changes.
I’m not even beginning to talk about the value of their brands and the countless other
avenues of monetization.
There are significant long-term growth drivers.
I think the company has proven to be innovative, adapting and improving with technology.
Disney has a wide economic moat and quality storytelling will always have large value.
I feel very comfortable with this allocation.
However, there are a lot of other companies I could have bought at a good value.
For example, I think Google, Netflix, Amazon, and Facebook are all great buys at current
prices.
On top of this, Media stocks in general are quite undervalued right now.
Paramount, Comcast, and Warner Bros Discovery all cheap very cheap with serious earnings.
Coming soon, per my recent poll of viewers, I’m going to analyze the streaming wars
and all companies involved.
Hit subscribe if you want to seet that!
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of like-minded investors.
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dividends coming in.
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