Adding power to my portfolio with AEP

March toward $1,000,000: Week 10 (Oct. 1-5)

week10

If you’ve perused my last handful of posts, you know I’m on a diversification kick right now. I don’t have any desire to get back to the 150-position portfolio I had back when I decided to sell everything, pay down debt and start over, but I do want to establish a well-diversified basket of stocks, maybe 30 or so, to grow for the next couple decades.

I think I’ve done a pretty solid job so far, but, when trying to figure out what I wanted to buy this past week, I noticed I didn’t have any utilities in my portfolio. That had to change … and it did.

This Week’s Purchase: American Electric Power

I bought a share of American Electric Power (AEP), my current electric utility here in Ohio, for $70.35.

It’s not exactly cheap, but I think I can deal with its 18.38 P/E ratio. I’m more of a fan of the company’s 3.45% dividend yield anyway. It pays $2.48 a share per year, which brings my current projected annual income to $94.92.

AEP raised its dividend each of the last eight years at an average rate of about 5%.

Now that I have my utility – a company I feel good about – I only need something from the Basic Materials and Energy sectors to pretty much have all my bases covered. I’m thinking Phillips 66 (PSX) for energy and Air Products & Chemicals (APD) for materials, but we’ll see. Maybe one of those will even be Week 11’s purchase.

This Week’s Dividend: FedEx

FedEx (FDX) passed along a cool $0.65 for the one share I own this week. When reinvested, that shiny new $0.65 of purchasing power netted me another 0.00268 shares. It’s an almost minuscule amount, but that reinvestment bumped the position’s projected forward annual income from $2.60 to $2.61.

I know, I know … it’s only a cent. It’s also a shining example of compounding, or my money making more money without me having to do a thing.

I’ve you’ve been following my march for a bit, you know I like to post about small, incremental gains so I can refer back to them when things really start to ramp up. It’s a marathon, not a sprint, people. Every dividend, no matter how small, will add up in the end.

In Case You Missed It

Here are links to the last five weeks of my march:

Week 9, Weeks 7-8, Week 6, Week 5

Stats (Through 10 Weeks)

Portfolio Value: $4,649.31

Overall Gain/Loss: +$67.09

Estimated Annual Income: $94.92 (+$2.49 in the past week)

Total Number of Positions: 19 (+1 in the past week)

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