Today’s purchase: another share of CVS

I apologize if I sound like a broken record, but I picked up another share of CVS today. It’s the second share of the company I’ve added to my Dividend Farm in the last nine days. I paid $66.83 for today’s, $67.26 a little over a week ago and, well, if it keeps getting cheaper I’m going to keep adding.

My position is up to eight shares at an average price of $74.78. With an equity value of $536.40, the position makes up about 3% of my portfolio.

I pulled the trigger on CVS for two reasons: the numbers and the need. Let me explain.

The numbers

The numbers, for starters, are solid. Forget the fact the company has a solid 2.93% dividend yield and a divi payout ratio of just 31%. Forget the fact it has been raising its dividend for 14 straight years (at an average rate of 23.11% over the course of the last five) and forget the fact the company has been paying a dividend since 1916.

Those are all great. But wait … there’s more.

CVS has also been growing its earnings … by 102.52% last quarter verses the same quarter from the previous year. That’s a lot. Couple that with the fact the company has a super-low P/E ratio (10.60) and you have what looks like a solid value play.

I don’t know about you, but anytime I see growing dividend, growing earnings and sinking share price, I see opportunity.

The need

Now, let me talk about the need … I need to start adding to my February-May-August-November payers if I have any chance of evening out my monthly income a bit.

Luckily, I see lots of solid values among the companies with that schedule … companies like Procter & Gamble, Clorox and CVS. AT&T and Verizon pay quarterly dividends during those four months as well, so I could always add to either of those positions for a quick boost.

As of now, the forward annual dividend income from my January-April-July-October payers is north of $217. That’s a great number. My February-May-August-November payers, meanwhile, are set to earn me somewhere in the neighborhood of $190. Not quite as good. The March-June-September-December payers, in case you were wondering, should earn me about $206.

Now, I’ll be adding to all of those numbers as the year moves along, but if I don’t give my February-May-August-November payers a major boost, and soon, I won’t have any chance of growing my dividend income month over month. I know that’s not a huge deal in the grander scheme of things, but it’s something I told myself I would work toward this year, so I’m going to do what I can to make it happen.

Dividend income is extremely reliable, so the blueprint for smoothing out the see-saw of dividend income into a consistent upward trend is pretty cut and dry. I need to buy more February-May-August-November payers, and cut back on the others for a bit.

Make sense? Instead of earning $52 one month, $42 the next and $47 the month after that, as will be the case if I don’t change a thing, I’m looking to eventually get to a point where I’ll earn $50 one month, $55 the next, $60 after that and so on.

Today’s purchase helped me do that … but I still have work to do.

This week’s steps

Yesterday’s dividends, coupled with the combined $11.08 from Monday, brought my March total to $30.06 and my 2018 mark to $114.73.

Today’s purchase, meanwhile, was my first of the week.

Last week’s steps

I increased my forward annual income by $2 thanks to Monday’s purchase of CVS. Tuesday featured a dividend from Valero and Wednesday saw a $1.82 dividend from UPS hit my account. I also made a handful of purchases, scooping up shares of MDC, Procter & Gamble and Franklin Resources – which added $4.88 to my steadily growing forward annual dividend income total.

I made another couple purchases Thursday, adding shares of AT&T and Verizon to my Dividend Farm, and received $3.17 worth of dividend income from a combined four companies.

Finally, I earned $1.13 worth of dividends from Exxon and Yum! Brands on Friday. In all, I earned $6.92 of complete-passive income and boosted my forward annual dividend income by $11.24. Not a bad stretch if I do say so myself.

March on!

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