This is my first stock sale in at least couple of years – the first one since I started this blog (I had to add a new post category to file this post).
I had purchased Baxter (BAX) shares in June 2014 prior to the spin-off. The stock was paying a quarterly dividend of $0.52/share which was a yield of about 2.83%. The stock also had an 8 year history of dividend increases at that time.
But after the spin-off of Baxalta (BXLT), the total combined dividend was slashed to $0.185/share. Lot of dividend investors exited the stock right away when the dividend plan was announced. I didn’t at that time. Both stocks even dropped in price after the spin-off. But recently, Shire announced a merger with BXLT which pushed the price of BXLT to over $40s. I thought of holding the stock because of the merger announcement. But the merger terms included partial cash payout and shares of Shire. Since I just held 25 shares of BXLT, I was going to get only 3 shares of Shire and the cash payout. I didn’t want to hold the position and hold 3 shares of Shire which was just too small. So I decided to sell both Baxter (BAX) and Baxlta (BXLT) last Friday.
Purchased BAX – 25 shares@ 73.50, Total = $1,844.50 after commission.
Sold BXLT – 25 @ 41.67, Net = $1,034.74 after commission.
Sold BAX – 25 @ 36.00, Net = 892.99 after commission.
There was negligible capital gains in the 18 months I held the stock. Since I was holding the stock in an IRA, there are no tax implications. I also received little over $61 in dividends during this time.
These sales reduced my projected annual dividends by $18.50 to $3,313.10