General Electric (GE) popped up by over 10% yesterday after announcing sale of its finance segments as well as selling off its real estate assets totaling over $26 Billion. GE also announced a massive buyback of $50 Billion buyback program through 2018 and expects to reduce the outstanding share count by about 20%. All this information caused the stock to reach a 52-week high of $28.68. Though this is just a pop due to investor frenzy and I expect the stock to drop a bit in the next few days/weeks, I am hoping that these are nice moves for the long-term performance of the stock.
GE was one of the very first stocks that I purchased when I started investing in 2009. It has been almost 6 years since I first purchased 30 shares of GE at $13.03 on 6/15/2009. I have been a fan of GE stock and since then I have added more shares often. My last purchase was for 100 shares at $25.00 on 1/27/2014. Right now I hold 375 shares in my accounts combined and based on Friday’s (4/10/2015) closing price of $28.51, my total value in GE stock exceeded $10,000 thus giving me my first $10K stock in my portfolio. GE currently pays a quarterly dividend of $0.23/share and yields a reasonable 3.23% even after the pop yesterday. GE has been increasing the dividend from 2009 after cutting it during the financial crisis.
But the journey has not been a great one. Long time investors in GE are still upset about the stock’s performance the last few years. The stock has not recovered the hits it took during the financial crisis and also not yet reached the dividend levels it had before the crisis. Continue reading
GE announced a new quarterly dividend of $0.23 up from $0.22. This represents a 4.5% increase compared to last year. The new dividend represents a yield of 3.69% based on Friday’s closing price of $24.89.
GE is the largest holding in my portfolio. I hold 375 shares and this increases by projected annual dividends by $15.00, from $330.00 to $345.00. The share price has been under pressure for a while now and it has been hovering between $24 and $27 for a long time. My last GE purchase was at $25 and seeing the current price below that is tempting. But I probably will not add since GE is already the largest in my portfolio and I would like to add to my other holdings to balance the weight.
Even though the dividend increase is not great, it is better than nothing. With the stock price under pressure, I was not sure if there would even be an increase.
A while back I had posted about Dividend Risks and the need for dividend diversification. Back then, 6 stocks (GE, MO, KMP, ARCP, AAPL and HPQ) contributed close to 60% of my total projected annual dividends at that time ($1,590.46) even though some of these stocks didn’t have a huge weight in my portfolio. This is little risky, since if one of the companies cuts or eliminates the dividend, it will be a huge hit to my potential annual dividends.
A course of action that I had planned was to increase the weight in stocks that I already held like PG, COP and GIS, but did not have lot of weight in my portfolio. But unfortunately I haven’t had a chance to increase my holdings in these stocks. But over the past few months, I did initiate positions in several new stocks which has helped reduce the reliance for potential dividends in the above stocks.
Based on the updated portfolio (updated as of 9/30/2014), these 6 stocks (GE, MO, KMP, ARCP, AAPL and HPQ) contribute just under 50% of my total projected dividend income of $2,039.58. This is in spite of recent dividend increases. So while 50% is still higher than I like it to be, I feel that it is good progress in 4 months. I will revisit this in the next few months and see where I stand.
Disclosure: Long on all stocks mentioned above.
There is nothing more satisfying than looking at the dividend income received for the month and realizing that you are taking small (but important) steps towards your goals. The first month of the quarter is the highest one for me.
While I was updating my portfolio page to reflect the prices as of end of May and also to include the dividend information, I noticed a big risk.
One of the things that is discussed a lot (in the dividend blogs I visit) is portfolio diversification – to make sure that all stocks are almost equal weight in the portfolio. But l have not seen any focus on dividend diversification. Dividend diversification is to make sure that all stocks provide almost equal projected dividend income.
I have been a big fan of GE ever since I started investing in 2009. One of my very first purchases was GE and I still hold onto those shares. GE is also on my highest value stock in my portfolio even before this purchase. But when the price dropped from the high of about $28.00 at the beginning of this year to about $25.00, I could not resist.
I purchased 100 shares of GE at $25.00 on 1/27/2014. GE currently pays a dividend of $0.22/share which amounts to an yield of 3.52%. This purchase adds $88.00 to my annual dividend going forward.
I believe GE is a solid dividend paying blue-chip company that has lots of growth ahead. GE doesn’t figure in various dividend lists since GE cut its dividend during the financial crisis. But since then, they have been growing dividends and I hope they continue to do so.