First Two Purchases of 2019

Hi everyone thank you for stopping by today! Today as the title of the post tells you I will be telling you about the first two purchases I made this year. Before I do this I need to mention a change I made to my portfolio and why I chose the sectors that these stocks are in. In my January 2019 Dividend Income post I mentioned that I sold two stocks Corus Entertainment and ZCL Composites Inc. this obviously gave me some money to spend in my TFSA account. In my RRSP I held the BMO International Dividend ETF well I decided to sell it and use the funds in my TFSA to buy the exact same amount of shares. I did this because this now allowed me to have cash in my RRSP account, and allowed me to buy US stocks.

At the beginning of the year I decided to review my portfolio to see what sectors I am invested in. In doing this I seen areas where I need to stop investing, and areas where I need to increase my investments.  I found that Health Care, Consumer Defensive, Industrial and Tech are my weakest sectors and where I’m going to hopefully invest my money this year.

With that said my two purchases were in the health care and industrial sectors. Here is my first buy.

abbvie

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).

(Source: RBC Direct Investing)

AbbVie has seen a decline in it’s share price since their last earnings release in January. The reason why is concern about their drug Humira as European generic drug competitors have eaten into it’s sales. Back in December I purchased 38 shares at a price of $87.41, so when I seen the price drop to under $80 I looked at it as a good buying opportunity and a chance to lower my costs.

On Feb 4th I purchased another 22 shares at a price of $79.93, this lowers my overall costs to $84.67. AbbVie pays a quarterly dividend of $1.07 and with this purchase my income will increase $23.54 quarterly and $94.16 annually.

 

My second purchase is a new position for me and it is an industrial stock. I have been looking at this stock for awhile now and believe it is positioned to do well over the long term. The stock is Lockheed Martin.

sacl_lmt_lockheed_martin_logo-e1514654491275 Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

(Source: RBC Direct Investing)

I have wanted to buy a stock is in the defence industry for awhile now as America has the biggest defence budget in the world and I don’t see that changing anytime soon. Lockheed Martin is a big player in the defence world, it currently has a $130.5 billion backlog in orders.

Lockheed has four business segments and their 2018 sales were as follows:

  1. Aeronautics $21.2 Billion
  2. Rotary & Mission Systems $14.3 Billion
  3. Space $9.8 Billion
  4. Missiles & Fire Control $8.5 Billion

 

According to Morningstar Lockheed Martin is currently undervalued and has a fair value of $324.79.

On Feb 4th I purchased 8 shares at a cost of $291.12 per share. Lockheed pays a quarterly dividend of $2.20 and with this buy my income will increase $17.60 quarterly and  $70.40 annually.

Well folks so what do you think of my purchases? Please feel free to comment below.

Thanks for reading

Matthew

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9 thoughts on “First Two Purchases of 2019

  1. nice Matt

    great pickup with abbvie. If I had usd id be adding to my position.

    Lmt I dont know much about their financials but the company has a solid moat and the usa will keep feeding them business for sure!

    keep stacking those divs.
    cheers

    Liked by 1 person

    1. Thanks Rob I hear ya about AbbVie and the US will definitely keep sending LMT business. LMT has the F-35 fighter that has a huge backlog at the moment and countries continue to purchase.

      Like

  2. Matt,
    I’m right there with you about ABBV. I added shares and have a purchase article coming out shortly for it 🙂 LMT is one of Lanny’s first holdings and I haven’t even considered it as the price continues to grow. Great company, strong DGR. You’ll like that investment for a while!

    Bert

    Liked by 2 people

    1. Hey Doug I hear ya. I got my first dividend from them as well today. I want it to stay around this range as well. I might aim for a 100 shares as well I haven’t made up my mind yet. Thanks for reading the post!

      Like

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