The Current Market Situation
During bull markets, investors look back at previous market crashes and say: ” What a wonderful buying opportunity that was”. However, when the market is crashing and you are in the eye of the storm, it is very hard to see it that way. The negative news flow and the uncertainty can make even the best investors panic. As investors, the discipline and resolve shown during times like these is what contributes to positive future results. I’ve made 4 stock buys so far during this market crash. I am confident in the future long-term prospects of each of those companies.
You can get the 13-Step Checklist that I use for analysing dividend investments HERE.
My investing success is measured by dividend income received. Those purchases have added around 7% to my estimated dividend income.
My market crash stock buys so far
#1 United Parcel Service
UPS is a critical part of the infrastructure even now as it delivers goods to people that order online. I expect them to suffer in their Business-to-Business segment but the Business-to-Consumer package deliveries will continue to operate. They have an extremely wide moat due to the large fleet of planes and delivery trucks that would be very hard for a competitor to replicate.
I purchased shares in UPS on 27th of February at around $90 per share. The dividend yield on my investment is just under 4.5%.
#2 Broadcom
You can read my analysis on Broadcom here.
Broadcom stock has declined significantly further since the time of my purchase. This makes it a candidate for further investment at this point in time. I initiated a position in AVGO on the 10th of March at $250 per share. My yield on this dividend investment is around 5.2%.
If I liked this investment at $250 per share, you can only guess how I feel about it at $185 per share:)
#3 Starbucks
Starbucks is one of the iconic brands that has not been spared in this market selloff. The stock price has declined from a high of almost $100 per share to $55 per share. Understandably so, as the company’s business is severely disrupted due to closed locations. However, as a long-term investor I am confident in Starbucks business. In China 90% of SBUX stores are already open and in the US the delivery and drive-through locations are still operational. I was also pleased to see that Starbucks authorized a buyback program for 40 million shares at current low valuations. This is a strong sign of management’s confidence. Check out the CEO’s interview with Jim Cramer discussing the current situation here.
I finally added SBUX to my portfolio at a price of $58.55 per share. At that purchase price, SBUX is yielding 2.8%.
#4 Cisco
Cisco is a company that I’ve had my eye on for a while. The company is a global tech conglomerate with business segments such as IT infrastructure, networking and cybersecurity solutions. One segment of Cisco’s business that is doing well in spite of the coronavirus pandemic, is Webex. It’s a platform for video conferencing and online meetings. With many people working remotely right now, it is seeing a lot of demand right now. CEO Chuck Robbins said that the platform is seeing record usage right now. With Cisco moving towards a more subscription-based model lately, the revenues might hold up a little better as well.
I bought shares of CSCO at just under $35 per share. Yield at the time of purchase was 4.1%.
Summary
Through thick and thin, I am sticking to my investment plan of buying undervalued dividend growth stocks. I am happy to add those 4 companies to my dividend portfolio. I expect those purchases to pay me growing dividends for years to come and help me achieve my investing goal. My ultimate financial goal is to live off dividend income.
Disclaimer: I am long ALL STOCKS MENTIONED IN THIS ARTICLE. This is NOT a recommendation to buy or sell any shares. You can lose a part of or all your invested capital. I am not responsible for the accuracy of any of the figures presented in the article. I am not a financial professional of any kind. Any stock transactions or analysis published should NOT be considered to be investing recommendations. Before making any investing or financial decisions, contact an appropriate professional. This website should be viewed for entertainment purposes only.
