Investing

This is my (first?) buy for June 2017

So June is on its way so its time to buy some new stock(s). Since May is the month that the holiday allowance (“Vakantiegeld”) is added to your salary this gave me, after some discussion with Mrs. Robot, an additonal €250 for this month.

I’ve already had my eyes set on the healthcare sector last month, but ultimately decided to open up a position in Realty Income due to a dip in their share price (and now again, but I ignore it :)). So the deciscion was again between PFE and JNJ!

Although I don’t think you can go wrong with either stocks, I decided to go with…….PFE!

pfizer

P/E  Yield Track record Valuation
PFE 26.61 4.03 Blue-chip Near 52-wk low
JNJ 21.95 2.57 Aristocrat + King Near 52-wk high

Hmmm if I look at these basic fundamentals, JNJ is the safer choice were it not for the extremely high share price (overpriced?). Safety definetely comes with its price or so it seems.

Both companies have a solid financial base and pipeline so as stated before I don’t think there is a wrong choice here. I wish I would have started my DGI journey sooner so I might have bought JNJ at $111 in januari of this year.

I think this article offers some additional information about why I also went for PFE at this moment. I would like to add JNJ as well since its the safer stock on the long term (thanks to its diversification in consumer products next to being a pharmaceutical) but its trading at such a high valuation that I (think I) can get a better deal with the higher yield on PFE while waiting for the price to drop on JNJ.

So with this addition of 9 shares bought at $32,00 and a dividend of $0,32 this should provide me with an additional $5,76 in 2017. My annual forward income would increase with $11,52. Babysteps I know but we all have to start somewhere right?

So did you already buy something in June?

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11 thoughts on “This is my (first?) buy for June 2017

  1. I agree that PFE is the better choice at the moment. Although JNJ is well liked in the DGI community (and for good reason!) their valuation doesn’t make much sense at the moment. I want to add to JNJ again around 115, which may or may not happen.

    PFE looks good and might become of future buy for me as well. The only thing that concerns me slightly is their high pay-out ratio.

    Cheers,
    Tall Investing

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    1. Hi Tall,

      What level of payout ratio is acceptable for you? That being said, what sources are you using? For example: Dividend.com shows a payout ratio of 50,2%. Yahoo finance shows a 102,% which I agree is something thats not good on the long run.

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  2. Both are good. I own JNJ. Managed to buy in at lower then 20 P/E. Owning both looks a good diversification step as if one will outcompete other in L/T perspective you will still get out as a winner 🙂 This is why im also thinkibg abouy buyinh PFE. But their P/E look a bit overvalued 27. Yout buying bussines with bellow 4% profit… I dont know that looks a bit low. But maybe they have small temporary dip in earnings and their L/T acerage profit is something more. Either way good buy 🙂

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  3. Good job in picking these two great companies..

    I’m waiting for JNJ to dip as it is currently overvalued by about 17%. I’ll start buying more shares if the yield gets to 3% (my YOC is 3.5%). Though, it is such a high quality company that you can’t really go wrong buying it at any price as long as your are a long-term investor. It is one of the only two AAA credit rating companies in the entire US stock market.

    PFE is a great buy too, I was hoping to add more recently as the yield reached 4%, but I got a bit greedy and missed it. Now the stock has gone up a bit. Though still selling at a discount. I will wait till it comes done a bit before buying more.

    ABBV is another one of my favorites in the Pharma/BioTech sector. It has gone up by about 20% since I bought it. It is one of the fastest growing big Pharma/BioTech companies with high DGR growth in double digits.

    I think with the above three I’ve plenty of exposure in high quality Bio/Pharma sector. I don’t like to buy small BioTech companies as they are like pre-FANG stocks, have very violent price movements and most of them don’t pay any dividends.

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    1. Thanks Mr. ATM! ABBV & AMGN are companies I’m also looking at. I agree with your spreading of different stocks in the sector. Three would be my maximum as well. Lets hope another dip comes so we can add or initiate!

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  4. Interesting pick. I just added PFE and GSK to my watch list a few days ago. While both PFE and JNJ are strong the better “value” might be with PFE these days as JNJ has really run up quite a bit. Nice pick up. Should add some nice income to your portfolio.

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  5. PFE is one of the first three stocks I purchased. JNJ was also one of the first three. Unfortunately, I liquidated my assets years ago. I currently have JNJ but also looking to rekindle the flame with PFE. It sucks that they cut their dividends in 2009, but I still think it’s a great company with strong fundamentals.

    I think you made a great purchase and I might just follow in your footsteps.

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