New Buys: Delta Airlines, International Paper, CVS

It’s been quite a busy April for me so far - I made three new purchases which is a monthly record for me.

On April 10 I bought 25 shares of Delta Airlines (DAL) for a total of $1,124. 

Then on April 13 I made two more purchases: I invested $1,497 in International Paper Co. (IP) - equaling 30 shares - and  bought 15 shares of CVS for a total of $1,170.

In this post I explain the reasons why I made these three additions to my portfolio and what this means for my forward dividend income. 

Earlier in the year -  in January - I made an initial purchase of Delta shares.  During the last three months the price of DAL dropped about 10% - from $50 to under $45.

Given this price drop I decided to double my position in Delta to 50 shares. The reasons why I liked Delta in January still hold true - especially the pretty astonishing dividend growth rate of 50%.

In their April 20 report S&P Capital IQ marks DAL as a 5 star strong buy with a 12 month target price of $65. 

A brand new position in my portfolio is International Paper (IP), which was my second buy this month.

International Paper Co. operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, Africa, and the Middle East. The company operates through four segments: Industrial Packaging, Global Cellulose Fibers, Printing Papers, and Consumer Packaging.

The company sells its packaging products, paper products, and other products directly to end users and converters, as well as through agents, resellers, and paper distributors. International Paper Company was founded in 1898 and is headquartered in Memphis, Tennessee.

IP’s dividend is at an above market median of 3.48% - although the payout ratio a relatively high 84%. In recent years the dividend growth was in the double digits, but has slowed to 5% this year.

IP’s Earnings per Share (EPS) show a decline of -5.8% which is a little misleading since 2013 was an outlier year.

The Price/Earnings (P/E) ratio is 24.19, below the Industry average but a little above the company’s 5 year average.

In their April 15 report S&P Capital IQ marks International Paper Co. as a 4 star buy with a 12 month target price of $60. 

Finally, CVS. In 2016 I initiated a position in CVS and decided to add 15 shares given the recent price development.

Even though the price dropped from above $100 to around $80 in the last year - CVS’s dividend features remain attractive. The yield is at a decent 2.50%, the payout ratio is a modest 41% and the dividend growth remains at around 20% year over year.

In their April 15 report S&P Capital IQ marks CVS as a 3 star hold with a 12 month target price of $82. 

With these three purchases my forward annual dividend income has increased by $83.26.

What do you think about these three buys? What did you buy recently? Leave a comment/reply to share your thoughts!

4 thoughts on “New Buys: Delta Airlines, International Paper, CVS”

  1. I like the IP pick up. I used to own that stock a long, long time ago. The closest thing I own today would be BMS another package company. Thanks for sharing and great to see you continuing to make those buys.

Leave a Reply