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Thursday, June 11, 2020

Home Run Number 20

Ten months ago I celebrated my 19th home run, a designation I give to stocks in my portfolio that crosses the 100% mark in total returns.

My last home run was Xcel Energy (XEL), a Dividend Contender with a streak of 17 consecutive years of higher dividend payments.

Given the current market conditions, it is perhaps surprising to report a new home run stock. But the stock that doubled my initial investment is one that has done particularly well and even strengthened its position during the pandemic.

This article presents my 20th home run stock, a list of previous home runs, and shortlist of home run contenders.

Previous Home Runs

Here is a list of DivGro's previous home runs with updated total returns (and annualized total returns):
  • Home run #1: General Dynamics (GD) — up 88% (20% annualized)
  • Home run #2: Nippon Telegraph & Telephone (NTT) — closed for 125% gain (37% annualized)
  • Home run #3: Digital Realty Trust (DLR) — closed for 102% gain (44% annualized)
  • Home run #4: Altria Group (MO) — up 4% (1% annualized)
  • Home run #5: Reynolds American (RAI) — closed for 180% gain (53% annualized)
  • Home run #6: Main Street Capital (MAIN) — up 111% (22% annualized)
  • Home run #7: Microsoft (MSFT) — up 341% (75% annualized)
  • Home run #8: UnitedHealth Group (UNH) — up 83% (28% annualized)
  • Home run #9: Northrop Grumman (NOC) — closed for 132% gain (46% annualized)
  • Home run #10: McDonald's (MCD) — up 132% (23% annualized)
  • Home run #11: AbbView (ABBV) — up 80% (20% annualized)
  • Home run #12: Lockheed Martin (LMT) — up 145% (28% annualized)
  • Home run #13: Raytheon Technologies (RTX) — up 35%
  • Home run #14: Netflix (NFLX) — up 114% (51% annualized)
  • Home run #15: Intel (INTC) — up 212% (32% annualized)
  • Home run #16: Valero Energy (VLO) — up 26% (7% annualized)
  • Home run #17: Aflac (AFL) — up 81% (17% annualized)
  • Home run #18: Apple (AAPL) — up 250% (56% annualized)
  • Home run #19: Xcel Energy (XEL) — up 119% (26% annualized)
Once a position reaches home run status, it retains that status even if the stock price drops and the total returns dip below the 100% mark. Furthermore, if I buy additional shares of a home run stock at a higher cost basis, the calculated total returns could drop below 100% as well.

I recently reopened a position in NOC and I reinvested in DLR about eighteen months ago. NOC essentially is flat and DLR has returned 30% or 18% on an annualized basis. Any repeat position will have to produce total returns of 100% in order to earn home run status, just like any other stock in my portfolio.

Home Run #20

My 20th home run stock is Amazon.com, Inc (AMZN), a worldwide retail seller of consumer products and subscriptions.

AMZN is not a dividend growth stock and my investment in the stock is purely for its growth prospects. For fun, I call AMZN one of my future dividend payers. 

Here is a table showing the buy dates, number of shares, and cost basis of each lot of AMZN shares:

The average cost basis of my 7 shares is $1254.38. When AMZN closed at $2,524.06 per share on 8 June, AMZN officially became a home run stock in my portfolio.

Here is a price chart of AMZN indicating my buys since 16 June 2017:

Home Run Contenders

I have three positions showing total returns above 60%. Procter & Gamble (PG) has returned 74% (or 12% annualized), NextEra Energy (NEE) has returned 63% (or 32% annualized), and Air Products and Chemicals (APD) has returned 61% (or 41% annualized). All three stocks have some way to go before achieving home run status.

Each of these stocks took a beating in late February and early March but, so far, APD's recovery has been the strongest and most consistent. Considering how much these stocks would need to gain, it seems like I'm going to wait a long time before I can announce DivGro's next home run!

Concluding Remarks

Having more than doubled my average cost basis, AMZN is the latest home run stock in my DivGro portfolio. It follows NFLX as the other growth stock in my portfolio that has achieved home run status.

I will likely add another share of AMZN to my portfolio if and when the market pulls back significantly. Given the state of the United States economy, I don't see how the stock market can stay this hot for much longer! We'll see how it goes.

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  1. Congratulations! I'm following you since a few months. I like your approach, i will integrate it with my investment strategy. I'm still a noob, i bought my first stocks 1 month ago. Being able to see how you 'move' is very helpful for me, probably more than any stocks related book. Plus i love Dividend Radar! So double thank you!

    1. Thank you! I appreciate your comment and I'm glad that you find my blog valuable! A journey starts with the first step, so congratulations on taking that first step. All the best with your investments and I hope you enjoy the journey!

  2. Congratulations !!!
    How about Tenbaggers (The name given when you got x10 by Peter Lynch)
    Have you got any?
    I have got only one in my life, but I have started to invest in 90' many years ago.


    1. Thanks for your note, Lionel! No, I've never had a Tenbagger... that's an amazing achievement! And with a portfolio of mostly dividend growth stocks, I don't expect to get a Tenbagger any time soon. My best, so far, is $MSFT at 340%.


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