Acquisition WFC

Wells-Fargo-LogoOne of the reasons why I enjoy reporting my recent stock acquisitions is because it is a true form of paying yourself first type of approach. It is also one of the main principles of personal finance towards wealth accumulation. Therefore, before I do anything with the paycheck I receive, I pay it myself first by buying quality peaces of businesses that generate reoccurring income. The stock market wealth building system is set up and it is ultimately up to us to either use it to build wealth or continue ignoring it. I choose to use it and the steps that I take are quite simple. I always take a percentage of my savings every month, which is usually half or 50% of the money I saved that month and pay it myself first by transferring to my brokerage account. Since I already paid myself and the money is in the investment brokerage account, I then patiently wait and look for opportunities to present themselves. Once the best type of opportunity at the current time has presented itself, I then initiate an acquisition into the stock and become an owner of an asset that not only grows in long-term value, but it continuously generates passive income in the form of growing annual dividends. With these same exact steps I automatically replicate month-in and month-out to continue paying myself first and building my investment portfolio that taps into the power of compounding.

This recent stock market downturn presented a number a valuable opportunities for the future. I even think there were too many opportunities to capitalize upon. Who would have known the markets would continue being very volatile so many times these last couple of months. Though, the good thing is that I am not buying the whole market. I am initiating purchases into sound and highly profitable businesses that know how to grow and rewards its shareholders. This is why I went with Wells Fargo & Co. (WFC), as it presented itself at a very compelling valuation, terrific fundamentals and great business model. I actually got my home mortgage loan from the company and was very satisfied with the transaction.

I purchased the stock just bellow the 52 week low range.

Also, the company should be reporting a dividend raise after the next quarter.

Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California. It is an international banking and financial services company that operates in 36 countries with approximately 8,700 locations and 12,500 ATMs. The company provides products and services to individuals, small businesses, and large businesses. It operates primarily in four major categories: Community Banking, Wealth and Investment Management, Consumer Lending, and Wholesale Banking. The company is one of the four biggest banks in United States and has one of the most valuable banking brands in the world.

  • Dividend Yield: 3.1%
  • 3Yr Dividend Growth Rate: 23.7%
  • Payout Ratio: 34.6%
  • P/E: 11.7
  • Consecutive Years of Dividend Raises: 4

I purchased 21 shares for the price of $48.10 adding $31.50 to my annual dividend income.

This is the 1st time I am initiating a stock acquisition this new year of 2016. The transaction is my first ever purchase of WFC into the portfolio. Also, the acquisition of WFC makes it the 35th company I am invested in. Currently, WFC ownership stake represents to be around 1.5% of my current portfolio value.

The 12-month dividend income increased to $2,704.

Thank you for reading & have a great day!

 

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12 Comments

  1. divorcedff on February 2, 2016 at 00:37

    DV

    I like your recent buy of WFC, I bought them way back in 2015 and now it is the time to average down a little bit, but I need cash that I don’t have right now.

    • DividendVet on February 2, 2016 at 11:42

      The price of WFC at current levels is definitely quite compelling and makes a lot of sense to average down. I hope you will find the needed cash to do what you are trying to do.

      Take care.

  2. FerdiS on February 2, 2016 at 00:49

    Congratulations, DividendVet! I’m a customer of WFC and I think it is a good bank to do business with. I don’t own shares, yet, so your post gives me food for thought.

    Take care and keep up the good work!

    FerdiS, DivGro

    • DividendVet on February 2, 2016 at 11:47

      Thanks, I rarely like any bank, but if I had to choose, it would pick WFC than any other ones. Even with the mortgage crisis it kept its nose much cleaner than the other banks. Either way, with real estate market picking up I believe more and more people will be looking for their financial side of services.

      Best of luck and will do!

  3. DivHut on February 2, 2016 at 01:37

    Great buy with WFC. It’s been a long time holding of mine and one of only two American banks I would consider for my dividend portfolio. The other is USB. That’s it. Congrats on “paying yourself first.” It’s so true when you set money aside and buys dividend income stocks. Thanks for sharing.

    • DividendVet on February 2, 2016 at 11:57

      Good to hear you have been holding WFC for a number of years and reaping the dividends. I hope to emulate for as long as the business allows me.

      As for the paying myself first principle, there are a number of ways you can pay yourself first, though I choose to do it in this manner. Works for me, though I believe everyone needs to find their own formula of paying themselves first.

      Good hearing from you.

  4. Dividend Monster on February 2, 2016 at 10:35

    DV,

    Great job with this new acquisition. WFC is a great company that loves to roll with the punches. I’ve had it on my radar for quite some time now but have no position in it just yet but you can bet at some point in the future I will. The only thing that I don’t care for with WFC is the short time frame of their rise in dividends. I wish they had a longer history of it so I could trust that they trust me more than themselves to handle my hard earned dividends! In the past they’ve already cut dividends twice when things got rough for them.

    Do you fear the same thing happening again soon?

    -DM

    • DividendVet on February 2, 2016 at 12:10

      The lack of historic consecutive dividend raises for the company does play as the negative when evaluating the company’s fundamentals. The 2009 dividend cut was a black eye to all dividend investors, so I am playing optimistic in hope to see better times for the industry. If any of the banks can do it, I think it is WFC. Time will tell.

      Thanks for the comment.

  5. Dividender on February 2, 2016 at 13:17

    Nice buy of WFC. It’s on my shopping list too.

    • DividendVet on February 2, 2016 at 23:46

      Glad to hear you similarly see the value in this business / stock. I hope your purchase comes through at a very competitive price.

      Best of luck.

  6. Special Agent Dividend on February 13, 2016 at 11:40

    Thanks for sharing the pickup of WFC. It has been on my shortlist for awhile, but I started a small position in BAC first after it dropped quite a bit recently. I will definitely keep considering WFC in the short term, if I can gather the funds to make a buy.

    • DividendVet on February 14, 2016 at 20:59

      Same here. WFC has been one that got away from me for a while, so when the pull back happened, It presented itself out of the rest of the bunch.

      Good luck.

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