Baxalta Inc. (BXLT) was the company that split its pharmaceutical business from Baxter International Inc. (BAX) in the middle of this year. Unfortunately for its investors including myself, the split resulted in a significant dividend haircut from the parent company, going from the original quarterly dividend of $.52 cents to $.12 cents, plus $.07 per share from Baxalta Inc. (BXLT). That is a 63.5% decline in quarterly dividend, which was not pleasant to take. Currently, the dividend yield of Baxalta Inc. (BXLT) stands at minuscule .71%.
I have to account for opportunity costs with Baxalta Inc. (BXLT), meaning that there is a loss of dividend opportunity here. The dividend yield does not make it worthwhile for me to be holding such an investment any more and due to the close peak of the stock price it was good time to flip it into another investment. Here are some more reasons why I sold the stake.
- Decreased quarterly dividend from both investments
- I don’t like the pharmaceutical business
- Unknown future for the dividend growth
I sold all 23 shares of Baxalta Inc. (BXLT) for the price of $38.25 lowering my annual dividend income by $6.44.
The 12-month dividend income decreased to $2,642.