Today’s post I wanted to focus on what stocks I’ve sold, the why and the realized gain or loss I experienced.
The next step in the article will be about what my plans are with the fresh capital or what I may have done after the sale.
Let’s dive in!
when I’d sell a stock
So why would I sell any of my stocks or stocks positions? I am a dividend investor, right? A supposedly buy and hold for the long-term kinda guy, right?
Well, there comes a time when selling a stock should occur on a few occasions, at least for me. Those circumstances:
– The stock cut their dividend (doesn’t make sense to hold the stock, as a dividend investor)
– The stock was from a spin-off on a company I owned. Would I buy the stock if it wasn’t a spin-off? Revert back to #1 – do they pay a dividend?
– The combination of Dividend Yield and Dividend growth no longer bode well for the stock portfolio. Therefore, doesn’t meet my criteria because the business, itself, has changed. Insert a few companies, such as 3M (MMM), Paramount (PARA), MDU Resources (MDU), etc.
– The stock position was so small and I had no desire to add to it in the future.
I am going to show you all of my stock sales this year and yes – maybe you’ll make fun of them or maybe you won’t. Either which way, I wiped my hands and moved the heck on, if that makes sense. The acquired date, on some, do not seem right – for instance Chimera (CIM) – I had owned for over a decade and WestRock (WRK) was for at least 4 years.
Here you will find the fully detail listing of the stock sales for the year, some big, some small. Similarly, and as a disclaimer, do not pay attention to the acquired date. From reading this, the only one that may be right is Solventum and South32.
To start the sales off, I sold Chimera (CIM). They were an underperforming REIT, even on their best days. Instead of the sheer volatility to their share price and dividend yield, I decided to cut ties with one of my longest term holdings, plus it wasn’t large either. Therefore, it fit the criteria, as it did not fit my portfolio, there was a dividend reduction and it was a small position, a $405 loss to boot.
Next up was Knife River Corp (KNF), Kendryl (KD), MDU Resources (MDU) and South32 (SOUHY).
To start, KNF and KD were spin-offs from MDU Resources and IBM. Therefore – would I naturally buy them? No. In addition, they were truly small positions AND they did not pay a dividend. In total, KNF gave me a $346 gain and KD gave me a $60 loss. No big deal, not that significant.
However, MDU was the culprit of KNF. Therefore – that is awesome! Now, what about MDU? Well, their dividend yield and dividend growth just didn’t pair well, always in the 2-3% range for the yield and in the same range for dividend growth, with lack of appreciation. Therefore, it didn’t fit my dividend strategy AND it was a relatively small position. This resulted in a $91 gain when I sold them. Not bad investing with MDU overall, right? As they truly produced a $437 total gain, when you include KNF.
Then, I sold out of Solventum (SOLV). Why? They were another spin-off. This time, from 3M Company (MMM) and currently pay no dividend – though I do anticipate SOLV announcing one within the next 12-18 months. Another small stock positions, at less than $1,000, and another loss of $381 I took to the chin, ouch!
Next up, was big boy WestRock (WRK). We were going to lose them to a merger with SmurfitKappa. I didn’t want to own that stock. Therefore, took a nice gain of $1,322 in total on them. Not too bad for holding onto them for a few years, especially during COVID. Therefore, WRK/new entity did not fit the portfolio, due to the company being new and international as well. Those international dividends are no fun!
The last stock was Haleon (HLN). Now, I don’t think Haleon was a bad company. They have great brands, such as Sensodyne, Centrum, Advil, etc.. However, again, they were a spin-off from Glaxo (GSK) and Haleon was going to be another international irregular dividend, PLUS the position was small to me, at less than $1,000. Therefore, I sold and captured a $156 gain.
YTD Stock sales summary
Therefore, I actually have received total proceeds of $10,967 and have recognized a total gain of $1,090.40. I still have a few months left to the year to offset that gain.
Here is where I am looking to offset that gain with the potential sale of…
Warner Brothers Discover (WBD), as my unrealized loss right now is $1,600. I would not be opposed to another pullback. However, I can use the additional unrealized loss to also look at exiting the gain I have on…
3M Company (MMM). They reduced their dividend after the spin-off of Solventum (SOLV), which I sold, as discussed above. Now they yield 2% and never had a large growth rate, nor do I anticipate them to have one.
I now have my homework laid out in front of me for upcoming stock sales. The only question I have for myself is… can I execute it? Can I “time” this up so perfectly I can get close to net zero? I’ll evaluate each company, of course, before the sale and see if I see business improving and/or a case to keep them prior to sale. Right now, with an $1,090 gain to report, I would be staring at approximately $163.50 tax bill, using a 15%, long-term capital gains rate.
What do you think of the stock sales? Would you follow suit and do what I did? Ultimately, my goals were to increase dividend income and dividend growth with higher quality, better stocks for my portfolio, which is what I did!
Look forward to the feedback and thanks for stopping by.
-Lanny
