Sunday, October 25, 2015

Recent buy - October 2015

A few weeks ago, I put some fresh capital to work!

Unfortunately the amount of this fresh capital was not as large as it should have been, but that's because we spent some time in the city of London. It's a great place to be, although it's not very cheap.

We did the usual sightseeing and went to one of the most succesful musicals ever: Les Miserable.
A very exciting experience! We had a great time.

In the midst of all this, I'm in the process of buying my first apartment!
More about that soon, as it is not yet finalized.

Let's get back to business!

Wells Fargo & co (WFC)
Buy 12 shares @ $51.32 at 9/30/2015

Wells Fargo is one of the biggest banks in the US. Their total assets have a value of $1.69 trillion dollars. They offer a wide variety of financial services like personal banking, insurances, mortgages, wealth management and investing services.

During the Great Recession the entire financial sector took a big hit and WFC was no exception. The stock went from $39 to $8 in a matter of months.

WFC stock price during the Great Recession (source: Google Finance)
As we know now, they have managed to recover pretty well from that.

WFC stock price after 2008 (source: Google Finance)

The impact of the recession is also shown in the graph below, which shows the dividend payouts of WFC from 2002 until now.

This graph leads to the following DGR numbers.

DGR-1, 17.4%
DGR-3, 41.2%
DGR-5, 22.5%
DGR-10, 3.8%

With an earnings per share of $4.11 and a very small payout ratio of 36.54%, there should be more than enough room for WFC to grow their business and their dividends to the $0.52 per quarter they once paid. The low forward P/E of 12.49 is just another metric of showing this potential.

I can definitely see why Warren Buffet has so many of shares of this great company.

What do you think of this purchase?

Thanks for reading!


  1. DFS,

    I love it. Great/one of the best banks in the US, safe dividend from my mind. Nice purchase!


    1. Hey Lanny,

      Thanks for your comment.
      Glad we are on the same track here.

      Best wishes,

  2. Solid name, solid buy. WFC is the only American bank I own in my portfolio. I would only consider one other name American bank for my long term dividend portfolio and that's USB. Other than those, as you know, I like the large Canadian banks but in the U.S> just those two WFC and USB. Thanks for sharing.

    1. Hey DivHut,

      Thanks for your comment!
      I hear you on the Canadian banks. Diversifying to another country is definitely something I should consider by now. However, with this purchase, 22% of my portfolio are Financials. That's enough for now.

      Best wishes,

  3. I like your buy, i did the same in september, great minds think the same :-)

    1. Hey FF,

      Glad to be thinking like you! ;-)

      Have a great day.

  4. Solid company! Great adding for you!


    1. Hey Mike,

      Thanks for stepping by. Appreciate it.

      Have a nice day!