Brookfield (BN): Dividend Payout

Brookfield (BN) paid out its quarterly dividend on Monday. Since the company is headquartered internationally in Toronto, Canada, my broker requires I take the dividend in cash, not reinvested shares. That makes little difference, though, as the dividend lowered my per-share cost -0.27% from $30.11 to $30.03.

From here, my next buy target is $30.59, slightly above a past point of support, and my next sell target is $44.01, slightly higher than Brookfield’s current levels and just under a key point of resistance from the last few years.

Dow (DOW): Profit-Taking

Dow (DOW), the company formerly known as Dow Chemical, is an incredibly slow-moving stock. How slow, you ask? It finally triggered my next sell order on Wednesday, nearly a full year later after I took all the remaining capital of the position on July 13 of last year. Thank god it pays a nearly dividend 5% yield because the capital gains are sluggish!

The sale filled at $59.93, selling 3.11% of my position and locking in +21.78% in gains on some of the shares I bought for $49.21 on May 23, 2019. The sale lowered my per-share cost -$1.93 from -$0.318 to -$2.25 (a negative per-share cost indicates all capital has been removed in addition to $2.25 per share added to the portfolio’s bottom line in addition to each share’s current value).

From here, my next sell target is $65.64, below a past point of resistance, and my next buy target is $48.59, above the low DOW saw in October 2023.

DOW closed the week at $59.69, down -0.40% from where I took profits Wednesday.

Nike (NKE): Added to Position & Dividend Reinvestment

Nike (NKE) paid out its quarterly dividend on Tuesday, raising my per-share “cost” by +0.38% from -$10.41 to -$10.37. Then, on Thursday, Nike continued to break down and triggered my next buy order which added 1.21% to the position at $89.41, locking in a -29.30% discount replacing shares I sold for $126.46 on January 9, 2023.

Nike is one of those companies that goes through cycles. In its recent earnings report, Nike spread the word that it has fallen behind in innovation which has caused the recent selloff. However, you never, ever, bet against Nike. Their track record is to come back ferociously, so even though it looks like Nike’s got a hard time ahead of it, you buy.

The buy raised my per-share “cost” +$2.77 from -$10.37 to -$7.60 (a negative per-share cost indicates all capital has been removed in addition to $7.60 per share added to the portfolio’s bottom line in addition to each share’s current value).

From here, my next buy target for Nike is $83.07, just above Nike’s lows in 2022, and my next sell target is $128.94, just under the high Nike saw in 2022.

NKE closed the week at $88.85, down -0.63% from where I added on Thursday.

Nvidia (NVDA): Dividend Reinvestment

You might be asking yourself why a company as large as Nvidia (NVDA) only pays out a dividend yield of about 0.16% annually. Well, there are two major reasons: the first is that by paying a dividend, Nvidia makes it so its stock can be included in ETFs and funds that require every inclusion to pay a dividend.

Second, Nvidia hasn’t raised its dividend in the entire time I’ve been in the stock – that’s nearly eight years. The yield used to be significant back when Nvidia was trading at $15.67 where I bought it, but with the company trading at $907.07 when this quarter’s dividend was paid out last week, it’s certainly no longer significant.

That being said, the dividend payout did raise my per-share “cost” by +$0.02 from -$565.77 to -$565.75 (a negative per-share cost indicates all capital has been removed in addition to $565.75 per share added to the portfolio’s bottom line in addition to each share’s current value).

Why did my cost basis raise after receiving a dividend?

Whenever all capital has been removed from a position, a dividend reinvestment adds more shares to the position, not more profits. So, the profit in the position is divided by more shares and raises the per-share cost even though the value of the entire position is also increased by the new shares from the dividend.

From here, my next sell target for Nvidia is $999.97, right under that key whole-number resistance at $1,000.00, and my next buy target is $584.28, just about -40% off Nvidia’s current all-time high (yes, I still believe Nvidia will pull back at least 40% at some point in the future).