I have a couple of puts that I’ve sold recently and I could get assigned additional shares of NSC. However, I don’t want to miss out if NSC has a run up in price. It has already moved back higher than $60/share from a low of about $56. I do still want to own more of their stock. I decided to purchase additional shares this morning to average down.
I bought 37 shares @ $60.29/share lowering my cost basis from $67.57/share to $64.98/share. These 37 shares will also add $74 to my yearly dividend income. This will be my last purchase of the month.
NSC is a dividend contender that has increased dividends for 11 straight years. They have a current yield of 3.32% and a 5-year CAGR of 19.5%. If they maintained this level of dividend growth they would have a 10-year YOC of 19.72%. Actually to achieve a 10-year YOC of at least 10% that I look for , NSC would need to have a dividend growth rate of 11.66%. I believe they can achieve this.