Tuesday, February 23, 2021

Expected Dividend Increases for March 2021

After over a week of sub-zero temperatures here in Central Wisconsin, we have returned to relatively pleasant temperatures just below freezing.

With that aside, I will be discussing the dividend announcements in February and previewing expected dividend announcements for March.


Dividend Increase #1: Genuine Parts Company (GPC)

Genuine Parts Company's (GPC) dividend increase came in just below my expectation of 3.8% or $0.82/share, with the company announcing a 3.2% increase in its quarterly dividend from $0.79/share to $0.815/share.

Across my 6 shares of GPC, this dividend announcement increased my net annual forward dividends by $0.60.

Dividend Increase #2: Prudential Financial (PRU)

Prudential Financial's (PRU) dividend increase also came in just below my expectation of 6.4%, with PRU announcing a 4.5% increase in its quarterly dividend from $1.10/share to $1.15/share.

My net annual forward dividends were boosted by $1.80 across my 9 shares of PRU at the time of the dividend announcement.

Dividend Increase #3: United Parcel Service (UPS)

United Parcel Service's 1.0% increase in its quarterly dividend (from $1.01/share to $1.02/share) came in well below my expectations of a 6.9% dividend increase.

Given the blowout 2020 that UPS delivered to shareholders, I was surprised by UPS's dividend tiny dividend increase.

At any rate, UPS's dividend increase resulted in a $0.16 boost to my net annual forward dividends across my 4 shares of the stock.

Dividend Increase #4: Cisco (CSCO)

Cisco's 2.8% increase in its quarterly dividend (from $0.36/share to $0.37/share) came in below my expectations of a 5.6% increase to $0.38/share.

Across my 11 shares of the stock at the time of CSCO's dividend announcement, my net annual forward dividends increased $0.44.

Increase #5: Home Depot (HD)

As I expected Home Depot (HD) delivered a 10% increase to it shareholders, raising its quarterly dividend from $1.50/share to $1.65/share.

Across my 2 shares of the stock, my net annual forward dividends were boosted by $1.20.

Increase #6: Digital Realty Trust (DLR)

Digital Realty Trust (DLR) announced a 3.4% increase in its quarterly dividend from $1.12/share to $1.16/share just as I expected.

Across my 3 shares of the stock, my net annual forward dividends increased $0.48.

Increase #7: Albemarle (ALB)

Albemarle (ALB) announced a 1.3% increase in its quarterly dividend from $0.385/share to $0.39/share, which was well below my expectations of a 5.2% increase in the quarterly dividend.

Regardless, my net annual forward dividends increased by $0.10 as a result of ALB's dividend announcement across my 5 shares of the stock.

Dividend Freeze #1: PPL Corp (PPL)

PPL Corp (PPL) announced a dividend in line with its previous, which was less than the 0.6% increase in the quarterly dividend that I was expecting (from $0.415/share to $0.4175/share).

Given PPL's shift to a pureplay U.S. utility strategy with the sale of its U.K. utility business, I understand why PPL's management team and Board of Directors opted to simply maintain the dividend at this time.

Expected Dividend Increases for March 2021

Expected Increase #1: W.P. Carey (WPC)

W.P. Carey (WPC) is one of the most consistent dividend payers in my portfolio, which is why I am expecting the company to announce yet another 0.2% increase in its quarterly dividend from $1.046/share to $1.048/share.

Across my 7 shares of the stock, I am forecasting a $0.056 increase in my net annual forward dividends.

Expected Increase #2: Realty Income (O)

Another consistent dividend payer in my portfolio is Realty Income (O), which is why I am forecasting a 0.2% increase in its quarterly dividend from $0.2345/share to $0.2350/share.

This would boost my net annual forward dividends by $0.054 across my 9 shares of the stock.

Expected Increase #3: General Dynamics (GD)

The final dividend increase that I am expecting for March is General Dynamics (GD).

Due to GD's relatively sustainable payout ratios and high-single digit annual earnings growth expected for 2021, I believe that GD will announce a 7.3% increase in its quarterly dividend from $1.10/share to $1.18/share.

Across my 3 shares of the stock, my net annual forward dividends would be boosted by $0.96.

Concluding Thoughts:

I received $4.78 of dividend increases in February, which would require an investment of $119.50 at a 4% yield to replicate.

Furthermore, I am expecting $1.07 in dividend increases in March, which would take $26.75 to replicate at a 4% yield.

Discussion:

How was your February in terms of dividend announcements?

Did you receive any first-time dividend increases during the month as I did with UPS and CSCO?

As always, I appreciate your readership and I look forward to your comments in the comment section below!

Tuesday, February 16, 2021

Recounting My Blessings

As I'm writing this post, it's already mid-February. Most importantly, the bone-chilling temperatures of Central Wisconsin will once again be a thing of the past in just a couple months!

Even though we're well past Thanksgiving, I believe that every day presents us with numerous blessings that are worthy of acknowledging to live a fulfilling life, which is why I'll be outlining a few blessings that I greatly appreciate.

Thank You Signage

Image Source: Pexels

The First: Being Born In The Wealthiest Country In Existence

Despite the fact that no country will ever be a perfect place to live due to the inherent flaws of human nature, I truly believe that the United States, and more broadly, the economic system of Western civilization has done more to advance the human condition than any other civilization in history.

When we consider that the vast majority of even the bottom quintile of Americans by income have electricity and the ability to access an abundance of information via the Internet, it's quite clear that I am blessed to have been born to a lower middle class family in the United States.

This has made it possible for average citizens such as myself to take control of my financial future and start a brokerage account with Robinhood.

While winning the geographic lottery was undoubtedly vital in my ability to recently reach a net worth of $50,000, none of this would have happened without my family, which leads me to my next point.

The Second: A Supportive Family

I have been blessed with a supportive immediate family, which has been instrumental in allowing me to graduate college with a low five-figure net worth. 

The financial support of my grandparents and parents for birthdays and Christmas were useful in helping me to pay my way through college without incurring student loan debt

What's more, the fact that my parents allowed me to live rent free with them while I was in college saved me tens of thousands of dollars over the span of 4 years.

The Third: Writing For Seeking Alpha

When I wrote what would eventually be my first article to be published to Seeking Alpha, my sole reason at the time was to generate more exposure for the blog.

It wasn't long after I submitted my article to SA for non-exclusive publication that I was advised by an editor from SA that I should consider submitting my article for exclusive publication, which would thereafter turn into a side hustle that has allowed me to earn a solid side income over the past 2 years and accumulate over 5,000 followers.

It's incredible to think that had I never thought of writing for Seeking Alpha as a way of cross marketing my blog, I never would have had the chance to engage with the Seeking Alpha community by writing articles and earn a side income while doing so, which is why I feel fortunate that this opportunity came my way.

Concluding Thoughts:

Having recently reached a net worth of $50,000, I have been reflecting on the blessings in my life over the past couple days.

Words cannot even begin to express just how blessed I have been to have been born in a wealthy country to supportive lower middle class parents, not to mention being fortunate enough to find a side hustle that I enjoy.

Discussion:

What are the things for which you are most grateful?

Thanks for reading and I welcome your comments in the comment section below!

Tuesday, February 9, 2021

Why I Will Be Switching From Robinhood To Fidelity

The decision of major brokers such as Robinhood to limit the trading of meme stocks (up to last week when Robinhood lifted all limitations on the trading of meme stocks) led to many p'ed off customers, with many leaving bad reviews on Google Play, and some even switching to other brokerage firms as a rebellion against Robinhood.

It was this development that prompted me to come to the decision to switch my investment holdings from Robinhood to Fidelity.

While I lean toward the side of these disgruntled customers, I personally don't share their risk tolerance and renting rather than ownership mentality toward stocks.

As I'll discuss below, my reasons to switch from Robinhood to Fidelity lie in the fact that Fidelity offers a much stronger platform for investment research (and it's free), Fidelity's margin rates basically discourage the use of margin (which is a plus in this case as I have really wanted to shore up my personal balance sheet even more than ever before despite the fact that I have leveraged Robinhood's 2.5% margin rate to boost my net annual dividend income and acquire high-quality dividend growth stocks), and Fidelity is a more sustainable platform in the long-term as compared to Robinhood.

Image result for fidelity logo Image Source: 1000logos

The First Reason: A Robust Research Platform

While I have enjoyed access to Morningstar's research reports via my Robinhood Gold membership for $5/month, the primary reason that I intend on switching to Fidelity is the fact that the broker offers free access to stock research from nearly two dozen third-party providers, including Thomson Reuters and Zacks.

Aside from Robinhood's Morningstar research reports for the $5/month fee that comes with Robinhood Gold, the platform lacks any meaningful research reports, which is a major downside IMO.

Fidelity will provide me with a great deal of information that I can refer to while conducting my own research all at a savings of my $5/month Robinhood Gold membership.

The Second Reason: The Switch Will Prompt Drastic Improvement In My Personal Balance Sheet

While my personal balance sheet only consists of roughly $2,700 in margin debt and $200 in credit card debt at the time of my writing this blog post against roughly $51,000 in assets, I have reverted to my previous view of margin in that I would rather own the entirety of my portfolio.

Since I will need to entirely pay down my margin to initiate my account transfer from Robinhood to Fidelity, this would serve the purpose of shoring up my personal balance sheet and transforming it from solid to rock solid.

Although it is unlikely that Robinhood will raise its margin rates from 2.5% in the foreseeable future due to the Federal Reserve's commitment to keeping rates near zero through 2023, it's just an added risk to my personal finances that rates could eventually rise or in a severe bear market, I could be issued a margin call (it would take a roughly 75% downturn in my portfolio at this time to activate a margin call, but crazier things have happened in the past).

Because Fidelity's margin rates are relatively high, a switch to Fidelity as my broker would essentially eliminate the temptation of the use of margin in my portfolio, which would also eliminate the risk of being a forced seller in a severe bear market.

Given that I'm doing relatively well from a financial standpoint for my age, I view it as foolish to risk my financial well-being for minimal financial gain.

The Third Reason: I Believe Fidelity Is More Sustainable Over The Long-Term

Going back to my introduction that alluded to the fallout from Robinhood's decision to briefly eliminate the trading of meme stocks, my final reason to switch to Fidelity ultimately comes down to the fact that Robinhood has received several hundred thousand 1 star reviews on Google Play from disgruntled customers.

While I don't believe that Robinhood will go bankrupt in the near future as a result of the backlash of its meme stock decisions (though the damage to its reputation will be significant in at least the near future IMO), I feel more comfortable with Fidelity's track record since its founding in 1946 than I do with Robinhood's track record since its founding in 2013.

Concluding Thoughts: 

While I will always be grateful to Robinhood for being my first broker, the company's limited research platform, tempting margin rates, and near-term damage to its reputation led to my decision to switch to Fidelity in a couple months.

I believe that my switch to Fidelity once I fully deleverage my Robinhood margin debt will allow me access to a much stronger research platform, disincentivize the future use of margin, and provide me with more peace of mind with the sustainability of my broker.

Discussion:

Have you ever switched brokers in your investing career? If so, how many times have you switched brokers and are you pleased with your current broker or are you considering a switch?

Thanks for your readership and I look forward to your comments in the comment section below!

Tuesday, February 2, 2021

January 2021 Dividend Income

Another month has passed us by and the weather here in Central Wisconsin remains well above average for this time of year. The next few days are expected to reach the 20s Fahrenheit, which sure beats the sub-zero temperatures that typically manifests itself this time of year where I live!

With that aside, I will be delving into the intent of this post, which is to outline my dividend income received in January 2021.






During the month of January 2021, I received $80.26 in net dividends.

Against the $75.70 in net dividends that were received in October 2020, this equates to a 6.0% quarterly growth rate.

Additionally, the net dividends collected in January 2021 represent 75.2% YoY growth compared to the $45.81 in net dividends received in January 2020.

Breaking this down by account, I received $70.24 in net dividends from 18 companies in my Robinhood portfolio, $9.78 in net dividends from 5 companies in my Webull portfolio, and $0.24 in net dividends from 11 companies in my M1 Finance portfolio.

The following activity within my portfolios resulted in a $4.56 increase in my net dividends from October 2020 to January 2021:

Due to the timing of The GEO Group's (GEO) dividend, my net dividends received declined $5.44 across my Robinhood and Webull portfolios.

Due to GlaxoSmithKline's (GSK) dividend payment schedule, my net dividends received increased $0.17 in my Robinhood portfolio.

As a result of my purchase of an additional share of Philip Morris International (PM), my dividends received were boosted by $1.20 in my Robinhood portfolio.

My dividends received from Eastman Chemical Company (EMN) increased $0.12 as a result of its recent dividend increase in my Robinhood portfolio.

As a result of the timing of PepsiCo's (PEP) dividend, my dividends were $2.07 higher across my Robinhood and M1 Finance portfolios.

I also received my first dividend from Cisco (CSCO) in my Robinhood portfolio since my purchase last November, which boosted my dividend income by $3.96.

My dividends received from Realty Income (O) increased by $0.47 in my Robinhood portfolio, which was due to my recent purchase of another 2 shares.

I also received an additional $1.06 in dividends from W.P. Carey (WPC) in my Robinhood portfolio as a result of its recent dividend increase and my recent purchase of an additional share.

As a result of the timing of Digital Realty's (DLR) dividend in my Robinhood portfolio, my net dividends were boosted $3.36.

Finally, my net dividends decreased $2.41 as a result of an increase in my Robinhood margin used.

Concluding Thoughts:

My net dividends continue to steadily progress as I set yet another record in terms of dividend income for the first month of a quarter.

Since I am returning to my usual capital deployment schedule of $1,500-$2,000/month for the foreseeable future, I am anticipating that my net dividends in April will be pushing $90, bringing me that much closer to every month being over $100 beginning this summer.

Discussion:

How was your month in terms of dividend income?

Did you receive any first time dividends as I did with CSCO?

As always, I appreciate your readership and welcome your comments in the comment section below!