Tuesday, November 24, 2020

Expected Dividend Increases for December 2020

As I'm writing this blog post, we're just days away from Thanksgiving, which means we barely have another month to achieve our goals for the year!

Interestingly, Iron Mountain (IRM) opted to keep its dividend steady with its dividend announcement in November, which means that I didn't receive any dividend increases during the month (although I also didn't endure any dividend cuts during the month).

Without further ado, I will be discussing a dividend increase that I forgot to include in my previous post of this series, and getting into the dividend increases that I am expecting for next month. I'd advise you to buckle up as I am expecting quite a few in December!


Missed Dividend Increase In October

Missed October Dividend Increase: Royal Dutch Shell (RDS.B)

As alluded to by the heading above, Royal Dutch Shell's (RDS.B) 4.1% increase to its quarterly dividend from $0.32/share to $0.333/share got past me as the dividend increase came in the last couple days of the month.

While the 66.7% cut in RDS.B's dividend back in April was a notable blow to my portfolio's net annual forward dividends (resulting in a $22.32 decline in my portfolio's net annual forward dividends), the difficulties that the industry was and still is experiencing justified a dividend cut to preserve capital for the sake of investing for the future and maintaining the balance sheet.

It will be a long road to recovery for RDS.B's dividend, but it was nice to see the company start back on its path to restoring its previous dividend.

Across my 9 shares of the stock, my net annual forward dividends were boosted by $0.468 as a result of RDS.B's dividend increase.

Expected Dividend Increases For December:

Expected Increase #1: Realty Income (O)

Starting with arguably the most consistent REIT within my portfolio, I am expecting a 0.2% increase in Realty Income's (O) monthly dividend from $0.2340/share to $0.2345/share.

While this is a minuscule dividend increase, it's worth remembering that O increases its dividend by 2-3% every January, with smaller increases like the above in March, June, September, and December.

It's steady raises from O that are a testament to the power of dividend growth and compounding, which is why O is among the most favorite stocks in my portfolio.

My net annual forward dividends would increase $0.042 across my 7 shares should O's dividend increase meet my expectations outlined above.

Expected Increase #2: W.P. Carey (WPC)

Moving to yet another consistent REIT within my portfolio, I am expecting W.P. Carey (WPC) to announce a 0.2% increase in its quarterly dividend from $1.044/share to $1.046/share.

Similar to O, WPC increases its dividend in the last month of each quarter, so while the stock barely increases its dividend, it increases its dividend 4 times a year typically.

Across my 5 shares of WPC, I anticipate my net annual forward dividends will increase $0.04 in the event that WPC continues upon its trend of $0.002/share increases to its quarterly dividend.

Expected Increase #3: AT&T (T)

Moving to the stock in this post with the longest dividend increase streak, I don't expect that AT&T (T) will break from its customary $0.01/share dividend increase, which means that I am forecasting T will increase its quarterly dividend 1.9% from $0.52/share to $0.53/share.

While the stock is making significant progress in deleveraging its debts, I don't believe the stock is quite ready to bust the doors down and deliver more than its customary $0.01/share dividend increase this year.

With that in mind, I forecast my net annual forward dividends will be boosted by $0.84 as a result of T's dividend expected dividend increase across my 21 shares.

Expected Increase #4: Amgen (AMGN)

Moving to my only biopharma holding in this post (normally Pfizer or PFE would be included in my December dividend increases, but given the spin-off of Upjohn and Mylan to form Viatris or VTRS, PFE's next dividend will likely be a bit lower, although even when factoring in VTRS's dividend), I am forecasting yet another strong dividend increase from Amgen (AMGN).

Given that AMGN's payout ratios are in the mid to upper-30% range in terms of non-GAAP EPS and FCF, I am anticipating that AMGN will announce a 9.4% increase in its quarterly dividend from $1.60/share to $1.75/share.

Given my soon to be 3 shares of AMGN (spoiler alert: I'll be buying two shares of AMGN later this week ahead of the dividend announcement), I am expecting a $1.80 uptick in my net annual forward dividends as a result of AMGN's next dividend announcement.

Expected Increase #5: Eastman Chemical Company (EMN)

Given that Eastman Chemical Company has been adversely impacted by COVID-19 and that earnings as a result won't recover to 2019 levels until next year, I am expecting a smaller dividend increase than the 6.5% that was announced last December.

In light of the above, I am forecasting a 3.0% increase in EMN's quarterly dividend from $0.66/share to $0.68/share.

Should this occur, my net annual forward dividends would be boosted by $0.32 across my 4 shares of the stock.

Expected Increase #6: Broadcom (AVGO)

Wrapping up this blog post, I am expecting yet another strong dividend increase from Broadcom (AVGO), although I don't anticipate this dividend increase will be nearly as large as the 22.6% dividend increase last December.

Given that AVGO's payout ratio can't really expand much more without starting to sacrifice long-term viability, I am forecasting that AVGO will announce a 10.8% increase in its quarterly dividend from $3.25/share to $3.60/share.

Across my 3 shares of AVGO, this announcement would result in a $4.20 surge in my net annual forward dividends.

Concluding Thoughts:

While I didn't receive any dividend increases in November due to IRM's announcement that it was keeping its dividend in line with the previous, I am looking forward to what is sure to be my strongest month of dividend increases next month.

It would take $181.05 in capital deployment to match the $7.242 in dividend increases that I am expecting next month, assuming a 4% weighted average yield.

As I'll be discussing in my next post for November 2020 dividend stock purchases, I am also pleased to announce that my capital deployment schedule is back to its ~$1,500/month routine, which I believe will bode well in my progression to FI closing this year out and heading into next year.

Discussion:

Are you expecting December to be a busy month for dividend increases within your portfolio as well?

Will you be receiving dividend increases for the first time from any of your stock holdings as I will be in the case of AVGO?

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

Tuesday, November 17, 2020

How Blogging Is Helping Me Reach My Goals

Since the advent of the Internet, a plethora of individuals with varying interests have taken to the Internet to share their interests with the world via blogging.

Given the key benefits of blogging and by also using hindsight, it's easy to understand why so many, especially in the personal finance community have adopted the hobby/side hustle of blogging.

Without further ado, I'll discuss several of the ways that blogging is helping me to reach my personal and financial goals.


Blogging Holds Me And So Many Others Accountable

As one of my favorite bloggers, Jason Fieber points out, the purpose of his blog was to document his journey to financial independence and to hold himself accountable during that journey. 

One of the primary ways that I hold myself accountable personally and within the personal finance community is by outlining my goals for a particular year at the beginning of the year and doing my very best to accomplish those goals.

When one writes down their goals in a concise manner, they are 20-40% more likely to accomplish them.

Given that I am publishing my specific goals for the world to see, I would argue that the odds of accomplishing my goals increase a bit more for the sake of proving that I am capable of achieving those goals.

This Is A Very Supportive Community

Unlike the world in general, which tends to be a very divided place, I can fairly characterize the community that has formed on this blog over the past 2 and a half years as one that is supportive.

While I'm confident that this community would call me out on any oversights on my part, I also believe that this community is much more mature and respectful than most others, which is another factor that motivates me to continue working toward bettering myself and achieving my goals.
 
I believe that blogging has helped me to connect with other great bloggers over the past 2 and a half years that I have followed, which is a great thing because I believe that Jim Rohn's "you are the average of the five people you spend the most time with" quote applies to this digital age as well.

What we read online has significant potential to impact our thought patterns and can either build us up or tear us down on our path to achieve our goals, which is why I am so grateful for this respectful and thoughtful community.

Blogging Builds Discipline

One final way that I believe blogging is helping me to reach my goals is by building a key characteristic in achieving any meaningful measure of success in life, which is discipline.

Blogging over the past 2 and a half years for no monetary profit primarily due to the commitment to documenting my journey on financial independence has shown me what I am capable of when I am committed to my goals.

Regardless of whatever someone's goals may be, success is a byproduct of relentless tenacity, which is a trait I believe everyone can build upon over the duration of their life.

Concluding Thoughts:

The advent of the Internet has been beneficial to those that know how to use it to their advantage by holding themselves accountable, amongst a supportive community, and building discipline in the process.

I truly believe that over the past 2 and a half years I have benefited tremendously from operating this blog for the foregoing reasons, and I look forward to continuing to share my thoughts along my journey to financial independence.

Discussion:

Are you currently blogging or have you ever blogged?

If so, have you found blogging to be beneficial in the ways that I have?

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

Tuesday, November 10, 2020

October 2020 Dividend Income

 As I'm writing this blog post, I'm about halfway into my 6 day break from work (due to recently taking 4 vacation days) and I couldn't have received any better weather during my vacation. Needless to say, we haven't been fortunate enough to experience warm, sunny days in November in years (it's been 60 to 70 degrees every day this past week).

With that aside, I will be getting into the intent of this post, which is to detail the dividends that I received during the month of October 2020.






Analysis:

During the month of October 2020, I received $75.72 in net dividends.

Against the $73.79 in dividends collected in July 2020, this represents 2.6% quarterly growth.

More impressive, is the fact that this represents 80.7% YoY growth compared to the $41.91 in dividends received in October 2019.

More specifically, I received $62.98 in net dividends from 16 companies within my Robinhood portfolio. Additionally, I received $12.50 from 6 companies within my Webull portfolio. Lastly, I received $0.24 in dividends from 11 companies within my M1 Finance portfolio.

The $1.93 increase in my net dividend income from July 2020 to October 2020 was as a result of the following activity within my taxable portfolios:

My net dividends received from GEO Group (GEO) declined by $2.24 across my Webull and Robinhood accounts due to the stock's recent dividend cut.

Conversely, my net dividends received from W.P. Carey (WPC) increased by $0.01 in my Robinhood account as a result of the stock's recent dividend increase.

My net dividends received from Realty Income (O) also increased by $0.01 within my Robinhood account due to the stock's recent dividend increase.

My net dividends received from STORE Capital (STOR) were boosted by $0.17 due to its recent dividend increase across my Webull and Robinhood accounts.

My net dividends received from Philip Morris International (PM) increased by $0.27 within my Webull and Robinhood accounts as a result of the stock's recent dividend increase.

My net dividends received from Altria Group (MO) were boosted by $0.34 due to the stock's recent dividend increase in my Webull and Robinhood accounts.

My net dividends received from GlaxoSmithKline (GSK) increased by $0.13 as a result of the stock's previous dividend announcement.

Finally, my net dividends increased $3.24 as a result of my reduction in Robinhood margin used.

Concluding Thoughts:

While my net dividends received changed very little from July 2020 to October 2020, it's encouraging that they managed to increase given that I sustained a significant dividend cut from GEO that was first reflected in this income report.

Fortunately, I will be resuming my previous capital deployment schedule of ~$1,500/month beginning this month, so my dividend income should begin to make significant progress once again.

I am anticipating that my net dividends received in January 2021 will represent at least 10-15% growth over October 2020 as a result of my capital deployment in the weeks ahead.

Discussion: 

How was your October in terms of dividend income?

Were any recent dividend cuts that you endured reflected in your October 2020 dividend income as was the case with GEO for me?

Thanks for reading and I look forward to replying to any comments that you leave in the comment section below!

Tuesday, November 3, 2020

October 2020 Dividend Stock Purchases

Readers will have to forgive me for sounding like a broken record over the past number of months, but we're already in November as I'm writing this blog post!

This year continues to fly by and as a result, I am in crunch time as far as trying to achieve my personal and financial goals for the year.

Without further ado, I'll get into the crux of this post, which is to discuss my capital deployment during the month of October 2020. As a spoiler alert, there was a significant improvement in capital deployment during October 2020 as compared to September 2020.


Beginning with the activity in my retirement account, I deployed $378.00 in capital between my 7% contribution and my employer's 3% contribution.

Net of the $17.00 in sales charges, I set aside $361.00 in capital to build my Capital Income Builder (CAIBX) position, which boosted my share count from 130.445 starting October to 136.677 at the end of the month.

Factoring in $2.14 in annualized dividends/share, this boosted my net annual forward dividends by $13.34.

The additional net annual forward dividends as a result of my capital deployment during the month works out to a 3.70% net yield.

Transitioning to my Robinhood account, I lowered my margin used from $1,619.88 heading into October to just under $1,000 at the end of October.

Since margin used after the first $1,000 accrues 5% annualized interest charges, this $619.88 reduction in my margin as a result of $561.45 in capital contributions and $62.98 in net dividends resulted in a $30.99 increase in my net annual forward dividends.

Concluding Thoughts:

Overall, October was a great month in terms of capital deployment for me as I deployed $980.88 (my strongest month of capital deployment since I deployed nearly $3,000 in May 2020) during the month in the form of retirement contributions and deleveraging my Robinhood margin to just below $1,000.

This activity within my portfolio added $44.33 in net annual forward dividends to the portfolio, which equates to an average weighted yield of 4.52%.

Unfortunately, my net annual forward dividends fell $32.34 as a result of dividend announcements during October 2020 (i.e. Energy Transfer's distribution cut, as well as dividend increases from AbbVie and Visa), which led to my net annual forward dividends plunging from their all-time high of $1,281.99 set earlier in the month.

However, I was fortunate enough to end October 2020 with my highest end of month net annual forward dividend total of $1,254.52.

Given that I have now paid off virtually all of my personal debt going into November (aside from a few hundred dollars in credit card debt that I still have about 3 months to pay off without incurring interest charges and the $1,000 of interest free Robinhood margin), I anticipate that I will be able to deploy $1,500-$1,600 of capital in November.

Discussion:

How was your October in terms of capital deployment?

Did you initiate any new positions in dividend stocks during the month?

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

Tuesday, October 27, 2020

Expected Dividend Increase for November 2020

As I'm writing this blog post, we're just a couple months away from the year coming to a close. I've indicated it before in past blog posts and I will again: the speed with which this year is passing us by has not and will not cease to amaze me.

Since the only dividend increase that I'm expecting in my whole share portfolio during November is Iron Mountain and the dividend increase that I'm expecting from Hormel Foods (HRL) will be statistically insignificant, this blog post will be more of an update on dividend increases that were received in October from Visa and AbbVie, as well as the distribution cut from Energy Transfer.


Pending Dividend Increases/Expected Dividend Increases for October/Surprise Distribution Cut

Pending Increase #1: Visa (V)

I will reiterate my thoughts pertaining to Visa's (V) upcoming dividend announcement once again just as I did in my previous post of the series, which is that I'm expecting a 10.0% increase in V's quarterly dividend from $0.30/share to $0.33/share when V reports its earnings on Wednesday.

Even though this year has been difficult as a result of COVID-19 due to business closures and travel restrictions, the fact that V has plenty of room with regard to its payout ratio leaves me confident that although we won't see nearly as strong of a dividend increase as last year's 20% increase, V will still deliver a robust dividend increase all things considered.

UPDATE:

I was a bit surprised to learn that V announced a 6.7% increase in its quarterly dividend from $0.30/share to $0.32/share, which was slightly below my expectation outlined above, but I don't fault V for taking a conservative approach to their dividend increase for this year while the global economy gets back on track in the months ahead.

Across my 2 shares of V, this announcement increased my annual forward dividends by $0.16.

Missed Expected Dividend Increase #1: AbbVie (ABBV)

Given that AbbVie (ABBV) has reported earnings in November over the past couple years and has also announced its dividend increases in November, I failed to include ABBV's expected dividend increase.

ABBV has delivered fair operating results year to date, especially considering the impact of COVID-19 on both its Botox Cosmetic and Therapeutic businesses.

As a result of ABBV's operating results and the accretive impact of its acquisition of Allergan earlier this year, Yahoo Finance analysts are expecting $10.44 in EPS this year and $12.14 in EPS next year, which leaves plenty of room for a high-single digit dividend increase.

I am expecting ABBV to announce a 9.3% increase to its quarterly dividend from $1.18/share to $1.29/share when the company reports earnings this Friday.

UPDATE: 

ABBV managed to exceed my expectations as the company announced that it was hiking its quarterly dividend 10.2% from $1.18/share to $1.30/share.

Across my 6 shares of the stock, my annual forward dividends were boosted by $2.88 as a result of the above dividend announcement.

Distribution Cut: Energy Transfer (ET)


While this did catch me a bit by surprise in that ET's distribution remained relatively well covered prior to the announcement of its distribution cut, I do understand the rationale for the decision to cut the distribution.

When considering the possibility of contending with penalties for operating without a permit in the case of DAPL and additional disputes pertaining to the Mariner pipeline in Pennsylvania, as well as ET's debt load, I think that despite how painful this cut was for me, it was a necessary one for the continuity of the business going forward.

It also provided a much needed reminder for me to focus more on dividend growth and capital appreciation going forward, which is why I will be emphasizing the purchase of SWANs such as PepsiCo (PEP), Johnson & Johnson (JNJ), and General Dynamics (GD) in the weeks ahead.

This distribution announcement resulted in a $35.38 plunge in my annual forward dividends/distributions across my 58 units of ET.

Expected Dividend Increase for November: Iron Mountain (IRM)

Staying on the theme of reiterating my outlined expectations in the previous post of this series, I am doubling down on my thoughts relating to Iron Mountain's (IRM) upcoming dividend announcement.

Given that IRM is working to reduce its AFFO payout ratio to a more sustainable payout ratio that is in line with its data center REIT peers, I'm not expecting a significant increase in IRM's dividend.

Due to this stated objective of IRM, I am expecting that IRM will announce a 1.1% increase in its quarterly dividend from $0.6185/share to $0.6250/share.

This announcement would increase my annual forward dividends by $0.208 across my 8 shares of IRM.

UPDATE:

I initially thought that IRM's earnings were going to be reported on October 29, but I noticed after I published this blog post that IRM will be reporting earnings on November 5.

Concluding Thoughts:

Aside from the distribution cut from ET in the final few days of this month, I was pleased with the dividend announcements this month as V and ABBV both delivered nice dividend increases, especially in light of how this year has been on the dividend announcement front. 

Despite the $3.04 uptick in annual forward dividends from V and ABBV, my annual forward dividends declined $32.34 as a result of the halving of ET's distribution.

Discussion:

Have you benefited from any first time dividend increases as I did from V's recent dividend announcement?

Has your portfolio stabilized in terms of dividend announcements as mine has over the past couple months (aside from ET's recent announcement)?

As always, I appreciate your readership and look forward to any comments that you are free to leave in the comment section below!

Tuesday, October 20, 2020

My Single Biggest Takeaway After 3 Years of Dividend Investing

It was just a few weeks ago that I reached a massive milestone on my dividend growth investing journey, which was the 3 year mark of when I began investing and it was almost exactly 3 years ago that I received my very first dividend ($1.35 courtesy of GPC).

It has been such an amazing journey over the past 3 years, which aside from beginning my investing career, also led to the very birth of this blog, as well as my work on Seeking Alpha.

In this blog post, I'll be discussing my biggest takeaway after 3 years of dividend investing. If you haven't read my previous two posts of this series, be sure to check out my lessons learned after one year as a dividend investor and my lessons learned after two years as a dividend investor.



If you had told me just 9 months ago that 2020 would be a year in which my portfolio sustained 8 dividend cuts and 1 dividend suspension, I sure wouldn't have believed you!

Yet that is exactly what has transpired since the dividend cuts began to trickle in this spring and into the summer as a result of the unprecedented government response with the goal of curbing the spread of COVID-19.

To date, my portfolio's net annual forward dividends have declined by $73.858 this year as a result of dividend announcements that have been increases, cuts, and suspensions. 

When considering that the weighted monthly average of my annual forward dividends is around $1,135 year to date, this works out to a 6.5% decline in my annual forward dividend income as a result of dividend announcements.

While this news would have been deflating to the me of 9 months ago had you left out the details of the extent to which the world has been locked down since early this spring, I find it absolutely amazing that even in the midst of a global pandemic and the resulting aggressive government response to combat the virus, my portfolio's net annual forward dividends declined by merely 6.5%!

Despite all of the twists and turns that this year has taken along the lines of COVID-19 and unexpected expenses on my end that somewhat limited my ability to deploy capital at the rate I intended at the beginning of this year, my net annual forward dividend income of $1,282 at the time of writing this post is an all-time high.

I would argue that out of my numerous takeaways on dividend investing the past few years, this is my most powerful yet. My portfolio experienced its worst year of dividend announcements this year and I encountered a few thousand dollars of unexpected expenses during the year, but my portfolio's net annual forward dividends is the highest it has ever been.

This really goes to show that dividend investing in the form of fresh capital investments (even when capital is somewhat limited), dividend announcements (which in any "normal" year would lead to mid-single digit growth in annual net forward dividends for my portfolio), and reinvestment can overcome even the most challenging years.

Concluding Thoughts: 

I hope that this blog post was a ringing endorsement of the effectiveness of dividend investing in an average person's ability to actively work toward achieving financial independence.

2020 has been one hell of a year to be an investor in terms of volatility, but if there is a single investing strategy that has allowed me to sleep well at night even in the midst of a global pandemic and an election year, it has been dividend investing.

Even in a year of chaos, dividend investing has been one of the few constants in my life, which is why I firmly believe dividend investing is by far the most powerful investing strategy for most regular Joes and Janes.

Discussion:

What's your biggest takeaway from 2020 as a dividend investor?

How has your dividend income fared this year from a dividend announcement standpoint?

As always, I greatly appreciate this audience's readership and welcome any comments that you may have in the comment section below.

Tuesday, October 13, 2020

September 2020 Dividend Stock Purchases

 As I'm taking the time to write this post, it's nearly the middle of October!

We just experienced our first overnight freeze here in Central Wisconsin a few nights ago, which means that fall is in full effect and our first snowfall is likely just a few weeks ago.

With that side note out of the way, I will be delving into the intent of this post, which is to discuss my dividend stock purchases during September.


Starting with the activity in my retirement account, I deployed $317.43 in capital between my 7% contribution, my employer's 3% contribution, and the $63.66 in dividends during the month that were reinvested.

Net of the $11.44 in sales charges, I deployed $305.99 in capital to my Capital Income Builder (CAIBX) position, which boosted my share count from 125.273 heading into September to 130.445 going into October.

This increased my annual forward dividends by $11.07, which equates to a net yield of 3.62%.

Moving to my Robinhood account, my margin fell from $1,683.91 at the beginning of September to $1,619.88 at the end of September as a result of the net dividends of $64.03 that I received in my Robinhood account during the month.

This reduction in my margin helped to pad my annual forward dividends by $3.20 when factoring in the 5% interest rate on Robinhood margin over the first $1,000.

Concluding Thoughts:

I deployed $370.02 in capital (including dividend reinvestment) during September and added $14.27 in annual forward dividend income as a result of my capital deployment, which works out to an average weighted yield of 3.86%.

When also including the dividend announcements during the month of September for my portfolio, my annual forward dividend income was up just over $17 and I came into October just over 1% away from my all-time high annual forward dividend income of $1,252.

I am continuing to make significant progress in deleveraging my Robinhood margin and anticipate that I will have all margin repaid by the end of October (aside from the $1,000 of interest free margin). My credit card debt was less than $2,000 heading into October (most of which is interest free until next March), which means that I will be able to resume my $1,500/month capital deployment schedule starting in November.

Discussion:

How was your September in terms of capital deployment?

Were you fortunate enough to not have endured a dividend cut in your portfolio's dividend announcements during September?

I appreciate your readership and look forward to replying to your comments in the comment section below!

Tuesday, October 6, 2020

September 2020 Dividend Income

Summer ended nearly 2 weeks ago and it has become abundantly clear as we just experienced our first overnight freeze here in Central Wisconsin.

In just a few more weeks, we'll likely be experiencing our first snowfall, which will usher in 5 months of unpredictable winter weather!

With that aside, I'll be delving into the intent of this blog post, which is to examine the dividends that I collected during the month of September.








Analysis:

During the month of September, I received $139.46 in net dividends against the $136.28 in dividends that I collected in June 2020, which represents a 2.3% quarterly growth rate.

Even more impressive, is the fact that the $139.46 in net dividends received during the month represents a 99.2% YoY growth rate compared to the $70.00 in dividends collected in September 2019.

Delving into more detail, I received $64.03 in dividends from 20 companies within my Robinhood portfolio net of the $5.00 in Robinhood Gold fees and $2.75 in Robinhood Gold margin costs. I collected $11.30 in dividends from 6 companies within my Webull portfolio. I also collected $63.66 in dividends from my CAIBX mutual fund holding within my employer-sponsored retirement account. Finally, I received $0.47 in dividends from 24 companies within my M1 Finance portfolio.

The additional $3.18 in net dividend income from June 2020 to September came as a result of the following activity within my portfolios:

The dividends that I received from my position in BP Plc (BP) declined $3.46 as a result of BP's recent dividend cut.

I also received an additional $0.04 in dividends from my position in J.M. Smucker (SJM) due to its recent dividend increase.

I received $3.28 less in dividends from my position in Wells Fargo (WFC) as a result of its recent dividend cut.

I received $6.98 in additional dividends as a result of continued contributions to my CAIBX mutual fund holding within my retirement account.

I benefited from $2.91 less in Robinhood margin costs as a result of my commitment to reducing my Robinhood margin used down to $1,000 (as the first $1,000 of margin used is interest free).

My M1 Finance dividend income fell $0.01, which was as a result of BP's dividend cut.

Concluding Thoughts:

September marked yet another record month in terms of dividend income, which is really what the harnessing of DGI in the pursuit of financial independence is all about!

Despite the challenges that COVID-19 have posed for me from a dividend standpoint and the fact that dividend announcements this year have resulted in roughly a 7% decline in my annual forward dividends, my annual forward dividends are currently at a record $1,270 at the time that I am writing this post.

This just goes to show how powerful the DGI strategy is when the three aspects of it are utilized (i.e. fresh capital investment, dividend growth, and dividend reinvestment) even in the middle of the most challenging business environment arguably in most of our lives.

I am looking forward to soon once again resuming my ~$1,500/month capital deployment schedule beginning next month, which I am confident will really begin to advance my annual forward dividends in the most meaningful way since I began investing in September 2017.

Discussion: 

How was your September in terms of dividend income?

Did your portfolio's dividend cuts show themselves for the first time in September as was the case for mine with BP and WFC?

I'm grateful for your readership and welcome your comments in the comment section below!

Tuesday, September 29, 2020

Expected Dividend Increases for October 2020

At the time of my writing this blog post, the third quarter of 2020 is fast approaching its end, which leaves us with only one quarter to work toward crushing our goals for this year. The speed with which this year is passing us by never ceases to amaze me!

With that aside, I'll be discussing the dividend increases that I received during the month of September (spoiler: I was fortunate enough not to endure any dividend cuts during the month of September), and I'll be looking ahead to expected dividend increases for the month of October.


Actual Dividend Increases for September:

Dividend Increase #1: Realty Income (O)

Starting off with arguably the most consistent dividend payer in my portfolio, Realty Income (O) once again met my expectation of a 0.2% increase in its monthly dividend as I outlined in my previous post of this series, with O increasing its monthly dividend from $0.2335/share to $0.2340/share.

O's dividend announcement resulted in a $0.042 increase in my annual forward dividends across my 7 shares of the stock.

Dividend Increase #2: W.P. Carey (WPC)

Moving to yet another incredibly consistent REIT within my portfolio, W.P. Carey (WPC) announced a 0.2% increase in its quarterly dividend $1.042/share to $1.044/share, which was once again in line with my expectations.

This one-two punch of O and WPC has never failed to impress me with steady dividend increases since I initiated my positions in early 2018.

WPC's dividend announcement helped to pad my annual forward dividends by $0.04 across my 5 shares of the stock.

Dividend Increase #3: STORE Capital (STOR)

Staying on the theme of high-quality REITs, STORE Capital (STOR) is my newest holding of the three REITs highlighted in this section of the post, with my position dating back to March of this year when I went on my buying spree as the financial markets were tanking.

Because I haven't owned STOR for much longer than 6 months, I blanked on the dividend increase that was scheduled for September.

In light of the significant disruptions of COVID-19 to just about every sector of the economy, I was very pleased with STOR's 2.9% increase in its quarterly dividend from $0.35/share to $0.36/share.

Across my 17 shares of STOR, my annual forward dividends were boosted by $0.68.

Dividend Increase #4: Philip Morris International (PM)

Moving to the tobacco industry, Philip Morris International (PM) also managed to meet my expectations, raising its quarterly dividend 2.6% from $1.17/share to $1.20/share.

Across my 9 shares of PM, my annual forward dividends surged $1.08 as a result of PM's dividend increase.

Dividend Increase #5: Lockheed Martin (LMT)

Still sticking with the theme of consistency, Lockheed Martin (LMT) managed to meet my expectations with its announcement that it was increasing its quarterly dividend 8.3% from $2.40/share to $2.60/share.

LMT's dividend announcement resulted in a $0.80 boost to my annual forward dividends across my single share of the stock.

Dividend Increase #6: General Mills (GIS)

After not having raised its dividend since June 2017 following its $8 billion acquisition of Blue Buffalo, General Mills (GIS) recently reported 9% YoY growth in its revenue and $1.00/share in adjusted earnings versus $0.87/share analyst expectations for its first quarter, which prompted the company to announce a 4.1% increase to its quarterly dividend from $0.49/share to $0.51/share.

I had gotten so used to GIS not raising its dividend, that I had failed to consider that the company would eventually be increasing its dividend, so I was pleasantly surprised by the news last week.

Across my 4 shares of the stock, my annual forward dividends were boosted by $0.32.

Expected Dividend Increases for October:

Expected Dividend Increase #1: Visa (V)

As a result of owning shares of Visa (V) less than a year, I mistakenly assumed that V would be announcing its dividend increase in September, but a few weeks ago, I realized that V has historically announced dividend increases in late October.

I would reiterate the following that I outlined in my previous post of this series as it pertains to V:

"Despite a difficult year for Visa (V) amid reduced consumer spending due to travel restrictions and the closure of many across the world, I remain confident that V will deliver a dividend in the weeks ahead.

While I don't envision a teens or twenty percent plus dividend increase being announced as I believe V's management team and Board of Directors will be conservative in their dividend announcement, I am forecasting a 10.0% increase in the quarterly dividend from $0.30/share to $0.33/share.

Across my 2 shares of V, I am forecasting a $0.24 boost in my annual forward dividends."

Expected Dividend Increase #2: Iron Mountain (IRM)

Given that Iron Mountain (IRM) is focused on reducing its AFFO payout ratio from its current mid-70% range to the high-60% range to bring the AFFO payout ratio in line with its data center REIT peers, I expect that dividend growth will significantly lag AFFO growth over the next 2-3 years.

As a result, I am forecasting that IRM will announce a 1.1% increase in its quarterly dividend from $0.6185/share to $0.6250/share.

If my prediction proves to be correct, IRM's dividend increase would result in a $0.208 padding to my annual forward dividends across my 8 shares of the stock.

Concluding Thoughts:

Across the board, this month was the strongest month in terms of dividend increases since earlier this year in February, when dividend announcements during the month boosted my annual forward dividends by $3.00.

My annual forward dividends managed to increase $2.962 as a result of the dividend announcements in September, which would require an investment of $74.05 to replicate, assuming a 4% yield.

This development suggests that the worst is behind my portfolio and I fully expect my annual forward dividends to grow each and every month to close out this year, especially as I am less than 6 weeks away from being able to fully shift my focus from paying off debt back to dividend growth investing.

Discussion:

How was your month along the lines of dividend announcements?

Did you benefit from any first time dividend increases as I did with STOR and LMT this month?

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

Tuesday, September 22, 2020

It's All About The Savings Rate...

Over the past few weeks, I have been thinking more about the importance of savings rate within the context of achieving financial independence, especially at a relatively early age as I am striving to do.

This all came about when one weekend, I decided to tally my earnings history since I began my first job shortly out of high school in 2015 as a cashier at ShopKo while I was attending college. 

I realized that a few paychecks ago, I surpassed $100,000 in cumulative gross income in my previous 5 years.

This led me to also tally the amount that I have saved during that same time, which confirmed to me that I am roughly on track to achieving my long-term goal of financial independence at an early age.


Image Source: Pexels

My Savings Rate To Date Is ~63%

When factoring in the $105,700 that I have earned between my first job at ShopKo, my current job, and my Seeking Alpha side hustle against the $66,900 in savings during that time (including my $38,000 cost of my 4 year degree and my $32,900 net worth, as well as factoring in the $4,000 in savings that I started with around the time that I began my first job at ShopKo), my savings rate comes in at just over 63%.

From an early age, I was always more of a saver than a spender. This was especially the case when I learned the power of dividend growth investing, so my cumulative savings rate was about what I expected it would be.

It also helped that I have been able to live with my parents rent free for the majority of that time, which helped me to graduate debt free last August, saving me from having to pay interest expenses.


Image Source: Mr. Money Mustache

Given that my goal is to achieve financial independence by age 35 and that I'm 12 years away from turning 35, I essentially need to maintain my cumulative savings rate to date in order to achieve this goal.

I built in a 20% margin of safety as far as my expenses are concerned as I'm currently only spending about $1,000 a month, but assumed monthly expenses of $1,200 and that my current income level would remain the same for the duration of the 13 years it would take for me to reach FI as illustrated above.

My expenses could very well end up being notably higher than the above should I decide to get married or have kids, but I also figure that my income will likely gradually rise over the next 13 years, so I believe it will ultimately balance out.

Concluding Thoughts:

While I have known the importance of minimizing unnecessary expenses and maximizing income for several years now, compiling this blog post really reiterated the importance of doing so as I continue on my journey of attaining financial independence.

I'm more energized than I ever have been to more carefully scrutinize my expenses and maximize my income, and I'm looking forward to the next few years of my career as I build upon my skillset and presumably, my earning potential.

Discussion:

What has your savings rate been over the years?

Are you currently on track to achieve financial independence at your target date/age?

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

Tuesday, September 15, 2020

Updated Personal & Financial Goals for 2020

Given that fall is barely a week away at the time that I'm writing this blog post, I thought it would be an appropriate time to reexamine my personal and financial goals for 2020 as it has been nearly 9 months since I initially set my goals for 2020.

There have been a few developments in my life over the past 9 months that have necessitated reevaluating my goals for the remainder of the year.   


Image Source: MyRoomIsMyOffice

Below are my updated financial goals for the year:

1. Collect $1,200+ in dividends for the year
2. End 2020 with $1,450 in annual forward dividends
3. Amass $35,000 in investments/end 2020 with a net worth of $45,000

Given that I have prioritized paying off various small debts over the past several months, this year hasn't quite been as favorable to me in terms of dividend income as I expected it would be when I set my goals 9 months ago.

Adding to the headwinds in terms of dividend income, is the fact that my portfolio has endured multiple dividend cuts and a dividend suspension this year primarily as a result of COVID-19.

It's for that reason I am revising my goal down from collecting $1,500 in dividends during the year to $1,200.

As it stands now, I am on track to collect about $1,125 in dividend income this year, so I believe that $1,200 is a realistic goal in that I will have to push myself a bit to achieve the goal given my continued deleveraging of my personal balance sheet.

As far as my second goal, I have revised my goal down from ending the year with $2,000 in annual forward dividend income to $1,450 for the same reasons that I outlined above.

I estimate that by late October, I will be entirely debt-free aside from $1,000 in interest free margin within my Robinhood portfolio, so I'll have two months to boost my annual forward income from about $1,300 by that point to $1,450 with dividend increases/dividend reinvestment/fresh capital contributions.

I'm also revising my investment/net worth target down significantly from $45,000/$60,000 to $35,000/$45,000, which I believe I will be able to barely meet in a base-case scenario.


Now that I've outlined my updated financial goals for the few months remaining in this year, I'll be discussing my updated personal goals for 2020.

1. Continue to publish at least one blog post each week
2. Publish at least one article a week on Seeking Alpha and reach 5,500 followers

Starting with my goal to publish at least one blog post each week, I feel that one blog post each week strikes a nice balance my personal life and pushing myself to produce content that I enjoy producing. 

Therefore, this goal remains the same as I outlined in my previous post when I set my goals.

Next, I am significantly reducing my goal of Seeking Alpha articles for 2020, and my follower goal as a result.

Initially, I was shooting for 100 articles this year, which would have been a pace of nearly 2 articles a week. 

I have actually been publishing an article each week on Seeking Alpha this entire year rather than the 2 that I used to publish, and despite the roughly 40% reduction in content production, my earnings from Seeking Alpha are slated to be only about 20% lower than last year.

I was compromising the joy that I got out of my Seeking Alpha side hustle for the sake of making only a bit more money, so I have been very pleased with my decision to cut back on Seeking Alpha and to make more downtime for myself on weekends.

One other time commitment that I mutually parted from was my agreement to write for I Prefer Income and to provide my input on the program.

The rationale behind this decision on my part was that I didn't feel I was an appropriate partner for I Prefer Income and I also wanted to prioritize my health to minimize the impact of burnout similar to my decision regarding cutting back on Seeking Alpha content production.

Concluding Thoughts:

While my goals were very attainable in 2019 and I achieved them with relative ease, I appear to have overcompensated with my goals this year in an effort to challenge myself.

Now that I have adjusted my goals to account for my overcompensation from too easily achieving last year's goals, I believe that I can realistically achieve this year's goals as long as I continue to remain disciplined and committed to accomplishing them.

I'm looking forward to these last few months of the year to exit this year with an even stronger foundation than when I entered this year.

Discussion:

Do you put pen to proverbial paper to make note of your goals or do you just note them mentally?

Have you set any goals that you felt were realistic at the time you set them only to realize they weren't attainable for the given time frame?

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

Sunday, September 6, 2020

August 2020 Dividend Income

I'm surprised that another month has passed us by already, but pleased to announce that my portfolio recorded yet another record month in terms of dividend income for the middle month of a quarter.

Despite deploying limited capital over the past few months due to paying off debt, the capital that I did deploy that was used to deleverage my Robinhood margin helped tremendously in boosting my dividend income during the month.

Without further ado, I present my dividend income for August 2020:






Analysis:

During the month of August, I collected $91.19 in net dividends against the $86.62 in dividends collected in May 2020, which represents a 5.3% quarterly growth rate.

More striking, is the fact that the $91.19 in net dividends received during the month represents an 86.4% YoY growth rate compared to the $48.93 in dividends collected in August 2019!

Going into more detail, I received $78.96 in dividends from 15 companies within my Robinhood portfolio net of the $5.00 in Robinhood Gold fees and $3.03 in Robinhood Gold margin costs. I also collected $11.93 in dividends from 3 companies within my Webull portfolio. Finally, I collected $0.30 from 14 companies in my M1 Finance portfolio.

The $4.57 increase in my dividends from May 2020 to August 2020 was as a result of the following activity within my portfolios:

I received an additional $0.61 in dividends from my positions in British American Tobacco (BTI) within my Robinhood and Webull portfolios.

As a result of Tanger Factory Outlet Centers (SKT) recent suspension of its dividend, my dividend income from my SKT position was reduced by $3.93.

I also received $0.07 less in dividends from Equitrans Midstream Corporation (ETRN) as a result of the recent merger (including the $0.02 reduction in my M1 Finance portfolio).

My Robinhood Gold/margin costs in August of $8.03 were $7.96 lower than the $15.99 in costs during May 2020.

Concluding Thoughts:

Despite an effective distribution cut via ETRN and a dividend suspension via SKT taking effect this month, my dividend income in August managed to advance by mid-single digits over May 2020.

This was primarily due to my deleveraging of over $1,900 of Robinhood margin over the past few months.

Given that I believe the worst is finally behind my portfolio and I'm not expecting any further dividend cuts from the companies that are scheduled to pay dividends in the middle month of the quarter, I am expecting a new record in November for a middle month of the quarter.

Discussion:

How was your dividend income during August?

Did your portfolio feel the impact of cuts/suspensions during August?

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

Tuesday, September 1, 2020

August 2020 Dividend Stock Purchases

I'm gradually building my position in Capital Income Builder (CAIBX) within my retirement account as I'm continuing to deleverage my Robinhood margin and pay off credit card debt.

This month was another month of relatively little activity in terms of capital deployment, but with each passing month, I am getting closer to resuming my previous capital deployment of $1,500-$2,000/month.

With that aside, I'll delve into my dividend stock purchases for the month of August 2020.

As shown above, between my 7% gross contribution and my employer's 3% match on the contributions, I was able to contribute gross capital of $293.34 and $280.13 in capital net of sales charges to my retirement account.

These contributions to my retirement account helped my CAIBX position grow by 4.727 shares from 120.546 entering into August to 125.273 shares entering into September.

Factoring in $2.14 in annual forward dividends/share, the additional 4.727 shares of CAIBX boosted my annual forward dividend income by $10.12, which equates to a net yield of 3.61%.

When also including the $78.96 reduction in my Robinhood margin from $1,762.87 at the start of August to $1,683.91 at the end of August, my annual forward dividend income increased by $3.95 (given the 5% cost of capital for Robinhood margin).

Concluding Thoughts:

Overall, I deployed $359.09 in capital (including dividend reinvestment) during the month of August 2020 and added $14.07 in annual forward dividend income as a result of my capital deployment, which works out to an average yield of 3.92%.

When also factoring in the dividend announcements during the month of August, my annual forward dividend income is down just under $7 and I am about 2.2% off of my all-time high annual forward dividend income of $1,252.

Given that I would like to have most of my $4,000 in debt paid off before I refocus on investing, it will be a few more paychecks before I am able to revert to my previous $1,500-$2,000/month capital deployment schedule.

Discussion:

Did you experience any dividend cuts during August like I did with GEO and BP?

How was your month in terms of capital deployment?

As always, I thank you for your readership and look forward to reading your comments in the comment section below!



Tuesday, August 25, 2020

Expected Dividend Increases for September 2020

I feel like a broken record every time I write these blog posts lately, but another month is on the verge of passing us by, which will mean the year is officially 2/3 over!

With that aside, I'll be delving into the intent of this post by examining the dividend announcements during this month and previewing dividend announcements for next month. In the event that any more dividend cuts or increases come in over the next week, I will update this post to reflect such dividend announcement activity.


Dividend Announcements Since The Last Post:

Dividend Increase #1: Altria Group (MO)

Altria Group (MO) threw a curveball to shareholders a few weeks ago when it announced its dividend in late July rather than the late August that we have grown accustomed to over the years.

MO announced a 2.4% increase in its quarterly dividend from $0.84/share to $0.86/share, which was slightly below my expectations of a 3.6% increase in the quarterly dividend to $0.87/share as I predicted in my previous post of this series.

Overall, I'm pleased with MO's dividend increase this year as the increase still outpaced inflation despite an unparalleled societal response to COVID-19 that has upended the results of many businesses throughout the economy.

It goes without saying, but any dividend increase in a generational crisis such as this one is most definitely welcomed and a testament to the quality of MO as a business.

Across my 17 shares of MO, this dividend announcement boosted my annual forward dividend income by $1.36.

Dividend Increase #2: Lowe's (LOW)

Lowe's (LOW) announced last week that they were increasing their quarterly dividend 9.1% from $0.55/share to $0.60/share.

The company opted to delay its usual late May to early June dividend increase by a quarter, which was certainly a prudent move in light of the uncertainty.

While we certainly aren't out of the woods yet relating to COVID-19's potential disruptions to the economy and a widely distributed vaccine isn't a guarantee, I remain confident that the quality of Lowe's as a business will continue to deliver outsized results through this pandemic.

Across my 4 shares of LOW, this dividend announcement padded my annual forward dividend income by $0.80.

Dividend Cut #1: The GEO Group (GEO)

While GEO Group's (GEO) dividend cut came as a bit of a surprise, I understand why the company took the action that it did to reduce its quarterly dividend by 29.2% from $0.48/share to $0.34/share earlier this month.

Given that COVID-19 has resulted in lower occupancy levels at several of GEO's facilities and programs beginning in March and persisting through Q2, GEO has lowered its AFFO guidance for FY 2020 significantly from $2.57-$2.67/share in February to $2.29-$2.33 in August.

Adding to the rationale for the dividend cut, is the fact that the company will be allocating an additional $50-$100 million annually to debt repayment, which will help the company to deleverage to more sustainable leverage ratios for the long-term while also maintaining its status as a REIT.

Although the move hurts my dividend income in the short-term, I appreciate that GEO Group's management team made a decision that will be beneficial to the company in the long-term.

Across my 16 shares of GEO, my annual forward dividend income declined $8.96.

Dividend Cut #2: BP Plc (BP)

BP Plc (BP) announced earlier this month that it opted to cut its quarterly dividend by 50% from $0.63/share on its ADRs to $0.315/share.

Given the decline in global oil demand this year and fall in WTI crude's price from a 52 week high of $62 a barrel to the $40 range that it has been hovering around for a while now, it wasn't surprising to see that the company opted to cut its dividend for the near future as oil prices continue their gradual recovery.

Across my 11 shares of BP, this dividend announcement resulted in a $13.86 drop in annual forward dividend income.

Expected Dividend Increases for September:

Expected Dividend Increase #1: Realty Income (O)

Moving into the expected dividend increases section of this post, there are a number of very reliable dividend growers that I am confident will deliver dividend increases in the weeks ahead.

Starting with one of the most consistent dividend growers in my portfolio, I am expecting Realty Income (O) to increase its monthly dividend 0.2% from $0.2335/share to $0.2340/share.

As we have come to expect from a company of such high-quality, Realty Income has delivered solid results even in the midst of the COVID-19 pandemic, growing its AFFO/share by 6.7% YoY from $1.63 through H1 2019 to $1.74 through the first half of this fiscal year.

Across my 7 shares of O, I anticipate that my annual forward dividend income will be boosted $0.042.

Expected Dividend Increase #2: W.P. Carey (WPC)

Yet another consistent dividend grower in my portfolio is W.P. Carey (WPC), which has also delivered steady results.

In light of WPC's essentially flat AFFO YoY in the midst of an unparalleled operating environment fraught with challenges, I anticipate that W.P. Carey will announce a 0.2% increase in its quarterly dividend from $1.042/share to $1.044/share.

Across my 5 shares of WPC, I am forecasting my annual forward dividend income will be boosted $0.04 following WPC's expected dividend increase.

Expected Dividend Increase #3: Philip Morris International (PM)

Moving to Philip Morris International (PM), my second largest tobacco holding, I am anticipating a 2.6% increase in the quarterly dividend from $1.17/share to $1.20/share.

PM has reported relatively solid results through the first half of this fiscal year, with adjusted diluted EPS declining 2.0% YoY and increasing 8.0% on a like-for-like basis, excluding currency.

Across my 9 shares of PM, this dividend announcement would result in a $1.08 hike to my annual forward dividend income.

Expected Dividend Increase #4: Lockheed Martin (LMT)

As I outlined in a Seeking Alpha article on Lockheed Martin (LMT) earlier this month, I was quite impressed with the company's results through the first half of this year.

In short, the company grew its diluted EPS 7.9% YoY from $11.00 through H1 2019 to $11.87 through the first half of this fiscal year, while FCF surged 38.0% YoY!

Despite a difficult operating environment, LMT has shown little signs of slowing down as the company's fundamentals have improved in virtually every key area through a year fraught with uncertainty.

LMT's resiliency leads me to believe that the company will be announcing an 8.3% increase in its quarterly dividend from $2.40/share to $2.60/share.

This would result in a $0.80 increase in my annual forward dividend income given my single share of the stock.

Expected Dividend Increase #5: Visa (V)

Despite a difficult year for Visa (V) amid reduced consumer spending due to travel restrictions and the closure of many businesses across the world, I remain confident that V will deliver a dividend increase in the weeks ahead.

While I don't envision a teens or twenty percent plus dividend increase being announced in September as I believe V's management team and Board of Directors will be conservative in their dividend announcement, I am forecasting 10.0% increase in the quarterly dividend from $0.30/share to $0.33/share.

Across my 2 shares of V, I am forecasting a $0.24 boost in my annual forward dividend income.

Concluding Thoughts:

Even though my annual forward dividend income dropped by $20.66 as a result of dividend announcements during the month of August, these declines have mostly been offset by the deleveraging of my Robinhood margin (via dividend income) and fresh capital investments in my Capital Income Builder (CAIBX) mutual fund within my retirement account.

My annual forward dividend income heading into September is down about a percent compared to what it was at entering into August and is just under 3% off of the $1,252 annual forward dividend income record that was set earlier this year prior to the barrage of primarily COVID-19 related dividend cuts.

Fortunately, September appears as though it will be my first month where dividend announcements are positioned to propel my annual forward dividend income forward as I believe the bulk of the dividend cuts are finally behind the portfolio.

Discussion:

How was your month in terms of dividend announcements?

As always, thanks for reading and I look forward to your comments in the comment section below.