Tuesday, January 28, 2020

January 2020 Dividend Stock Purchases

I just want to begin by saying that for all those who passed away in the helicopter crash on Sunday which led to Kobe Bryant's passing, they and their families remain in my thoughts and prayers. As I write this post, Kobe Bryant's passing from a couple days ago has sunk in and the healing process is still progressing for me.

As someone that has learned several valuable life lessons indirectly from Kobe over the years (probably deserving of its own post next week) and who deeply admired Kobe, this loss hits me pretty hard. I can only imagine the grief and sorrow that those closest to the victims of crash are experiencing at this time.

On a lighter note, the Milwaukee Bucks are a win away from at least securing a 0.500 season.. This is despite the fact that we are still over 2 weeks away from NBA All-Star Weekend and the season is barely half over!

With all that aside, since I don't anticipate any additional dividend stock purchases this month, I will be discussing my dividend stock purchases for January 2020 in this post.



Retirement Account Activity:

I entered this month with 87.442 shares of my mutual fund holding, Capital Income Builder (CAIBX). I ended the month with 91.109 shares of CAIBX as a result of the $244.00 in capital contributions to my retirement account between my employer and myself, of which $233.03 was invested after the sales charges shown above.

The 3.667 shares of CAIBX that were added this month boosted my annual forward dividends by $7.85, which equates to a 3.37% yield based on the $233.03 of net capital that was deployed during January in the retirement account.

Taxable Accounts Activity:

Transitioning to my Webull brokerage account, I added 4 shares to my position in Iron Mountain (IRM), bringing my total position to 8 shares.

The 4 shares of IRM added during the month of January at a total cost of $123.32 increased my annual forward dividends by $9.90, which is equivalent to an 8.02% yield on this block of shares.

I would refer interested readers to my recent Seeking Alpha article on IRM for a detailed explanation on my decision to double my position in the company.

Moving to the bulk of my activity during the month of January, the most recent activity in my Robinhood account was my purchase of 1 unit of Enterprise Products Partners (EPD) at a cost of $28.29, bringing my ownership to 28 units.

The $1.78 in annual forward distributions that were added as a result of this purchase work out to a 6.29% yield. I'm continuing to build upon my position in EPD because of the company's stable operating fundamentals and the steady distribution increases.

Prior to the purchase of EPD in my portfolio, I decided to add another share to my position in The GEO Group (GEO) at a cost of $15.37.

This brings my total position to 12 shares and added $1.92 in annual forward dividends to my portfolio income, which equates to an absurd yield of 12.49%.

I expect my article that provides rationale for this recent investment decision to be published on Seeking Alpha in the hours after I publish this blog post.

Simon Property Group (SPG) was a new position that I recently added to my portfolio, which I explained in a recent article on Seeking Alpha (please note the article is behind SA's paywall).

I initiated a 3 share position in SPG at a total cost of $435.24, which boosted my annual forward dividends by $25.20.

This works out to a yield of 5.79%, which is IMO a nice entry point for a company with the steady dividend growth of SPG and its stable operating fundamentals.

The last bit of activity in my Robinhood portfolio was when I decided to open a 2 share position in General Dynamics (GD) at a cost of $361.80.

When considering the $8.16 in annual forward dividends added by this purchase, my entry yield on this position is 2.26% (with a raise likely to be announced in March).

Like IRM and SPG, I recently explained the factors on Seeking Alpha (also behind the paywall now) that led me to initiate a position in GD.

Summary:

Overall, my annual forward dividends/distributions were boosted by $55.53, from $873.51 entering this month to $923.03 to end this month (note annual forward dividends/distributions are off by $0.01 d/t rounding on the IRM position).

Of the $55.53 of annual forward dividends/distributions added this month, $54.81 came directly as a result of my investments during this month.

On the $1,197.05 of net capital deployed during the month, this represents a 4.58% yield, which is right around my target yield of 4.0-4.5%.

Dividend increases during January 2020 chipped in the remaining $0.72 that was added to my income during the month.

Discussion:

How was your January in terms of capital deployment? Did you add any new positions like I did via SPG and GD?

As always, thanks for reading and I welcome any comments that you leave below.

Tuesday, January 21, 2020

Expected Dividend Increases for February 2020

As I write this, the Green Bay Packers are a couple days removed from their 37-20 loss to the San Francisco 49ers in the NFC Championship Game. As I had indicated in my November 2019 Dividend Stock Purchases post last month and last year (it still feels a bit weird to think that 2019 was last year), I didn't believe the Packers would advance past the NFC Championship Game, and I was unfortunately proven correct.

On the upside, the Bucks are continuing to prove in my mind why they are the odds on favorite to win the NBA championship. The Bucks took care of business against the Chicago Bulls on MLK Day at Fiserv Forum just as everyone expected, winning 111-98. Milwaukee's net rating of 12.0 means the Bucks are on track to post the best net rating in history while also unsurprisingly being on pace for 71 wins this season (after an impressive 39-6 thus far), the latter of which would make them only the third team in NBA history to do so.

Aside from the typical sports talk, the intent of this blog post is to recap the dividend increases that I have received in January, and to also predict the dividend increases for next month.

Admittedly, I am writing this post on the very day that I plan to publish it because I made it a point to relax this weekend, and my OCD-like tendencies otherwise prohibit me from not publishing my 79th consecutive Tuesday blog post. A blog post on a Wednesday? No way!

Anyway, with that all out of the way, let's delve into the dividend increases that I have been fortunate enough to receive to date in the month of January and what I'm expecting for February!


Increase #1: Realty Income (O)

True to form, Realty Income (O) announced another predictable dividend increase during the month of January roughly in line with my prediction outlined in my previous post in the series. O increased its monthly dividend 2.2%, from $0.2275/share to $0.2325/share. With another 4 small raises likely to come this throughout the rest of this year, O offers dividend growth that exceeds inflation. It's both fortunate and unfortunate that the company is viewed as a safe haven by so many other individual and institutional investors because I'd love to buy more of this company, but the valuation has become too rich for my liking over the past number of months.

Across my 4 shares, O's new dividend announcement boosted my annual forward dividends by $0.24.

Increase #2: Enterprise Products Partners (EPD)

As yet another steady dividend (or distribution rather) grower in my portfolio, Enterprise Products Partners (EPD) didn't disappoint. EPD raised its quarterly distribution for the 62nd time, with its quarterly distribution increasing 0.6%, from $0.4425/unit to $0.4450/unit.

Given my 27 units of EPD at the time of the new distribution announcement, my annual forward distributions increased $0.27.

Increase #3: Magellan Midstream Partners (MMP)

As Magellan Midstream Partners (MMP) has done for the past couple of distribution increases, it has completely eluded my radar. I was about to write that I hadn't yet received an increase from MMP, but in a surprising twist, I just learned that the company increased its distribution today rather than the announcement later this week that I was expecting based upon previous distribution history.

Just as expected, MMP announced a 0.7% increase in its quarterly distribution, up from $1.0200/unit to $1.0275/unit.

Across the 7 units of MMP that I own, this distribution announcement padded my annual forward distributions by $0.21.

Expected Dividend Increases for February 2020

Expected Increase #1: Digital Realty Trust (DLR)

Given Digital Realty Trust's (DLR) past dividend increases, I am predicting that the company will announce a status-quoesque 6.5% increase in its quarterly dividend from $1.08/share to $1.15/share.

With my 3 shares, this would boost my annual forward dividend income by $0.84.

Expected Increase #2: PPL Corp (PPL)

Given the uncertain nature of what the outcome will be with Brexit and PPL Corp's (PPL) exposure to that market, I wouldn't be surprised if we see another dividend increase that is fairly similar to the one last year.
It's for that reason, I am predicting that PPL will announce a 1.2% increase in its dividend, taking the quarterly dividend from $0.4125/share to $0.4175/share.

Across my 8 shares of PPL, this would increase my annual forward dividends by $0.16.

Expected Increase #3: The Home Depot (HD)

While I don't expect The Home Depot (HD) to repeat its absolutely monstrous 32% increase in its quarterly dividend from last year, I am expecting the company to increase its quarterly dividend from $1.36/share to $1.56/share.

This would add $0.20 to my annual forward dividend income as a result of the single share that I own.

Expected Increase #4: Genuine Parts Company (GPC)

As a relatively predictable dividend growth company, I am expecting Genuine Parts Company (GPC) to continue its trend of increasing its quarterly dividend in the 5-7% range.
I believe GPC will increase its quarterly dividend 6.2% from $0.7625/share to $0.8100/share.

Assuming this occurs, my annual forward dividend income would increase by $0.57 across my 3 shares.

Expected Increase #5: Prudential Financial (PRU)

Even though Prudential Financial (PRU) could afford to increase its dividend a good bit more than its earnings growth, I'm expecting PRU's dividend growth to decelerate a slight bit compared to the 11.1% last year.

I'm predicting that PRU's quarterly dividend will be increased from $1.00/share to $1.09/share.

Given that I own 3 shares of PRU, this would boost my annual forward dividends by $1.08.

Expected Increase #6: Albemarle (ALB)

Albemarle (ALB) is another dividend growth company in my portfolio that I predict will deliver high-single digit to low-double digit dividend growth this year.

I'm expecting an 8.2% increase in its quarterly dividend from $0.3675/share to $0.3975/share, which would result in an additional $0.60 in annual forward dividends for my portfolio given my 5 shares of ALB.

Expected Increase #7: Simon Property Group (SPG)

Given that Simon Property Group (SPG) has a recent history of increasing its quarterly dividend twice per year by $0.05 (late January to early February and late July to early August), I believe SPG will continue that trend in February.

A 2.4% increase in SPG's quarterly dividend from $2.10/share to $2.15/share would boost my annual forward dividends by $0.60.

Concluding Thoughts:

January may not have brought the most dividend/distribution increases in terms of volume or percentages, but it seems like the beginning month of every quarter brings with it a nice level of consistency pertaining to dividend and distribution increases.

All 3 companies that announced increases during January are among the most consistent in my portfolio, with quarterly dividend/distribution increases coming in at or near my estimates every time.

The $0.72 in annual forward dividend/distribution increases that I received during the month of January would require an investment of $18.00 at a 4% yield to replicate.

I expect to benefit from 7 dividend increases during the month of February, with 4 holdings expected to increase their dividends for the first time since I have initiated positions in them (DLR, PRU, ALB, and SPG).

Depending on the outcome of the dividend increases that I expect next month, February 2020 could go down as my new record in terms of the dollar amount of dividend increases in a single month!

For a comprehensive discussion that summarizes several of the reasons that steered me in the direction of dividend investing in the first place and how to eventually live off of dividends, I would refer interested readers to this post by Tom of Dividends Diversify.

Discussion:

How many dividend increases are you expecting for the month of February? Are you expecting any dividend increases for the first time since you initiated your new positions?


As always, thank you for taking the time to read the dividend increases that I received during the month of January and what dividend increases I am expecting to receive in February.

I look forward to any comments that you may leave in the comment section below.

Tuesday, January 14, 2020

December 2019 Dividend Income

As I write this post, we're just a couple days away from entering into 2020! It really is unbelievable to think back on how fast this year passed us by. With that in mind, now is a great time for me to go into further details about the dividend income that my investments generated for me in the very last month of 2019.






Analysis:

During the month of December, I collected $91.63 in dividends (although I also received $50.24 in long-term capital gains from my mutual fund holding, which purchased almost an entire share of CAIBX by itself).

This represents a 30.9% quarterly growth rate compared to the $70.00 collected in September 2019, and an even more impressive 70.2% YOY growth rate compared to the $53.84 in dividends produced in December 2018.

Breaking it down further, I collected $32.37 in dividends for my Robinhood account during the month, $9.63 in dividends in my Webull account, $49.15 in dividends in my retirement account, and the remaining $0.48 came from 24 companies of the 49 companies held in my M1 Finance account.

The $21.63 in additional dividends collected in December compared to September were as a result of the following developments by account:

Robinhood: 

Adjusting for Pepsi's dividend that was paid in September and the next that will be paid in January, there was no dividend growth in any of the companies that paid dividends in my Robinhood account during the month of December. Because Pepsi doesn't pay a dividend in December, this was responsible for the $1.91 decrease in dividend income originating from the Robinhood account that will be made up for in January.

Webull:

The entirety of the $9.63 collected in my Webull account during December came as a result of the dividend stock purchases that I made in October, when I added a share of UnitedHealth Group (UNH), Prudential (PRU), Visa (V), Wells Fargo (WFC), and Lockheed Martin (LMT).

Retirement:

The $42.01 in regular dividends that I received from my retirement account mutual fund holding, CAIBX, represented a $6.77 increase compared to September. The other component that led to higher dividend income in December compared to September was the $7.14 in special dividends that I collected from CAIBX as a result of the end of year dividend being larger than all the preceding dividends.

All told, I received an additional $13.91 from the retirement account compared to September.

Concluding Thoughts:

I'm relatively pleased with the month of December and it was a great way to close out the year, although I came up a bit short of the $100+ in dividend income that I was expecting for the month.

This was as a result of CAIBX's special dividend being a bit less than I thought it would be and less than it was last year. Had the special dividend been maintained compared to last year at $0.14/share rather than the $0.085 this year, my dividend income would have came much closer to the $100 mark.

Fortunately, I am confident that I will be able to finally break the $100 mark in March due to continued contributions to my retirement account, anticipated investment in my taxable accounts, and dividend increases to help boost my dividend income over that milestone.

Discussion:

How was your December in terms of dividend income? Did you have any new dividend payers in your portfolio during the month as I did?

Thank you for reading and I look forward to replying to any comments that you may leave below in the comments section.

Tuesday, January 7, 2020

December 2019 Dividend Stock Purchases

We've officially ushered in the New Year and the Milwaukee Bucks had quite a nail biter against a shorthanded (without Karl-Anthony Towns and Andrew Wiggins), but scrappy Timberwolves team last Wednesday!

Fortunately, they sent the fans at Fiserv Forum home with a 104-102 win to ring in the New Year with style. You won't catch me complaining about blowout wins for the Bucks, but it's the close wins like this one that prepare a team for success in the postseason.

Aside from the Bucks' win on Wednesday, a new month and a new year mean that it's time for us to examine the dividend stock purchases that I made to close out 2019!



Similar to last month's dividend stock purchases, the month kicked off with a purchase of another unit of Energy Transfer (ET) in my Robinhood account. I would add another unit to my ET holdings on two more occasions in my Robinhood account, and once in my Webull account.

The 4 units of ET that I ended up adding in December came at an average cost of $12.47/unit. Factoring in the current distribution of $1.22/unit, this equates to a 9.78% yield on this block of units. These purchases boosted my annual forward distributions by $4.88.

The next purchase that I made was Digital Realty Trust (DLR) in my Robinhood account, which I purchased 3 shares of at an average cost of $114.00 a share.

Given the annualized dividend of $4.32/share, my entry yield is 3.79% on this purchase. The great news is that DLR's dividend is also likely to be increased 6-7% next month, which will provide a nice boost in my annual forward dividends without having to wait too long after my purchase.

For those that are interested in a further explanation for my decision to initiate a position in DLR, I recently wrote an SA article on the company. This purchase added $12.96 to my annual forward dividends.

My final purchase in my taxable accounts came in my Webull account, when I purchased 1 share of Broadcom (AVGO) at a cost of $321.20.

AVGO's past few dividend increases really caught my attention and put the company on my radar. When I coupled the 4.05% starting yield on my purchase with the 13.3% annual earnings growth that Yahoo Finance expects over the next 5 years, it became clear that for those willing to stomach the volatility of AVGO's shares, this company is likely to continue delivering impressive dividend increases in the years ahead to really ramp up my yield on cost.

The purchase of AVGO boosted my annual forward dividends by $13.00, having purchased my share shortly after the news of the 22.6% dividend increase.

The final bit of activity came within my retirement account, where I invested $345.10 (including my employer's 3% match and the dividends/capital gains received during the month).

Accounting for the 4.5% sales charge, these contributions and the $49.15 in dividends/$50.24 in long-term capital gains collected from the CAIBX position, increased my holdings of CAIBX from 82.332 shares at the beginning of the month to 87.442 shares at the end of the month.

The 3.694 shares of CAIBX that were added as a result of capital contributions boosted my annual forward dividends by $7.91 while the 1.416 shares of CAIBX that were added as a result of dividends/long-term capital gains added the remaining $3.03 in annual forward dividends, for a total of $10.94 of additional annual forward dividends. This equates to an average yield of 3.17%.

Concluding Thoughts:

December was a somewhat light month compared to the past few months of capital deployment in the taxable accounts. I deployed $713.07 in capital within my taxable accounts during the month of December, while I also deployed $345.10 in capital within my retirement account, for total capital deployment of $1,058.17 during December.

The $41.78 in annual forward dividends/distributions added during the month equates to a 3.95% yield on the capital that I invested, which is right around my target of 4-4.5%.

Entering the month of December, my annual forward dividends/distributions were at $828.92 and ended the month at $873.51.

The $2.808 of dividend increases in terms of annual forward dividends/distributions accounted for the remainder of the income that was added during the month.

I ended 2019 with 45 whole share stock holdings, 23 unique fractional share holdings in my M1 Finance portfolio, and a mutual fund holding. Given that my only monthly dividend payer is Realty Income (O) and all my other holdings pay quarterly dividends, that equates to 284 payments throughout the course of the year heading into 2020 alone!

Discussion:

What are your annual forward dividends/distributions heading into 2020? Were you able to add any new positions to your portfolio as I was able to with the purchases of DLR and AVGO?

As always, thanks for reading my summary of dividend purchases during the month of December 2019. I look forward to reading and replying to any comments that you are welcome to leave in the comment section below!