Tuesday, September 14, 2021

August 2021 Dividend Income

As I'm writing this blog post, Labor Day has now passed and the official start of fall is only two weeks away. Having only received 1 of my 10 expected dividend increases for this month to date, the last 3 weeks of September are going to be jam packed with dividend increases.

Now let's delve into the intent of this blog post, which is to outline the record amount (for the middle month of a quarter) of dividends that I received in August 2021.




Analysis:

During August 2021, I collected $132.66 in net dividends. This represents a 13.4% quarterly growth rate compared to the $116.98 in net dividends that I received in May 2021.

Furthermore, August 2021's dividend income is a 45.5% year-over-year growth rate against the $91.19 in net dividends that I collected in August 2020.

Digging into dividend income by account, I received $120.63 in net dividends from 21 companies in my Robinhood account, $11.66 in net dividends from 3 companies in my Webull account, and $0.37 from 16 companies in my M1 Finance account.

The net dividends that I collected from May 2021 to August 2021 increased by $15.68 as a result of the following activity within my portfolio:

I received an additional $1.07 in net dividends from British American Tobacco (BTI) within my Robinhood and Webull accounts, which is the result of my purchase of two extra shares of the stock within my Robinhood account in June.

My net dividends collected from National Retail Properties (NNN) were $0.11 higher in my Robinhood account due to the recent dividend increase.

I received $2.70 in net dividends from Abbott Laboratories (ABT) for the first time within my Robinhood account, which was because I opened a position in the stock back in May.

My net dividends collected from Clorox (CLX) were $2.32 higher in my Robinhood account from starting a position in July.

I also received an additional $0.94 in net dividends from Realty Income (O) within my Robinhood account due to the stock's recent dividend increase and my decision to add to my position in May.

My net dividends collected from General Dynamics (GD) increased by $1.19 in my Robinhood account, which was the result of my decision to add to my position in May.

I received an extra $1.60 in net dividends from Lowe's (LOW) within my Robinhood account, which was a combination of adding a share in May and the dividend increase that was announced in May.

My net dividends collected from JPMorgan Chase (JPM) were $2.70 higher in my Robinhood account, which was due to my decision to initiate a position in July.

I also received an extra $0.50 in net dividends from CVS Health (CVS) within my Robinhood account, which was also the result of my decision to add to my position in May.

My net dividends collected from Verizon (VZ) were $2.51 higher in my Robinhood account, which was due to my purchase of four additional shares in June.

I received an extra $0.04 in net dividends from my M1 Finance account, which was due to the aforementioned dividend increase from LOW (a $0.01 boost to dividends), Norfolk Southern's (NSC) dividend increase (another $0.01 increase to dividends), and the timing of JPM's dividend payment ($0.02 in additional dividends).

Concluding Thoughts:

I'm pleased with my capital deployment to my portfolio and dividend increases over these past few months, which led to the healthy quarterly growth rate in my net dividend income from May to August.

Based on my capital deployment, I believe that November 2021 will see a net dividend income right around $150 and that by next August, my net annual dividends will be close to $200.

Discussion:

How was your August for dividend income?

Did you receive any dividends for the first time as I did from whole shares of ABT, CLX, and JPM?

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

Wednesday, September 8, 2021

August 2021 Dividend Stock Purchases

As I'm writing this blog post, there are just four months remaining in this year. This gives me four months to advance my net annual forward dividends from around $1,950 heading into September to $2,200 by the end of this year.

With that aside, I'll take a look at my capital deployment for August 2021 and what stocks I decided to purchase during the month.

As I noted in my previous post of this series, July 2021 marked the last month that there would be any meaningful activity in my retirement account (aside from dividend reinvestment in March, June, September, and December). This is because I recently completed my transition from my day job at my previous employer to being self-employed as a writer for Motley Fool and Seeking Alpha.

That's why I'll be exclusively focusing on the activity within my taxable accounts (and specifically within my Robinhood account).

I started August off by initiating a new position in Medtronic (MDT), which is because I essentially believe that Medtronic is fairly valued and the company has a variety of growth catalysts in the future as I noted in my most recent Motley Fool article on the stock.

I opened a five share position in MDT at an average cost of $127.93, which equates to an average net yield of 1.97% based on the $12.60 in net annual forward dividends added from my purchase.

Next, I added 18 shares of Viatris (VTRS) to my position at an average cost of $14.23 a share, which is an average net yield of 3.09% when considering the $7.92 that was added to my net annual forward dividends due to the purchase.

As I explained in a recent Motley Fool article on VTRS, the company is cheaply valued despite a fundamentally healthy business with tons of room to grow its dividend. These were the key factors that prompted me to add to my position.

The second stock that I initiated a position in during August was Merck (MRK), which is because its blockbuster oncology drug Keytruda secured an FDA approval for advanced renal cell carcinoma. As I detailed in a recent Motley Fool article on MRK, the stock has multiple vehicles for growth in the years ahead (i.e., Keytruda, HPV vaccine Gardasil, and its animal health business) and trades at a cheap valuation considering its growth prospects.

This led me to initiate a seven share position in MRK at an average cost of $78.79 a share, which works out to a 3.3% net yield when factoring in the $18.20 in net annual forward dividends that these purchases added to my portfolio.

I also purchased an additional share of J.M. Smucker (SJM) in August at a cost of $132.74, which is a 2.98% net yield given the $3.96 in net annual forward dividends that were added from my purchase.

SJM's recent 10% dividend increase and reasonable valuation were the two main reasons why I opted to add to my position.

I added one share of Amgen (AMGN) during August at a cost of $225.49, which was due to the stock's recent pullback and decent operating results as I outlined in a recent Motley Fool article.

This works out to a 3.12% net yield when considering the $7.04 in net annual forward dividends that were added as a result of my purchase.

I also added a share to my position in National Retail Properties (NNN) at a cost of $46.80. I noted in a recent Motley Fool article that I like the stock because of its focus on single-tenant triple net lease REITS, diversified portfolio, and fair valuation.

Considering the $2.12 in net annual forward dividends that this purchase added to my portfolio, my net yield was 4.53%.

I also decided to add a couple shares to my position in KeyCorp (KEY) at an average cost of $19.65 a share. This works out to a net yield of 3.77% given the $1.48 in net annual forward dividends that were added to my portfolio from the purchase.

Finally, I added two shares of Dominion Energy (D) to my portfolio at an average cost of $79.77 a share. I was impressed by D's strong start to this year and sensible valuation as I noted in a recent Seeking Alpha article.

This equates to a net yield of 3.16% when considering the $5.04 in net annual forward dividends that this purchase added to my dividend portfolio.

Concluding Thoughts:

I invested $2,051.12 in August and added $58.36 to my portfolio's net annual forward dividends, which works out to a net yield of 2.85%.

When also considering the $10.954 in net annual forward dividends that were added from dividend increases in August, my portfolio's net annual forward dividends surged from just under $1,880 at the start of August to about $1,950 heading into September.

Discussion:

How was your August in terms of capital deployment?

Did you add any new positions during the month as I did with my purchases of MDT and MRK?

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

Tuesday, August 31, 2021

Expected Dividend Increases for September 2021

As I'm writing this blog post, Labor Day or the unofficial end of summer is less than two weeks away. 

Even though the summer heat will soon disappear, the dividend increases in my portfolio are just starting to heat up. In this post, I'll discuss the five dividend increases that I received in August and look ahead to the 10 (yes, 10!) dividend increases that I am expecting in September.

Actual August 2021 Dividend Increases

Dividend Increase #1: British Petroleum (BP)

The first dividend increase that I received in August was from British Petroleum. 

While the cut to the quarterly dividend last year as a result of COVID still stings a bit, BP's 4% dividend increase from a quarterly dividend of $0.315/share to $0.3276/share is a start in restoring the dividend to its pre-cut level of $0.625/share.

With WTI crude's year-to-date average of $64/barrel up 62% from last year's average just below $40, BP's dividend is much better covered now than it was leading up to the dividend cut.

Across my 11 shares of the stock, my net annual forward dividends increased $0.554 as a result of the dividend increase.

Dividend Increase #2: Simon Property Group (SPG)

After slashing its quarterly dividend 38.1% from $2.10/share to $1.30/share in June 2020 to preserve liquidity in the first few months of the COVID pandemic, Simon Property Group announced a 7.7% increase to $1.40 just this June.

As a result of Americans getting vaccinated and more foot traffic to its malls, SPG increased its dividend for the second time this year in August by 7.1% from $1.40/share to $1.50/share. I'm very pleased that SPG is taking steps to restore its dividend to its pre-COVID state.

My net annual forward dividends surged $2.40 across my six shares due to the dividend increase.

Dividend Increase #3: Main Street Capital (MAIN)

The third company to increase its dividend during August was Main Street Capital. 

Improving operating fundamentals led MAIN to increase its monthly dividend 2.4% from $0.205/share to $0.21/share.

Across my 16 shares of the stock, my net annual forward dividends rose by $0.96 from its dividend increase.

Dividend Increase #4: Williams-Sonoma (WSM)

The fourth dividend increase of August was one that completely took me by surprise, which was Williams-Sonoma's massive 20.3% increase in its quarterly dividend from $0.59/share to $0.71/share. The stock already increased its quarterly dividend 11.3% from $0.53/share to $0.59/share this March.

Buoyed by three major tailwinds in the foreseeable future, Williams-Sonoma crushed analysts' revenue and earnings estimates.

As my largest winner (up about 340% as of August 26, 2021 before dividends), I am thrilled by the massive capital appreciation and 82% increase to its quarterly dividend since I purchased shares. 

This company is the very essence of dividend growth investing and I'm fortunate that it is one of the largest positions in my portfolio.

My net annual forward dividends soared by $4.32 across my nine shares of the stock as a result of the dividend increase.

Dividend Increase #5: Altria Group (MO)

The fifth dividend increase that I received in August was from Altria Group. 

MO announced a 4.7% increase in its quarterly dividend from $0.86/share to $0.90/share, which was in line with my prediction that I outlined in my previous post of this series.

Across my 17 shares of MO, my net annual forward dividends advanced by $2.72 due to the dividend increase.

Expected Dividend Increases for September 2021

Dividend Increase #1: Realty Income (O)

The first dividend increase that I'm expecting for September is from one of the steadiest companies in my portfolio, which is Dividend Aristocrat Realty Income.

I believe that O will announce a 0.2% increase in its monthly dividend from $0.2355/share to $0.2360/share. While this may sound small, it's worth mentioning that O increases its monthly dividend by small increments in March, June, September, and December, and a larger increment (typically 2-3%) every January.

Across the 13 shares of O that I own, my net annual forward dividends would be $0.078 higher if the stock increases its dividend as much as I expect.

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

The next dividend increase that I anticipate will be announced in September is from none other than W.P. Carey, which is not far away from joining O as a Dividend Aristocrat.

Similar to O, WPC increases its dividend each quarter and I expect that September will be no different.

I'm forecasting that WPC will announce a 0.2% advance in its quarterly dividend from $1.05/share to $1.052/share.

Should my prediction prove correct, my net annual forward dividends would increase $0.056 across my seven shares of WPC.

Dividend Increase #3: General Mills (GIS)

The third dividend increase that I'm expecting for September is General Mills.

I anticipate that GIS will boost its quarterly dividend 3.9% from $0.51/share to $0.53/share.

If this dividend increase plays out, my net annual dividends would increase $0.32 across my four shares of GIS.

Dividend Increase #4: Philip Morris International (PM)

The next dividend increase that I'm forecasting for September is Philip Morris International.

Given that Yahoo Finance analysts are forecasting 18% year-over-year growth in adjusted diluted EPS for PM from $5.17 in 2020 to $6.10 this year, I believe that PM will announce a 4.2% increase in its quarterly dividend from $1.20/share to $1.25/share.

Across my 13 shares of PM, my net annual forward dividends would be boosted $2.60 if my prediction is correct.

Dividend Increase #5: Lockheed Martin (LMT)

The fifth dividend increase that I am expecting for September is Lockheed Martin.

Given LMT's guidance of $26.70-$27 in diluted EPS for this fiscal year (versus $24.58 in diluted EPS during 2020), I believe that LMT will announce a 7.7% increase in its quarterly dividend from $2.60/share to $2.80/share.

My net annual forward dividends would increase by $2.40 across my three shares of the stock if my forecast is proven right.

Dividend Increase #6: Visa (V)

The next dividend increase that I believe will be announced in September is from Visa.

In light of the fact that V's EPS is expected to jump 15.5% from $5.04 last fiscal year to $5.82 this fiscal year, I think that V will get back on track as far as dividend growth is concerned after last year's modest 6.7% increase in the quarterly dividend from $0.30/share to $0.32/share.

That's why I am confident that V will announce a 12.5% increase to take its quarterly dividend to $0.36/share.

Across my two shares of the stock, my net annual forward dividends would be boosted by $0.32 from the dividend increase.

Dividend Increase #7: STORE Capital (STOR)

The seventh dividend increase that I'm forecasting for September is STORE Capital.

Since STOR's AFFO/share is expected to mostly recover to pre-pandemic levels this year and I expect the REIT will exceed pre-pandemic levels next year, I expect a greater increase than last year's token $0.01 increase in the quarterly dividend from $0.35/share to $0.36/share.

I'm anticipating a 5.6% increase in the quarterly dividend to $0.38/share, which would advance my net annual forward dividends by $1.52 across my 19 shares of the stock.

Dividend Increase #8: Verizon (VZ)

The next dividend increase that I'm expecting to be announced in September is from Verizon.

As VZ continues to build out its 5G infrastructure, the company has some room to boost its dividend.

This is precisely why I believe that VZ will increase its quarterly dividend 2.8% from $0.6275/share to $0.645/share.

Across my 18 shares of the stock, my net annual forward dividends would increase $1.26 if my prediction proves to be correct.

Dividend Increase #9: American Tower (AMT) 

The ninth dividend increase that I'm anticipating for September will come from American Tower.

For those unfamiliar, AMT raises its quarterly dividend each quarter.

Since the third quarter dividend increase is typically the second smallest behind the second quarter dividend increase, I am expecting that AMT will announce a 2.4% increase in its quarterly dividend from $1.27/share to $1.30/share.

My net annual forward dividends would advance by $0.36 across my three shares of the stock if my forecast is proven right.

Dividend Increase #10: Microsoft (MSFT)

The final dividend increase that I'm anticipating for September is from Microsoft.

With MSFT's EPS expected to advance 9% this fiscal year over the last to $8.76 and a low dividend payout ratio, I believe that MSFT can easily afford to hike its quarterly dividend 10.7% from $0.56/share to $0.62/share.

Across my three shares of the stock, my net annual forward dividends would be $0.72 higher from such a dividend increase.

Concluding Thoughts:

My net annual forward dividends skyrocketed $10.954 in August as a result of the five dividend increases that I received during the month.

This would take $312.97 in fresh capital invested at an average yield of 3.5% to replicate, which is by far my best month in my four year investing career to this point. Heading into September, my net annual forward dividends are just below $1,950.

Based on my predictions for next month's dividend increases, my net annual forward dividends would increase by $9.634 or nearly as much as August. With the overall quality of the names I'm expecting increases from next month, I wouldn't be surprised if I secured my second straight month of $10+ in additional net annual forward dividends from dividend increases alone.

I've spent the last four years laying the foundation of my portfolio and I'm so excited that things seem to meaningfully be trending in the right direction. Compounding dividends truly are the eighth wonder of the world!

Discussion:

How was your August for dividend increases?

Are you expecting any first-time dividend increases from new holdings as I am with VZ and MSFT?

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

Tuesday, August 24, 2021

September 2021 Dividend Stock Watch List

After hitting yet another all-time high of 4,480.26 on August 16, the S&P 500 pulled back a bit to close the week just above 4,440. Delta variant concerns and signaling of reduced asset purchases ahead from the recently released minutes of the Federal Reserve's July 27-28 meeting led the S&P 500 nearly a half percent lower to close out the week.

With most of my capital deployment in the books for August 2021, I'll now turn my attention to a few dividend stocks on my watch list for September 2021.

                                           

Image Source: Pexels

Dividend Stock #1: Lockheed Martin (LMT)

The first dividend stock on my watch list for September is Lockheed Martin. 

LMT has gotten off to a great start in the first half of this year, which is evidenced by its 4.4% growth in year-to-date revenue from $31.9 billion in H1 2020 to $33.3 billion in H1 2021, per LMT's Q2 2021 earnings press release (the source for all accompanying data, unless otherwise specified).

As a result of also repurchasing $1.5 billion or 4.2 million shares in the first half of the year according to its recent 10-Q, LMT's diluted EPS advanced 10.2% from $11.87 in H1 2020 to $13.08 in H1 2021.

LMT's backlog also remained healthy at the end of the second quarter, with backlog declining slightly from $147.1 billion at the start of the year to $141.7 billion to end the quarter. For context, this is the equivalent of over two years of revenue for LMT based on its guidance of $67.3-$68.7 billion for this year.

LMT's interest coverage ratio improved from 13.4 in the first half of 2020 to 15.5 in H1 2021, which suggests that the company has no issues in covering its interest expense with earnings before interest and taxes.

A payout ratio of just under 40% in the first half of this year means that the dividend is well covered ahead of its upcoming dividend increase. And a forward P/E ratio of less than 13 based on Yahoo Finance's average analyst estimate of $28.02 and the current price of $357.17 a share (as of August 20, 2021) indicates that the stock is quite cheap.

Dividend Stock #2: Merck (MRK)

The next dividend stock on my watch list for September is Merck.

MRK caught my attention after I recently covered the company's U.S. Food and Drug Administration (FDA) approval to treat advanced renal cell carcinoma (RCC) in combination with Lenmiva, which prompted me to start a position in the stock.

The FDA's approval of the drug combo is the second indication in as many months following the approval in July to treat advanced endometrial carcinoma, which is positioning Keytruda to overtake AbbVie's (ABBV) Humira in a couple years as the top-selling drug in the world. The drug also won't face any loss of exclusivity concerns until 2028 per FiercePharma, so MRK has plenty of time to diversify away from Keytruda.

MRK's interest coverage ratio of 12 (according to data sourced from MRK's Q2 2021 earnings press release, unless indicated otherwise) indicates the company's balance sheet is in decent shape.

Based on MRK's guidance for $5.47-$5.57 in non-GAAP EPS this year and a dividend per share obligation of $2.60, MRK's dividend payout ratio should clock in at a sustainable sub-50% level this year.

MRK's current price of $78.68 a share implies a current PE ratio of about 14, which is a good value for the 12.8% annual earnings growth that analysts are expecting over the next five years.

Dividend Stock #3: Visa (V)

The final dividend stock on my watch list for September is Visa (V).

Visa has benefited from the reopening global economy, which becomes clear by examining the company's results through the first nine months of its current fiscal year.

V has increased its YTD revenue by 4.8% year-over-year from $16.7 billion in 2020 to $17.5 billion in 2021 (all data sourced from V's Q3 2021 earnings press release, unless otherwise noted).

While V hasn't been able to give non-GAAP EPS guidance for this fiscal year due to the uncertainty surrounding COVID, analysts are anticipating 15.5% year-over-year growth from $5.04 in 2020 to $5.82 this year.

Compared to the $1.28 in dividends per share that will be paid out for this fiscal year, that would be a non-GAAP EPS payout ratio of just 22%. This leaves V's payout plenty of room to grow ahead of the 19.7% annual earnings growth that is expected over the next five years.

Additionally, V's interest coverage ratio improved from an already robust 28.9 in the nine months ended 2020 to 30.3 in the nine months ended this year.

While V at its share price of $231.36 isn't cheap at nearly 40 times this year's earnings forecast, its excellent growth prospects, low payout ratio, and great balance sheet are arguably worth the premium.

Concluding Thoughts:

My net annual forward dividends are likely to be around $1,945 heading into September. I'm anticipating that I will deploy somewhere in the range of $1,500-$2,000 in capital for next month and a number of dividend increases will be announced at that time, which should get me slightly beyond the $2,000 net annual forward dividend milestone.

Discussion:

Are any of LMT, MRK, and/or V on your watch list for September 2021?

If not, what stocks are you watching for the month?

As always, thanks for your readership and please feel free to leave your comments in the comment section below!

Tuesday, August 17, 2021

July 2021 Dividend Stock Purchases

The past few days have been very hot and humid in Central Wisconsin. The high temperature for today is 80 and it feels like 90 degrees Fahrenheit. Fortunately, temperatures are going to cool down to the 70s starting tomorrow for the foreseeable future.

With that aside, I'll turn my attention to the dividend stock purchases that I made in July 2021.




Starting with my retirement account, I deployed $253.18 in capital to my Capital Income Builder (CAIBX) mutual fund between my 7% contribution and my employer's 3% matching contribution.

Factoring in the 3.5% sales charge for contributions, I put $244.34 in net capital to work during July 2021 within my retirement account. This helped my CAIBX share balance increase by 3.563 shares from 171.434 to begin the month to 174.997 heading into August.

Based on $2.13 in net annual forward dividends/share, my net annual forward dividends were boosted by $7.59. This works out to a 3.11% net yield based on the capital I invested during the month. It's worth noting that this will be the last regular activity in my retirement account aside from dividend reinvestment, which is due to the fact that I started writing for Motley Fool and Seeking Alpha full-time recently.

Moving to my taxable account, I started new positions in five companies during July.

I started July by initiating a 10 share position in Essential Utilities (WTRG) at an average cost of $47.41 a share. The purchase added $10.73 to my net annual forward dividends, which equates to a 2.26% net yield for my cost basis.

For those who are interested in my decision to open a position in WTRG, I would refer them to my recent Seeking Alpha article for more details. I'll just summarize by indicating that WTRG is a stock I have wanted to own for years, but I have always waited for a "better price" that never ultimately materialized.

I was willing to pay a slight premium for shares of WTRG just to get a position started and I intend to aggressively add on even the slightest of pullbacks going forward.

I followed up my purchase of WTRG with yet another utility, which was a seven share position in Pinnacle West Capital (PNW) at an average cost of $84.39 a share. This works out to a 3.93% net yield based on my cost basis and the $23.24 in net annual forward dividends that were added to my portfolio.

PNW was on my July 2021 dividend stock watch list, so it made sense to add it to my portfolio.

I also rationalized my purchase of PNW in a recent Seeking Alpha article, but the long and short of it was that I liked PNW's exposure to Arizona's steadily growing population, nice balance sheet, and safe 4% yield.

Another stock on my watch list for last month that I added to was consumer staple Kimberly Clark (KMB). 

I view KMB as a safe income play with mid-single digit dividend growth potential, which is what prompted me to purchase four shares of the stock at an average cost of $134.33 a share. This equates to a net yield of 3.39% based on the $18.24 in net annual forward dividends that the purchases added to my portfolio.

I also added another share of JPMorgan Chase (JPM) to my portfolio last month at a cost of $151.80, which added $4.00 to my net annual forward dividends. This works out to a 2.64% net yield on my purchase.

Sticking with the financial sector, I initiated a 20 share position in KeyCorp (KEY) at an average cost of $19.17 a share. Considering the $14.80 in net annual forward dividends that were added from my purchase, this equates to a 3.86% net yield.

I covered KEY in a Motley Fool article last month, which was what ultimately led me to start a position in the regional bank. 

I essentially liked the company's solid increase in noninterest income, the improving balance sheet, and huge $1.5 billion share repurchase program at a time when the bank appears to be somewhat undervalued.

The fifth and final stock that I initiated a position in during July was the consumer staple Clorox (CLX), which was also on my watch list for the month.

While I added a bit prematurely given that the stock would tank following its softened outlook in its Aug. 3 earnings press release, I like the company's above-average dividend yield with mid-single-digit dividend growth potential.

This prompted me to start a two share position in the stock at an average cost of $181.13 a share, which is a 2.56% net yield based on the $9.28 in net annual forward dividends added.

Finally, I added to my position in Viatris (VTRS). I purchased 8 shares at an average cost of $13.85 a share, which works out to a net yield of 3.18% when considering the $3.52 in net annual forward dividends added by my purchase.

As I explained in my August 2021 dividend stock watch list post, VTRS is taking the right steps to reduce its debt by $6.5 billion by 2023. The company is trading at just four times this year's forecasted EPS of $3.53, which is mind boggling.

The company is also making nice progress in getting new products approved (and eventually on the market), which is evidenced by the recent approval of Viatris and Biocon's interchangeable biosimilar for Sanofi's insulin drug Lantus that I discussed in a recent Motley Fool article.

Concluding Thoughts:

Overall, I deployed $2,854.61 in net capital during July. Compared to the $91.40 in net annual forward dividends that were added last month, this works out to a 3.20% net yield.

I also added $4.36 in net annual forward dividends due to dividend increases last month, which along with my capital deployment, led to my net annual forward dividends surging from $1,780 entering July to nearly $1,880 heading into August.

Discussion:

How was your July in regards to capital deployment?

Did you add any new positions during the month like I did with my purchases of WTRG, PNW, KMB, KEY, and CLX?

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

Tuesday, August 10, 2021

July 2021 Dividend Income

The financial markets worked their way to fresh all-time highs late last week after a jobs report that handily beat expectations, sending the unemployment rate tumbling to 5.4%. Impressive earnings beats from most companies that reported earnings also helped the markets to advance.

My net dividend income in July 2021 also hit a record, which really drives home the point that dividend growth investing is a strategy that can work just about no matter what the financial markets are doing.




Analysis:

During July 2021, I received $108.30 in net dividends.

This represents a 21.6% quarterly growth rate against the $89.03 in net dividends collected in April 2021. Even factoring out the $12.00 in special dividends received from T. Rowe Price Group (TROW) during the month, my quarterly growth rate was still a healthy 8.2%.

Moreover, this represents a 46.8% year-over-year growth rate compared to the $73.79 in net dividends collected in July 2020. Backing out the special dividends from TROW, this still works out to a 30.5% year-over-year growth rate.

Delving into more detail, I received $98.28 in net dividends within my Robinhood portfolio from 18 companies, $9.79 from 5 companies in my Webull portfolio, and $0.23 from 10 companies in my M1 Finance portfolio.

The following activity within my taxable accounts is what led to the $19.27 increase in net dividends from April 2021 to July 2021:

I collected an extra $0.60 in dividends from Simon Property Group (SPG) during July in my Robinhood account, which was due to the company's recent dividend increase.

My net dividends received from from Leggett & Platt (LEG) increased $0.16 within my Robinhood account, which was the result of the company's dividend increase earlier this year.

I collected an extra $0.01 in my Robinhood account from W.P. Carey (WPC) due to the company's dividend increase in June.

My net dividends received from Realty Income (O) were $0.94 higher within my Robinhood account, which was the result of both a dividend increase in June and my recent purchase of an additional 4 shares of stock.

I collected an additional $0.36 from STORE Capital (STOR) in my Robinhood account, which was due to my decision to add a share of the stock recently.

My net dividends received from Philip Morris International (PM) increased $2.40 within my Robinhood account, which was the result of picking up a couple more shares of the stock in recent months.

I collected my first dividend from American Tower (AMT) in my Robinhood account since I initiated a position in the stock back in April, which helped my net dividends to increase by $3.81.

My net dividends received from GlaxoSmithKline (GSK) within my Robinhood account were $0.99 lower due to the fact that the third quarter dividend is historically lower than the second quarter dividend.

As I alluded to earlier, I collected an additional $12.00 from TROW in my Robinhood account due to the payment of its $3.00/share special dividend in July.

Finally, my net dividends received within my M1 Finance account were $0.02 lower, which was the result of JPMorgan Chase's (JPM) dividend payment timing.

Concluding Thoughts:

Several dividend increases and recent capital deployment helped me to surpass the triple-digit mark in the first month of a quarter for the first time ever! Better yet -- I anticipate that new capital deployment and more dividend increases in the near future will allow me to regularly pass the $100 threshold, even without TROW's special dividend boost going forward.

Discussion:

How was your July 2021 in terms of dividend income?

Did you receive any first time dividends during the month as I did with AMT? How about TROW's amazing special dividend?

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

Tuesday, August 3, 2021

August 2021 Dividend Stock Watch List

 It's hard to believe that as I'm writing this blog post, July is in the books and only five months remain in 2021. That should just motivate us to give that much more effort to achieve our goals in the time that remains this year!

With that aside, I will discussing a few dividend stocks on my watch list for August 2021.


Image Source: Pexels

Dividend Stock #1: Viatris (VTRS)

The first stock on my watch list for August is Viatris.

Since Upjohn spun-off from Pfizer with Mylan to form Viatris, I had been mostly watching from the sidelines with my initial shares received from the spin-off last November.

In recent months, I have added to my Viatris position because the company is obscenely undervalued due to the novelty of the recently formed company.

Viatris recognizes the need to pay down its $24 billion long-term debt load (data sourced from Viatris' Q1 2021 earnings press release), which is why the company is committed to paying down $6.5 billion by 2023. At around $18 billion in long-term debt by the end of 2023 and $6.5+ billion in adjusted EBIDA, the company's net debt to EBITDA ratio will be much more manageable in the not so distant future at less than 3.

The management of Viatris is taking the necessary steps possible to pay down a significant portion of its debt between now and 2023, which is reflected by the company's annualized dividend/share being $0.44 compared to analyst estimates for this year of $3.53 in EPS -- a payout ratio of just 12%!

Once the company is able to complete its deleveraging goal in a couple years, it's not unreasonable to expect healthy dividend hikes for years to come.

At less than four times this year's forecasted EPS, Viatris offers a very safe 3.1% yield with plenty of room to grow. This is a stock that I believe can realistically get to a high-single-digit yield on cost by the end of the decade for those who buy at the current price of $14.22 a share (as of August 1, 2021).

Dividend Stock #2: Pfizer (PFE)

The second stock on my watch list for August is one that I had already alluded to in the section above, which is Pfizer.

For those looking for a more in-depth explanation of why I will be adding to my Pfizer position, I would refer interested readers to my recent article on The Motley Fool on Pfizer, as well as AbbVie (ABBV).

It really comes down to the fact that even without its COVID-19 vaccine, Pfizer crushed it in the second-quarter. The company grew its non-COVID-19 vaccine revenue by double-digits year-over-year in Q2 2021.

Based on the midpoint of Pfizer's updated adjusted diluted EPS guidance of $3.95-$4.05 for 2021 and the current share price of $42.81, the company is trading at less than 11 times this year's earnings!

The market is pegging this company at a valuation that suggests there is no growth in its future, but Pfizer's year-to-date operating results beg to differ.

A 3.6% yield, mid-single digit annual earnings growth potential in the long-term, and moderate valuation expansion make it likely that Pfizer will meet my 10% annual total return requirement over the next decade.

Dividend Stock #3: J.M. Smucker (SJM)

The third stock on my watch list for August is J.M. Smucker.

After a couple weaker dividend increases in 2019 and 2020, the stock crushed my dividend announcement expectations last month, raising its quarterly dividend 10% from $0.90/share to $0.99/share.

J.M. Smucker's annualized dividend/share of $3.96 is quite secure considering that analysts forecast the company will generate $8.84 in EPS this year, which works out to a mid-40% payout ratio for the year.

Based on J.M. Smucker's current $131.11 share price, the stock is trading at just under 15 times this year's predicted earnings and offers a 3% yield.

J.M. Smucker isn't going to be my biggest winner in terms of share price appreciation or dividend growth, but it's a steady company that offers a safe yield with mid-single-digit annual earnings growth at a reasonable valuation.

Concluding Thoughts:

Even though August will mark my first full month since I left my day job to focus more on writing at The Motley Fool and Seeking Alpha, I anticipate that I will be sticking in the $1,500-$2,000/month range for capital deployment.

With my net annual forward dividends at just under $1,880 heading into August, I'm positioned to pass the $1,900 mark during the month.

Discussion:

Are any of VTRS, PFE, or SJM on your watch list for the month?

If not, what dividend stocks are on your watch list for August?

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

Tuesday, July 27, 2021

Expected Dividend Increases for August 2021

As I'm writing this blog post, the heat and humidity has made its way back to Central Wisconsin with high temperatures reaching into the upper 80s Fahrenheit.

Playing basketball in the driveway will be a bit less comfortable with the heat, but that's not enough to stop me from getting exercise doing something I enjoy as long as I stay hydrated!

Without further ado, I'll be discussing the dividend increases that I received during July 2021 and looking ahead to the dividend increase that I am expecting for August 2021.

Actual July 2021 Dividend Increases 

Dividend Increase #1: Wells Fargo (WFC)

While Wells Fargo fell short of my expectation of a 150% increase in the quarterly dividend from $0.10/share to $0.25/share, it still increased its dividend 100% to $0.20/share, which is a step in the right direction for the company to restore its dividend to the pre-COVID level of $0.51/share in a few more years.

I'd rather a company gradually increase its dividend back to pre-COVID levels to build a cushion and prevent another dividend cut in the future than to have it rush to restore its dividend prematurely.

Across my 8 shares of WFC, my net annual forward dividends soared $3.20 due to the company's dividend increase.

Dividend Increase #2: J.M. Smucker (SJM)

One company that really delivered beyond my wildest dreams in July was J.M. Smucker, which announced a robust 10% dividend increase in the quarterly dividend from $0.90/share to $0.99/share.

The previous two dividend increases leading up to this dividend increase were pretty anemic, so it's nice to see SJM getting back to solid dividend growth.

My net annual forward dividends advanced by $0.72 across my 2 shares as a result of the company's dividend increase.

Dividend Increase #3: National Retail Properties (NNN)

Wrapping up the dividend increases that I received for July 2021, National Retail Properties announced a dividend increase that came in below my expectations. Rather than the 3.8% increase in the quarterly dividend from $0.52/share to $0.54/share that I was predicting, NNN increased a 1.9% increase in the quarterly dividend to $0.53/share.

I was somewhat surprised by the announcement given the recovery in NNN's AFFO/share that I cited in my previous post of this series, but I'll take whatever dividend increases I can get. Perhaps NNN will make up for it with a stronger dividend increase next year.

Across my 11 shares of NNN, my net annual forward dividends increased by $0.44 due to the company's dividend increase.

Expected Dividend Announcement(s) for August 2021

Dividend Increase #1: Altria Group (MO)

The only dividend increase that I am anticipating for August is from the 3rd largest holding in my portfolio in terms of annual dividend income, which is Altria Group (MO).

Most readers are probably aware, but for those that aren't, MO recently announced that it was selling its Ste. Michelle Wine Estates business for $1.2 billion to a private equity firm to focus more on its core business.

In addition, the company expects to use its proceeds to repurchase shares at what look to be an attractive valuation, which will also reduce the company's total dividend obligation, and create a bit more leeway for the next dividend increase.

As a result, I am expecting that MO will announce a 4.7% increase in the quarterly dividend from $0.86/share to $0.90/share.

Should this dividend increase play out as expected, my net annual forward dividends would increase by $2.72 across my 17 shares as a result of the company's dividend increase.

Concluding Thoughts:

My net annual forward dividends increased by $4.36 due to dividend increases received in July 2021, which is equivalent to investing $109 in fresh capital at a 4% average yield.

Looking ahead to next month, I am expecting that MO's dividend increase will help my net annual forward dividends to increase by $2.72, which would be like investing $68 in one's own capital at a 4% average yield.

Discussion:

How was your July as it relates to dividend increases?

What companies are you anticipating you will receive dividend increases from in August?

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

Tuesday, July 20, 2021

My Exciting Announcement and 3 Takeaways

Over the past few weeks, and most recently in my July 2021 Dividend Stock Watch List piece, astute readers may have noticed references to The Motley Fool. That's because just over a month ago, my first piece was published by TMF on whether UnitedHealth Group's (UNH) dividend was as safe following its dividend increase as it was leading up to that dividend increase.

It wasn't long after my first article was published with TMF that I had an epiphany, which was that I could make as much money from TMF as an equity analyst/writer, if not more than I was making at my day job while also finding more meaning and fulfillment in my work.

It was with this in mind that I spent the next few weeks after my day job each day working toward brainstorming the types of content that I could pump out at TMF to blossom into an essentially full-time endeavor when combined with my Seeking Alpha content as well.

The end result was that I ended up putting in my 2 week notice at my employer on June 28th and recently completed my last day in the corporate world as an employee in the traditional sense on Friday, July 9th (I can't rule out an eventual return to the corporate world, so I'll qualify that with "at least for the foreseeable future").

Based on the fact that freelancing contributed $1.4 trillion to the U.S. economy in 2020 and that it is estimated that the majority of the U.S. workforce will be freelancers by 2027, my decision was inevitable in my opinion, especially after having enjoy working remotely most of 2020 and part of this year.


Image Source: Pexels

The First Takeaway: Life Is Too Short Not to Live on Your Terms

While there are varying viewpoints on where we go after passing away at the conclusion of our time on Earth, there is a general consensus among those of differing religious beliefs that this is the one and only life we have here on this Earth.

Because none of us know when we will draw our last breath, it can be argued that we should live our lives more in the present and not get caught up in how others perceive us or the way we live our lives.

While I didn't mind the individuals that I worked with/for and most of my job responsibilities, I have known for a while that I didn't want to be an employee forever.

Don't get me wrong; it's great to have a predictable paycheck and solid benefits that often go along with a day job. 

If I could sum up my decision in one word, it would likely be "autonomy." 

While I now have a great deal of responsibility in managing my workload and providing for myself, the upside is that I have the freedom to choose when I work and the nature of my work. In reclaiming a sense of autonomy for the first time arguably since before I attended the public school system, I'm also likely not giving up anything on the financial end with my career decision.

When factoring in my loss of benefits (worth about $160/month between my 3% employer contribution retirement match, dental, and vision insurance), drastically reduced transportation spending to the tune of roughly $100/month, my day job net income of roughly $2,200/month, and the employer portion of the self-employment taxes (net of the SE deduction) that also go along with being a freelancer, I only need to write 23 articles a month or essentially 1 a day, Monday-Friday at TMF to break even financially.

In even just a slightly optimistic scenario, I could end up making more money doing something that I enjoy with a greater degree of freedom than what I had at my day job.

Even in a pessimistic scenario, I end up making what I was making before or slightly less with more autonomy, which is something that is hard to put a price on.

The Second Takeaway: People Respond to Those Chasing Their Dreams

While many that have disclosed the pursuit of their dreams have been greeted with hostility from others in the past, that fortunately wasn't my experience when I handed my resignation letter to my employer.

Although they obviously didn't want to see me leave, they were happy for me and overwhelmingly supportive of my decision.

Perhaps that's because they have known for a couple years of my Seeking Alpha side hustle and my overall ambition to achieve FI.

At any rate, I'm glad to have spent the first 4 years of my career at my prior workplace as it was as supportive and welcoming environment that any young college grad could hope for from an employer.

The Third Takeaway: Dividend Investing and Frugality Allowed My Entrepreneurial Mindset to Take Root

In many ways, it is very difficult for most people to take a so called "leap of faith" and go from a steady paycheck as an employee to a more variable income as a freelancer or their own "boss."

Because I am fortunate enough to live with my parents and I possess frugal tendencies that come to me naturally, I didn't find it that difficult to put in my notice and transition from an employee to a freelancer.

After all, my average monthly expenses are merely $800-$900, which sets a pretty low bar for me to clear while also continuing to build my dividend stock portfolio.

The second piece of the puzzle, however, is just as important.

While I have a long ways to go before my net dividend income is able to fully cover my expenses, I have been blessed to make a tremendous amount of progress in my nearly 4 years of investing.

As of my writing on July 17th, 2021, my average monthly net dividend income of $153 covers 15-20% of my expenses off the bat.

While I don't envision the need to dip into my net dividend income to cover my expenses and I intend to reinvest that capital as well as $1,000-$2,000+/month in dividend stocks, it's reassuring to know that a nice portion of my expenses are already covered, further lowering the bar for me to make this a viable career move.  

Concluding Thoughts:

I'm very grateful to have been blessed with an interest in dividend growth investing (and financial markets in general) and FI. Without my interest in these particular topics, I'm not sure whether I would have had the financial confidence to freelance as a career in order to live life on my terms.

I look forward to producing content here on the blog on a weekly basis, Seeking Alpha on a weekly basis, and TMF on a regular basis!

Discussion: 

What are your thoughts on freelancing?

Are you a freelancer?

If so, are you a part-time freelancer with a day job or is freelancing your career as is now the case for myself?

Tuesday, July 13, 2021

July 2021 Dividend Stock Watch List

 As I'm writing this blog post, the temperatures here in Central Wisconsin reflect that of a pleasant summer with highs in the low-80s Fahrenheit and lows in the mid-50s Fahrenheit. Since it often gets oppressively hot and humid where I live, I'm very much enjoying the more ideal temperatures.

With that aside, I will finally be getting to the dividend stocks that are on my July 2021 watch list.


Image Source: Pexels

Dividend Stock #1: Pinnacle West (PNW)

The Arizona electric utility that provided service to roughly 1.3 million customers throughout most of Arizona in 2020, with the exceptions of half of Phoenix, the Tucson metropolitan area, and Mohave County in the northwestern part of the state (per Pinnacle West's recent 10-K) recently caught my attention.

Due to the huge influx of residents into Maricopa County's Phoenix-Mesa-Chandler metropolitan area (according to Census.gov), Pinnacle West has benefited from consistent customer base growth year after year, and this trend continued in the first quarter of this year, with 2.1% customer growth for the utility (per Pinnacle West's Q1 2021 earnings press release).

The company demonstrated its resiliency last year, growing its diluted EPS by 2.1% over 2019 in arguably the most challenging operating year in recent memory.

Looking ahead over the next 3 years, Jason Fieber pointed out in a recent post that CFRA is anticipating 5% annual earnings growth during that time (more or less in line with past growth), which should enable the company to grow its dividend at least at a 5% clip given the company's healthy mid-60% diluted EPS payout ratio in 2020 (data sourced from Dividend and Stock History page).

While Pinnacle West isn't dirt cheap by any means, the company is a fair buy when considering Yahoo Finance's average analyst estimate of $4.97 in diluted EPS for 2021 is less than 17 times this year's earnings against the current share price of $83.65 (as of July 11, 2021).

Pinnacle West's 4.0% yield (triple the S&P 500's 1.3%), mid-single digit annual earnings growth potential, and potential for slight valuation multiple expansion should translate into high-single digit to low-double digit annual total return potential over the next decade.

Dividend Stock #2: Clorox (CLX)

Given that the consumer staples company best known for its eponymous Clorox brand paid out $4.44 in dividends per share in FY 2021 and that the company is anticipating $7.45-$7.65 in adjusted EPS for the year ended June 30, 2021 (data sourced from Clorox's Q3 2021 earnings press release and Clorox's Dividend page), Clorox's adjusted EPS payout ratio for the fiscal year will be around 59% at the midpoint figure of $7.55 in adjusted EPS.

This leaves the company with a slight bit of room to expand its payout ratio, which leads me to believe that the dividend will grow ever so slightly ahead of whatever earnings growth the company can deliver in the long-term.

When taking into consideration that Clorox is trading at just under 24 times this year's earnings and that the stock's 2.6% yield is double that of the S&P 500's 1.3%, I believe that while Clorox isn't a bargain, the company is about fairly priced at the current share price of $180.88 (as of July 11, 2021). It's certainly not significantly overpriced as it was earlier this year and last year when it was well into the $200s.

Clorox's 2.6% yield in combination with 6.0-7.0% annual earnings growth and a static valuation multiple make it likely the company will deliver annual total returns around 9-10% over the next decade.

Dividend Stock #3: Kimberly Clark (KMB)

The third and final dividend stock on my watch list for July is Kimberly Clark, a large-cap consumer staple in its own right.

Kimberly Clark's reasonable payout ratio and fair operating fundamentals allowed the company to deliver a 6.5% increase to its quarterly dividend to start this year from the previous $1.07/share to $1.14/share.

Even after the solid dividend increase, Kimberly Clark's adjusted EPS payout ratio is positioned to be around 61% at the midpoint of its $7.40-$7.55 guidance for 2021, which strikes a nice balance between rewarding shareholders with immediate income and also retaining enough earnings to invest in growing the business.

Factoring in that Kimberly Clark is trading at 18 times this year's midpoint adjusted EPS and the 3.5% dividend yield is nearly triple that of the S&P 500's 1.3% (based on the $135.02 share price as of July 11, 2021), I believe that Kimberly Clark is another business trading right around fair value.

Kimberly Clark's 3.5% yield and 5.0-6.0% annual earnings growth make it a safe income play with dividend growth that will likely outpace inflation in the years ahead, which make it a solid buy in my opinion.

Concluding Thoughts:

Since I have one week of earned and unused vacation pay from my day job coming my way, as well as my income from my Seeking Alpha and Motley Fool side hustles, I anticipate that I will have over $3,000 in capital to invest during July 2021.

I'm very excited to deploy my capital into the 3 businesses above, as well as several others to advance my net annual dividends to new heights. I anticipate that I will be investing over $3,000 in capital at an average weighted net yield of 3.5% in July, which would take my net annual forward dividends from about $1,780 to begin the month and just under $1,900 to head into August.

Discussion:

Are any of PNW, CLX, or KMB on your watch list for this month?

If not, what dividend stocks are on your watch list at this time?

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

Tuesday, July 6, 2021

June 2021 Dividend Income

 As I'm writing this blog post, the 4th of July is just two days away and there are just 182 days left in 2021. Can you believe we're closer to 2022 than we are to 2020?!

Moving to the intent of this post, I will be discussing my dividend income for the month of June 2021. 






Analysis:

During the month of June 2021, I received a record $197.54 in net dividends against the $165.45 in net dividends collected in March 2021, which represents a 19.4% quarterly growth rate.

June 2021's net dividends are a staggering 45.0% higher than the $136.28 in net dividends received in June 2020!

Breaking things down by account, I received $117.36 in net dividends from 29 companies in my Robinhood account, $67.48 in net dividends from the Capital Income Builder (CAIBX) position within my retirement account, $12.24 in net dividends from 6 companies in my Webull account, and $0.46 in net dividends from 23 companies within my M1 Finance account.

The $32.09 increase in my net dividends collected from March 2021 to June 2021 was due to the following activity within my portfolios:

I received an additional $5.41 in net dividends within my CAIBX account as a result of a higher share count from March 2021 to June 2021.

My net dividends received from UnitedHealth Group (UNH) were $1.65 higher due to the company's dividend increase last month and my purchase of a share of the stock in my Robinhood account last month.

I also collected an additional $0.16 in net dividends from my stake in PepsiCo (PEP) within my Robinhood account due to the company's dividend increase.

My net dividends received from T. Rowe Price Group (TROW) were $4.32 higher in my Robinhood account due to the stock paying me my first dividend during June after I initiated a position in April.

I collected an extra $4.13 in net dividends from BlackRock (BLK) due to my decision to open a position within my Robinhood account during April.

My net dividends received from Royal Dutch Shell (RDS.B) edged $0.12 higher as a result of the stock's recent dividend increase.

I also collected an additional $1.15 in net dividends from my Prudential Financial (PRU) position between my Robinhood and Webull accounts due to an addition within my Robinhood account.

My stake in Viatris (VTRS) paid its first dividend in June in my Robinhood account, which drove my net dividends higher by $1.21 during the month.

I received an extra $1.02 in net dividends from L3Harris Technologies (LHX) in June, which was a result of my recent purchase of an additional share of the stock within my Robinhood account.

My net dividends collected from Realty Income (O) were boosted $0.95 due to my purchase of 4 extra shares of the stock in my Robinhood account and the recent dividend increase.

I received an additional $1.68 in net dividends from Microsoft (MSFT) as a result of my decision to open a starter position within my Robinhood account in the stock back in May.

My net dividends collected from International Business Machines (IBM) inched up $0.04 in my Robinhood account due to the company's recent dividend increase.

I received an extra $1.21 in net dividends from Johnson & Johnson (JNJ) within my Robinhood account, which was a result of the company's recent dividend increase and my purchase of another share of the stock recently.

My net dividends collected from Southern Company (SO) were $0.10 higher due to the company's recent dividend increase in my Robinhood account.

I received a $0.78 increase in my net dividends from Pfizer (PFE), which was a result of my purchase of 2 additional shares recently within my Robinhood account.

My net dividends collected from WEC Energy Group (WEC) were boosted by $0.68 due to my recent purchase of another share of the stock in my Robinhood account.

I received an additional $7.53 in net dividends as a result of the elimination of my Robinhood Gold and margin expenses.

Finally, my net dividends collected from my M1 Finance account were $0.05 lower due to the timing of dividend payments from Fastenal (FAST), Norfolk Southern (NSC), and Starbucks (SBUX).

Concluding Thoughts:

My portfolio's net dividend income continued its momentum in June 2021, with a 19.4% quarterly growth rate and a year-over-year growth rate of 45.0%.

While the $747.70 in net dividends that I have collected through the first 6 months of 2021 represent a 51.0% year-over-year growth rate compared to the $495.16 in net dividends received through the first 6 months of 2020, I am on track to fall roughly $100 short of collecting $1,800 in net dividends this year at the rate I am going, assuming a 51.0% growth rate over 2020's $1,127.05 net dividend total.

Needless to say, I will need to step it up a bit in the remaining months of 2021 to meet my goal!

Discussion:

How was your June in terms of dividend income?

Did you receive any dividends for the first time as I did with TROW, BLK, VTRS, and MSFT?

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

Tuesday, June 29, 2021

June 2021 Dividend Stock Purchases

As I'm writing this blog post, July is just 4 days away, and 2021 is on the brink of already being half over! 

I'm making significant progress in achieving my financial goals for the year, and may need to even raise my financial goals in the near future! With the exception of ending this year with 8,000+ followers on Seeking Alpha, I am also on track to achieve my personal goals for the year.

With that aside, I will delve into the intent of this post, which is to discuss my dividend stock purchases for June 2021.


Beginning with my retirement account, I deployed $319.48 in gross capital between my 7% contribution, my employer's 3% contribution, and the reinvestment of my dividends received from my Capital Income Builder (CAIBX) position during June 2021.

Factoring in the 3.5% sales charge on both my contributions and my employer's contributions, I put $310.65 to work, which helped build my CAIBX position by 4.49 shares from 166.944 shares entering June 2021 to 171.434 shares heading into July.
 
Using $2.13 in net annual forward dividends/share, my net annual forward dividends were boosted by $9.56, which equates to a 3.08% net yield on the capital that I deployed during the month.

Shifting to my taxable account purchases, I began the month with adding a single share of UnitedHealth Group (UNH) to my portfolio at a cost of $402.99, following the 16.0% dividend increase. While I missed out on adding UNH in the low-$300s earlier this year, my addition came at a 2021 P/E ratio of less than 22 based on Yahoo Finance's average analyst estimate of $18.57 in EPS for this year, which is still reasonable in my opinion.

Factoring in UNH's new annualized dividend/share of $5.80, my net yield works out to 1.44% or a bit higher than the S&P 500's current yield.

I also decided to add to my British American Tobacco (BTI) position on the same day, purchasing 2 shares at an average cost of $40.22 a share.

Based on MarketWatch's average analyst estimate of $4.58 in EPS for 2021, I added to my position in BTI at a cost of less than 9 times this year's EPS and just 8 times next year's EPS! 

Using BTI's net annual forward dividend/share figure of $2.97, I added $5.94 in net annual forward dividends to my portfolio, which equates to a 7.38% net yield.

The first position that I added to that was on my June 2021 Watch List, was American Electric Power (AEP), which was 2 shares at an average cost of $85.00 a share.

Based on the Yahoo Finance analyst average estimate of $4.67 in EPS for 2021, I paid roughly 18 times this year's EPS for AEP, which is within reason in my opinion, especially given the premium of the broader market.

Based on the $5.92 in net annual forward dividends that were added as a result of my purchase, my net yield works out to 3.48%.

Another stock that was also on my June 2021 Watch List, was Philip Morris International (PM), which I added another share of at a cost of $98.01.

While paying 16 times this year's Yahoo Finance average analyst estimate is a significant premium to what I paid for shares of BTI, I view PM as the ESG king of its industry, which I believe justifies its premium.

The $4.80 in net annual forward dividends that I added due to my purchase equates to a 4.90% net yield.

A notable absence from my stock purchases in June 2021, is STORE Capital (STOR), which shot up over 6% since I highlighted the stock as being on my watch list. Since STOR was already trading around fair value in my opinion, this price activity was just a bit too much for me to justify adding to my position. There's always potentially next month, right?

I also added 4 shares of Verizon (VZ) to my position at an average cost of $57.42 a share, which is about 11 times this year's Yahoo Finance average analyst estimate of $5.09 in EPS.

When factoring in the $10.04 in net annual forward dividends that were added to my portfolio as a result of my purchase, my net yield works out to 4.37%.

Closing out my purchasing activity for the month of June, I opted to initiate a whole share position in JPMorgan Chase (JPM) of 3 shares at an average cost of $153.69 a share.

Based on the Yahoo Finance average analyst estimate of $13.16 in EPS for 2021, I paid less than 12 times this year's EPS, which is pretty reasonable for a company of JPM's quality.

Using the $10.80 in net annual forward dividends that were added to my portfolio due to my purchase (and I believe this amount is set to increase around 30% in the near future given that major banks passed the recent stress test with flying colors, JPM included), my net yield equates to 2.34%.

Concluding Thoughts:

Factoring in the $1,752.84 in net capital that I deployed in June 2021 and the $52.86 in net annual forward dividends that were added to the portfolio due to my purchases, my average weighted net yield was 3.02% in June.

Since July will be a two paycheck month in which I am compensated for a bit of unused vacation time and I have recently started writing for The Motley Fool, I am expecting that I will be able to deploy around $3,000 in July, which will be a huge boon to my net annual forward dividends during the month.

Between the $3.334 in dividend increases that I received in June and the net annual forward dividends that were added from capital deployment, my net annual forward dividends surged from just over $1,720 to begin the month to nearly $1,780 heading into July.

Discussion:

How was your June in terms of capital deployment?

Did you add any positions to your portfolio as I did with JPM?

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